India-Middle East-Europe corridor in doubt due to Israel-Hamas war

The future of the US and EU-supported India-Middle East-Europe Corridor appears grim as a result of the ongoing conflict in the Middle East. This corridor, which was once touted as a possible competitor to China’s Belt & Road Initiative, now faces significant challenges.

During the G20 summit held in New Delhi in September 2023, India unveiled an ambitious initiative known as the India-Middle East-Europe Corridor (IMEC). Supported by the United States, the European Union, and influential Middle Eastern leaders like Saudi Crown Prince Mohammed bin Salman, IMEC proposes the establishment of a comprehensive maritime and rail corridor connecting India to the Middle East and Europe.

US President Joe Biden expressed his optimism about the project, emphasizing the abundant opportunities it would bring. European Commission President Ursula von der Leyen hailed it as the most direct link to date between India, the Arabian Gulf, and Europe. Indian Prime Minister Narendra Modi envisioned the India-Middle East-Europe Corridor as the foundation for global trade for centuries to come.

The Israel-Hamas conflict and attacks on vessels in the Red Sea by Houthi rebels have actively impeded the progress of this ambitious venture. Consequently, the future of the project now faces a certain degree of uncertainty.

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How has the conflict between Israel and Hamas affected the progress of the project?

The project’s progress has been significantly affected by Israel’s war on Hamas. The India-Middle East-Europe Corridor was envisioned as a means to foster economic integration and partnership in the Middle East, connecting countries such as the United Arab Emirates (UAE), Saudi Arabia, Jordan, and Israel.

However, the ongoing conflict has disrupted the security situation in the region, posing a challenge to the realization of this vision. Moreover, the bombardment of Gaza by Israel has sparked anger in Saudi Arabia and the UAE, hindering efforts to improve relations between Israel and its Arab neighbors.

In fact, President Biden even suggested that Hamas targeted Israel in October to disrupt regional integration efforts, citing the India-Middle East-Europe Corridor as a prominent example that he had publicly supported.

The India-Middle East-Europe Corridor is designed to facilitate the connection of goods, energy, and data from India to Europe via the Middle East using rail and sea networks, pipelines, and cables. A crucial component of this project is the proposed rail network that would link the UAE, Saudi Arabia, Jordan, and Israel.

Saudi Arabia has already pledged a significant investment of $20 billion (€18.4 billion) in the IMEC, with a substantial portion allocated to the development of the rail network. However, the future of the IMEC project appears to be contingent on the outcome of the Israel-Hamas conflict, as successful implementation would necessitate cooperation between Israel and its Arab counterparts.

Despite ongoing geopolitical challenges, Saudi Arabia has expressed its willingness to normalize diplomatic relations with Israel following the resolution of the Gaza conflict, provided that such a resolution includes the establishment of a Palestinian state.

In addition to the Israel-Hamas conflict, security concerns have been raised due to recent Houthi rebel attacks on shipping in the Red Sea, underscoring the vulnerability of trade routes to security threats.

While the IMEC does not pass through the Red Sea, its maritime route from India would traverse the Strait of Hormuz, a strategically important chokepoint susceptible to Iranian influence.

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What other challenges does India-Middle East- Europe corridor encounter?

There are numerous other obstacles facing IMEC. One issue involves Turkey, as Ankara has been vocal in its opposition to the project since the beginning. Turkey is not a part of the IMEC initiative, and President Recep Tayyip Erdogan stated that “there can be no corridor without Turkey” following the G20 announcement.

The Turkish government is underscoring its nation’s historical role as a link between eastern and western commerce and is promoting an alternative route called the Iraq Development Road. It claims that Iraq, Qatar, and the UAE are in talks with Turkey to establish a trade pathway from Turkey to the Persian Gulf.

Critics in Turkey have raised concerns about what Foreign Minister Hakan Fidan referred to as “geostrategic worries.” Some analysts have suggested that IMEC is not just an economic endeavor but also a political one, potentially aimed at competing with China’s Belt & Road Initiative.

Moreover, there are uncertainties surrounding the construction and funding of IMEC. The project necessitates significant cross-border investments and collaborations. The project has highlighted environmental sustainability, but it has not yet conducted a feasibility study on constructing green hydrogen pipelines.

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Is there any positive news for India-Middle East- Europe corridor?

However, is there any positive news for IMEC amidst all this? It is evident that India is making significant efforts to strengthen its relations in the Middle East, regardless of the immediate prospects of the project.

Just this month, Indian Prime Minister Modi embarked on visits to the UAE and Qatar, as part of New Delhi’s ongoing diplomatic strategy to enhance ties with the Gulf Arab states.

During his visit to the UAE, Modi signed a bilateral investment treaty to bolster economic relations. The UAE currently stands as India’s second largest export market, and in 2023, the two countries entered into a free trade agreement aimed at promoting non-oil trade. Additionally, they have agreed to swiftly operationalize the ambitious economic corridor. Furthermore, there is another encouraging development indicating that IMEC remains a priority.