What Happened?
The India-Middle East-Europe Corridor (IMEC)–a transnational transport corridor initiated in 2023–appears to have made a comeback. In recent weeks, the project has been discussed and found positive reinforcement by the Greek Foreign Minister and Indian External Affairs Minister (on 8 February), the Israeli Minister of Economy and Industry (on 12 February), and the Indian Prime Minister and French President (on 12 February).
Finally, amidst PM Modi’s visit to Washington, the India-US Joint Statement (on 13 February) stated that “The leaders plan to convene partners from the India-Middle East-Europe Corridor and the I2U2 Group within the next six months in order to announce new initiatives in 2025.” As President Trump put it, “We agreed to work together to help build one of the greatest trade routes in all of history.”
Why It Matters
In the aftermath of the Gaza ceasefire, New Delhi restarted diplomatic outreach efforts for IMEC to regain the momentum lost after the tragic events which unfolded post-October 7, 2023. This was evident in EAM Jaishankar’s whirlwind tour of the Middle East last month and PM Modi’s recent visits to France and the US. At the rhetorical level, at least, Indian efforts have succeeded in bringing the focus back on IMEC, and discussions at the highest levels are in and of themselves significant. However, whether or how quickly the project materialises remains contingent upon several hurdles in the realms of logistical planning and execution, geopolitical contestations, and, perhaps most importantly, financial support by the various countries involved.
What is the IMEC?
The India-Middle East-Europe Corridor (IMEC) was first announced in 2023 through an MoU signed between India, Saudi Arabia, the European Union (EU), the United Arab Emirates (UAE), France, Germany, Italy, and the United States on the sidelines of the G20 Summit in New New Delhi. At its core, IMEC is a trans-continental trade corridor which aims to significantly increase economic integration between the Indian, Middle Eastern and European markets. The project envisions an ambitious connectivity network that starts by sea from the western coast of India to the United Arab Emirates, then across the Middle East (Saudia Arabia, Jordan) through rail to Israel, and then a maritime route into Europe via Greece (or Italy or France). Along the way, hydrogen pipelines and optical data cables (undersea) are expected to be laid down.
Why was the IMEC proposed? What is its Significance to India?
The IMEC’s strategic logic is underpinned by multiple drivers. The West is wary of Beijing’s growing geopolitical and geo-economic inroads into the Middle East, and the IMEC has been touted by Western experts as G7’s answer to China’s Belt and Road Initiative (BRI). Furthermore, the Red Sea crisis (re) demonstrated the need for an alternative to the Suez Canal. For Saudi Arabia and the UAE, IMEC ties into their economic diversification (beyond oil) efforts. For instance, the conceived hydrogen pipelines could help stimulate a vital new sector for Gulf economies (as hydrogen-based “transition” fuels are produced from fossil fuel-based processes) and simultaneously serve the purpose of de-carbonization.
Meanwhile, as India seeks to double down on its export-centred growth model, IMEC would provide Indian industrial products much-needed access to European markets and further integration into global supply chains, especially as a hypothetical land route (through Pakistan, Afghanistan, Iran, Central Asia, etc.) can be expected to remain inaccessible for the foreseeable future. The inter-continental movement of goods assumes further significance for India in the context of its Free Trade Agreement with the UAE and FTA talks underway with the EU. Furthermore, IMEC’s expansive vision will foster advancements in integrated electricity grids, green energy flow, secure high-speed data connectivity across these regions, and thus foster economic integration beyond mere transport of goods, with positive implications for India’s service sector.
What are the Challenges Faced by IMEC?
Yet, the IMEC faces significant challenges ahead and to implement and operationalise the project may take many years. To begin with, the Middle East will take some time yet to stabilise, and whether a diplomatic breakthrough can lead to the normalisation of Israel-Saudi Arabia relations remains uncertain. This is a predominant factor for IMCE’s future implementation not only because the Haifa port in Israel is a key transition point for the North Corridor (towards Europe) but also because ensuring the safety of various infrastructure projects within the IMEC framework may require robust regional security cooperation between stakeholders.
At the logistical level, there are key gaps in the rail network on the Saudi peninsula—estimated at more than a thousand km of missing rail links between the UAE, Saudi Arabia, and Israel. Much of this passes through rugged terrain, which complicates construction as well as renders it expensive. The adoption of common standards–identical gauge, engine technology, container dimensions–is another task. Meanwhile, the hydrogen pipelines and undersea cables are still at the feasibility-study stage, and it’s unclear how complicated their construction may be.
The IMEC will also have to navigate the realm of geopolitical contentions and complexities. Turkey and Egypt are key players in the region who have been excluded and could challenge its implementation. One day after IMEC’s first announcement, Turkish President Erdogan had declared, “There’s no corridor without Turkey” – a reference to the shipping route between Israel and Greece, which passes through waters disputed by the Ankara. Similarly, Cairo has a clear interest in maintaining the salience of the profitable Suez cannal intact.
In Greece, which is keen to collaborate with India, a Chinese shipping company Cosco happens to be the majority stakeholder in the largest port in Eastern Europe, Piraeus, and Beijing could leverage the same to play spoiler. It’s noteworthy, however, that Italy and France have already pitched themselves as alternatives.
Finally, IMEC’s ultimate test will be the stakeholders’ willingness to finance key elements of the project, amidst a high geopolitical risk enivornment. So far, Saudi Arabia alone has committed money, $20 billion, to the project, which is a fraction of the $600 billion that partner countries have committed to mobilise by 2027. The MoU signed for IMEC does not impose any financial obligations on stakeholder countries, and experts anticipate a bulk of the funding to come through the G7’s Partnership for Global Infrastructure and Investment. However, in a world economy increasingly characterized by trade tensions, financial downturns amidst the larger trend of de-globalization, whether or how soon the IMEC–in essence, an economic integration project–recieves meaningful support beyond the rhetorical level is an open question.
