The India-Middle East-Europe Economic Corridor (IMEC), put forward as a Western rival to China’s Belt and Road Initiative, and pushed into the headlights by the US administration last month at the G20 meeting in India, has come face-to-face with geopolitical reality after the latest conflict outbreak in Israel and Gaza.
The India-Middle East-Europe Economic Corridor (IMEC) was announced by the US, EU, India, Saudi Arabia, France, and Germany on September 9th on the sidelines of the G20 summit in New Delhi.
Two of IMEC’s most enthusiastic proponents are President Biden, who called it a “really big deal”, and European Commission President Ursula von der Leyen, who talked of a “green and digital bridge across continents and civilisations”. Indian Prime Minister Narendra Modi was also onside. He said the IMEC could be the “basis of world trade for hundreds of years to come”.
The IMEC offers a reduction in shipping times by as much as 40%. Trade between India and the Middle East has increased rapidly, and for India the real prize for New Delhi would be a closer relationship with Europe, its third largest trading partner. However, the corridor requires a reliable link between Saudi Arabia and Israel before goods can be eventually shipped to Europe from the port of Haifa.
That port was bought this year by India’s Adani group.
But the Israel-Gaza conflict has thrown a massive spanner in the works. It has become much more risky for Saudi Crown Prince Mohammed bin Salman to normalize diplomatic relations with Israel. Indeed, conspiracy theorists were quick to hypothesize that Iran was the driving force behind the attack on Israel from Gaza with the intention of destabilizing any normalization of relations between Israel and parts of the Arab world. Popular sentiment in the Arab world lies solidly with Gaza. Israel is launching retaliatory strikes and a ground invasion is widely expected.
Now, the ambitious plans for IMEC lie in temporary tatters, with the one plus perhaps being that it was only announced recently. In the near-term the Suez Canal will remain the primary route for goods travelling to Europe from India. Turkiye, a country with its own domestic political problems, is also pushing a rival trade route. However, reconfiguring global trade and financial routes have many times shown themselves to look good on paper and yet massively complex to bring into being.