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India–Middle East–Europe Economic Corridor (IMEC) & the Gaza Conflict

11.08.2025

 

India–Middle East–Europe Economic Corridor (IMEC) & the Gaza Conflict

 

Context

In August 2025, India convened representatives from partner countries to review progress on the India–Middle East–Europe Economic Corridor (IMEC). Discussions centred on trade facilitation, energy cooperation, and digital connectivity. However, ongoing instability in the Middle East—particularly the Gaza war—has slowed parts of the project.

 

IMEC

  • Announcement: First introduced at the G20 Summit in New Delhi (September 2023).
     
  • Member Nations: India, Saudi Arabia, UAE, EU, France, Italy, Germany, USA, Israel, and Jordan.
     

Planned Route:

  • Eastern Section: From western Indian ports by sea to the UAE, then overland by rail through Saudi Arabia and Jordan to Haifa in Israel.
     
  • Western Section: From Haifa by sea to ports in Greece or Italy, and onward via Europe’s rail network.
     

Core Elements:

  • High-speed freight railway across the Arabian Peninsula.
     
  • Pipelines to transport clean hydrogen.
     
  • Undersea digital cables such as the Blue Raman line (Mumbai–Genoa).
     
  • Streamlined trade regulations to reduce transit costs and delays.


 

 

Significance for India

Economic & Trade Integration:

  • The EU is India’s top trading partner, with bilateral trade reaching $137.41 billion in FY 2023–24.
     
  • New routes could bypass congested passages like the Suez Canal, improving cost efficiency and reliability.
     

Energy Transition:

  • Opportunity to embed India into the global green hydrogen supply network.
     
  • Stronger alignment with Gulf energy systems supports India’s shift to cleaner fuels.
     

Digital Connectivity:

  • Subsea cable projects enhance India’s role as a digital hub linking Asia and Europe.
     
  • Complementary to India’s growth in AI, fintech, and cloud services.
     

Strategic Positioning:

  • Establishes India as a connector between three regions: Asia, the Middle East, and Europe.
     
  • Presents an alternative to China’s Belt and Road Initiative (BRI).
     

Opportunities for India

  1. Market Expansion: Shorter transit to Europe boosts export competitiveness.
     
  2. Clean Energy Leadership: Position as a supplier of renewable hydrogen to Europe and Gulf partners.
     
  3. Digital Infrastructure Hub: Serve as the main data link between Asia and Europe via the Blue Raman cable.
     
  4. Supply Chain Resilience: Reduce exposure to disruptions in the Red Sea or Strait of Hormuz.
     
  5. Geopolitical Influence: Shape connectivity norms and regional trade frameworks.
     

 

Key Challenges

Regional Instability:

  • The Gaza war has slowed moves toward normalising ties between Israel and Gulf states.
     
  • Relations between Jordan and Israel remain tense.
     

Economic Competition:

  • Saudi Arabia and UAE competing to dominate regional logistics could slow decision-making.
     

Infrastructure Shortfalls:

  • The planned cross-peninsula rail network is still underdeveloped.
     
  • Lack of common tariffs, port capacities, and insurance systems across the corridor.
     

Security Threats:

  • Escalating conflicts in nearby regions (Yemen, Lebanon, Syria) may increase transport risks and insurance costs.
     

 

Way Forward

  • Advance Eastern Links: Build sea and rail ties with Gulf states that function independently of the Israel route.
     
  • Strengthen Energy Partnerships: Fast-track green hydrogen projects with Gulf partners aimed at European markets.
     
  • Invest in Digital Routes: Expand subsea cable systems and related infrastructure.
     
  • Broaden Port Connectivity: Diversify terminal points to avoid reliance on any single chokepoint.
     
  • Maintain Diplomatic Neutrality: Engage all sides to keep the project viable while avoiding alignment in regional conflicts.
     

 

Conclusion

The IMEC project has the potential to reshape connectivity between Asia, the Middle East, and Europe, offering benefits in trade, energy, and technology. Yet, its progress will depend on sustained diplomacy and regional stability. For India, pushing ahead with the eastern segment while waiting for geopolitical conditions to improve could secure long-term strategic and economic gains.

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