India-Middle East-Europe Economic Corridor (IMEC)

News: Recently, External Affairs Minister S. Jaishankar’s visit to the UAE and upcoming engagements with Greece and Egypt signal India’s renewed push for advancing the India-Middle East-Europe Economic Corridor (IMEC), which was stalled due to the Israel-Gaza conflict.

About IMEC

• It is a connectivity project aiming to enhance trade between India, the Arabian Peninsula, the Mediterranean region, and Europe.
• It focuses on infrastructure: ports, railways, roads, sea lines, and pipelines. It builds on existing trade routes and fills gaps in connectivity.
• Key Participants: Memorandum of Understanding (MoU) signed during the G20 summit (September 2023, New Delhi) by:
  India, Saudi Arabia, UAE, France, Germany, Italy, the US, and the EU.

Significance of IMEC

• Economic Importance
  • Boosting India-Gulf Trade: It is build on existing trade relations between India and Arab Gulf countries. Also, it enhances India’s economic presence in the region.
  • Connection to Europe: It creates shorter trade routes bypassing Bab al-Mandab and the Suez Canal. It links Gulf countries, Eastern Mediterranean, and Western Europe
• Energy and Trade Opportunities: It give access to Eastern Mediterranean gas fields. It also connects two major trading blocs: EU and GCC.
  • Post-Oil Economy: It also aligns with Gulf countries’ plans for diversification and a knowledge-based economy.
    Strategic and Geopolitical Importance
• Alternative Routes: It complements existing projects like Chabahar Port and the International North-South Transportation Corridor (INSTC). Also, it offers additional trade options connecting southern Eurasia.
  • Counter to China’s Belt and Road Initiative (BRI): It provides a rival project to balance China’s influence in the region.
• India’s Global Aspirations: It enhances India’s connectivity with neighbors and global powers. It also supports India’s growth as a G20 economy and emerging global power.

Challenges

• Economic Viability: Gulf countries are not manufacturing hubs, leading to higher freight costs. It excludes key regional economies like Türkiye, Egypt, Iran, and Iraq.
• Existing Routes: Red Sea and Suez Canal already connect South Asia to Europe effectively.
• Geographic Barriers: Parts of the Arabian Peninsula are barren deserts, posing infrastructure challenges.
• Regional Conflicts: There has been regional instability due to: Israel-Hamas war, Red Sea disruptions by Yemen’s Houthi rebels and Iran-Israel tensions.