Indian Council of World Affairs

Abstract 

The India-Middle East-Europe Economic Corridor (IMEC) seeks to deepen trans-regional connectivity between Asia and Europe. However, ongoing tensions in the Middle East including the Israel-Palestine conflict and the uncertain trajectory of Saudi-Israel relations will play a decisive role in determining the project's future.

Introduction

During PM Narendra Modi’s visit to the US on 13 February 2025, President Donald Trump lauded IMEC as one of the greatest trade routes in history that connects ports, undersea cables and telecommunication lines across continents.[i] This statement from the US President reaffirms the project’s importance to the US and its partners. This initiative not only involves trade dynamics between the partners but also deals with the security, stability and economic interests of the partners amidst rising challenges related to the COVID-19 pandemic, Russia-Ukraine conflict, Israel-Palestine conflict and the ongoing restructuring of the international system.[ii] This convergence of interests will certainly meet greater economic and strategic interests of the partners. However, the present Middle East tensions, including the Israel-Palestine conflict and the uncertain trajectory of Saudi-Israel relations, will determine the fate of this project.[iii] In this context, this paper aims to identify the challenges and tensions along the corridor and how the geopolitical strategies of the involved actors will influence the implementation of this project.

Background

The genesis of IMEC can be traced back to the Joint Railway project under the India, Israel, the United Arab Emirates, and the United States (I2U2) initiative, which was announced during the inaugural virtual Summit on 14 July 2022. This idea was translated into the India-Middle -East- European Economic Corridor (IMEC) during the G20 Summit in New Delhi, where the partners signed a Memorandum of Understanding to establish a new corridor under the Partnership for Global Infrastructure Investment (PGII).[iv] Along with bypassing fragile checkpoints in the traditional route, it aims to foster economic development and strategic engagement, cut down transit time and costs, enhance connectivity and potentially bring about peace and stability through economic interdependence.[v] During the Indian PM’s recent visit to the US, both the nations, the major stakeholders of this project, reemphasized the need for the revival of the project. The ambitious effort of the partners is in its inception stage due to ongoing geopolitical tensions, logistical hurdles, and uncertainties around project funding.[vi][vii]

The corridor is a convergence of interests of developing and developed countries. India seeks to enhance trade with the US.[viii]The UAE sees it as key to its 2031 economic vision.[ix] The U.S uses it to satisfy its strategic needs in the Middle East and South Asia.[x][xi] European countries, including Germany, France, Greece and Italy view it as a de-risking strategy, positioning key ports to reduce dependence on China and boost connectivity.[xii]

Challenges to IMEC

The Israel-Hamas War

The project has not taken off due to the ongoing conflict between Israel and Hamas. Many analysts predict that Saudi Arabia, a major power in the region, is negotiating for normalisation of ties with Israel. The war has presented significant risks to the region, particularly for the commercial ships in the Red Sea, which have been under attack by Yemen’s Houthis. However, as a result of forceful retaliation by US and Israel, the influence of the Houthis and other militias including Hezbollah and Hamas has diminished. Since then, Iran’s overall influence in the region has been waning. Despite these changes, the geopolitical situation is still fluid in the region, which makes it difficult to predict the operationalisation of this corridor.

Establishment of the New Israeli Security Corridors

Israel has established new corridors such as Morag and Netzarim (Southern Gaza) by occupying the strategic areas of Gaza, heightening the security concerns over the region.[xiii]  These corridors were strategically established to divide the strip into three divisions. This is considered an act of “occupation” or “partition”. The European Union has condemned the act of Israel, which could weaken political consensus around IMEC.[xiv]

Exclusion of Key Regional Players

This project excludes Turkey and Egypt, two important members in the region. The project is an alternative to the Suez Canal route and does not aim to reduce the flow of traffic passing through the canal.[xv] However, many critics have raised the concern that the corridor would reduce the Suez Canal’s revenue, which can affect Egypt’s economy, already facing high international debts and rising inflation.

Turkey

Turkey, a major player in the region, which has been excluded from the project, has launched the Developmental Road Project (DRP) along with Iraq, the UAE and Qatar that aims to foster economic trade between the East and West, bypassing the IMEC in April 2024. It is a 740-mile-long transit route that not only integrates west-east but also the south-north trade and transit hub. Thus, Turkey is pursuing alternative connections to the West.[xvi]

Return of Trump and Abraham Accords 2.0

Trump and Policy Implications

With Trump becoming the US president for the second term on 20 January 2025, the IMEC partners are seeking his support to implement this ambitious project. With the US-China trade war at an all-time high, the US will look for other ways to counter China’s influence in the Indo-Pacific, South Asia and the Middle East. During their recent meeting, Trump and Modi promised a high-level Summit with IMEC partners within six months.[xvii] The corridor not only cut the US security cost but also aided several American infrastructure companies seeking market diversification in the region.

Supercharging Abraham Accords 2.0

Trump’s first term aspired to cool down the tensions between Arab countries and Israel and succeeded in this attempt by mediating the Abraham Accords in 2020. With Trump back in office, the Abraham Accords are expected to be supercharged with the inclusion of more Arab states, particularly Saudi Arabia, Oman and Kazakhstan. Saudi Arabia is an important player in the Middle East whose involvement is crucial for the region’s development and peace. The long-standing conflict between Riyadh and Israel is one of the impediments to the project. But in recent years, Riyadh has been aiming to diversify its market, which is the major goal of Saudi Vision 2030. The US has become its close ally, and it is now interested in mediating the tensions between Riyadh and Israel. On 13 May 2025, the US signed his largest defence cooperation deal with Saudi Arabia, amounting to $142 billion.[xviii] The US could use this deal as leverage to get Saudi Arabia to normalise its ties with Israel. However, it has not materialised yet. Israel views the deal as a path to normalise ties with Saudi Arabia, a counterweight to Iranian influence and an opportunity to obtain further security guarantees and advanced weaponry.

The success of the IMEC corridor depends on the geopolitical stability in the Middle East. The Abraham Accord 2.0 is important for the following reasons:

• Possibility of the normalisation of ties between Israel and Saudi Arabia means that two influential powers in the region are coming together, which would diversify their economies and make strategic security partnerships and defence cooperation.
• The US would ensure its influence in the Middle East, supported by two major powers.
• It proves to be more than an alliance and could create a new balance of power in the region.
• Arab states could use this as a platform to push Israel for meaningful steps towards Palestinian statehood.

Abraham Accords 2.0 offers a path or a way out of the intractable Israel-Palestine problem, which has made peace in the region and beyond hostage for years. Abraham Accords 2.0 will build upon the positive tone established for the broader interfaith framework by Abraham Accords 1.0.

Conclusion

The ambitious IMEC corridor could revive the ancient spice route and offer a new perspective on the present global trade network.[xix] It offers a great deal of economic diversification in this highly interconnected world but it remains hindered by tensions among its partners. To make this project successful, the partners have to be involved actively via diplomatic engagement and strategic planning that would help them build this highly resilient trade route. In this complex interdependent international system, countries are increasingly focused on strategic engagement that supports their political economies and developmental needs, rather than expanding the scope of conflict that might damage their national visions. Once established and functional, the IMEC could alter the geopolitics of the 21st century by reviving old Indo-Mediterranean trade routes and upgrading them technologically for modern connectivity.

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*Bhuvaneshwari R, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal.  

End notes

[i]Digital Desk. (February 14, 2025). India and US partner to develop India-Middle East-Europe Economic Corridor. Republic World. https://tinyurl.com/mrudsvtz.

[ii][ii] Decode39. (February 14, 2025). Italy at the forefront as Trump and Modi revamp IMEC. https://tinyurl.com/awvavxaa.

[iii] Gulf International Forum. (n.d.). The corridor of peace: Can IMEC achieve its lofty goals?https://tinyurl.com/bdd8befx.

[iv] The PGII is committed to accelerate infrastructure development in developing nations, thereby facilitating the achievement of Sustainable Development Goals (SDGs).

[v] Euronews. (May 5, 2025). New India-to-Europe 'spice route' gains traction amid global [v]tensions. https://tinyurl.com/33fsdtmj.

[vi]Gulf International Forum. (n.d.). The corridor of peace: Can IMEC achieve its lofty goals?https://tinyurl.com/bdd8befx.

[vii] Press Information Bureau. (April 16, 2025) India poised to become a trusted bridge of global connectivity through India-Middle East-Europe Economic Corridor (IMEC): Shri Piyush Goyalhttps://tinyurl.com/yc76bxre.

[viii]Gulf International Forum. (n.d.). The corridor of peace: Can IMEC achieve its lofty goals? https://tinyurl.com/bdd8befx.

[ix]Gulf International Forum. (n.d.). The corridor of peace: Can IMEC achieve its lofty goal? https://tinyurl.com/bdd8befx.

[x] Mitchell, G. (January 28, 2025). Making deals, building corridors: Trump’s Middle East moment. War on the Rocks. https://tinyurl.com/mwsubjus.

[xi]The Hindu. (January 21, 2025). Prioritising IMEC is in America’s best interest. https://tinyurl.com/bdd4ku53.

[xii] Euronews. (May 5, 2025). New India-to-Europe 'spice route' gains traction amid global [xii]tensions. https://tinyurl.com/33fsdtmj.

[xiii] The Hindu. (April 12, 2025). Israeli troops deploy to new security corridor ‘Morag’ across southern Gaza. https://tinyurl.com/4pszmwwj.

[xiv]Deutsche Welle. (April 12, 2025). Israel says it has taken over key southern Gaza corridor.https://tinyurl.com/muszj2nx.

[xv]Gulf International Forum. (n.d.). The corridor of peace: Can IMEC achieve its lofty goals? https://tinyurl.com/bdd8befx.

[xvi] Stimson Centre. (May 9, 2024). Turkey seeks to boost its regional profile and security by helping Iraq. https://tinyurl.com/yzydutcm.

[xvii]Kausch, K. (April 11, 2025). IMEC's Comeback. Retrieved from GMF: https://www.gmfus.org/news/imecs-comeback.

[xviii] The Economic Times. (May 13, 2025). US agrees to sell Saudi Arabia $142 billion arms package. https://tinyurl.com/36cfp6mx.

[xix]GIS Reports. (September 26, 2023). The IMEC project: A new trade route emerges. GIS Reports Online. https://tinyurl.com/y6etxc2k.