The Future of the IMEC

UPSC Syllabus Topic: GS Paper 2 – International relation

Introduction

India seeks to diversify economic links amid friction with the U.S. Alongside bilateral pacts with the U.K. and talks with the EU, India is backing the India-Middle East-Europe Economic Corridor (IMEC). The plan connects India, West Asia, and Europe through upgraded sea lanes, high-speed rail from UAE ports to Haifa via Saudi Arabia and Jordan, and cross-border energy-digital links (clean hydrogen, power cable, undersea data cable) to cut time, costs, and risk. The Future of the IMEC.

About the India-Middle East-Europe Economic Corridor (IMEC)

1. It is a network of transport corridors comprising railway lines and sea lanes to promote economic integration between Asia, the Arabian Gulf, and Europe. The project aims to integrate India, Europe, Middle East through UAE, Saudi Arabia, Jordan, Israel and European Union.
2. It upgrades maritime links between India and the Arabian Peninsula and runs high-speed trains from UAE ports to Haifa via Saudi Arabia and Jordan, with onward shipping to and from Europe.
3. It also plans a clean hydrogen pipeline, an electricity cable, and a high-speed undersea digital cable, while consolidating port infrastructure.
4. It was unveiled at the G20 summit in New Delhi in September 2023. A Memorandum of Understanding (MoU) was signed between the Governments of India, the US, Saudi Arabia, the European Union (EU), the UAE, France, Germany and Italy to establish this economic Corridor.
5. The corridor aims to reduce transit times by 40% and transportation costs by 30% as compared to the Suez Canal route.

Significance of the IMEC

1. Resilient connectivity: Sea-lane security is uncertain. Red Sea disruptions pushed ships around the Cape of Good Hope, raising costs and time. IMEC offers alternative, faster, diversified routes.
2. Mediterranean relevance: Arctic routes may shift trade northward. Mediterranean economies, especially Italy, see IMEC as a way to preserve maritime centrality. This keeps Europe–West Asia–India links strong.
3. Flexible cooperation: As a multi-member initiative, IMEC allows adaptive routing and coordination when geopolitics changes.
4. Counter to China : It is an ambitious counter to China’s BRI project. BRI has created a ‘debt trap’ and has diminished the sovereignty of member countries. It will be a counter to the expansionist policies of China.It also provides an opportunity to counter the growing Chinese geopolitical influence in Middle East.
5. Stability in Middle East – This Corridor aims to bring countries in the Middle East together and establish that region as a hub for economic activity instead of as a “source of challenge, conflict or crisis“ as it has been in recent history.
6. Normalisation of Diplomatic Relations- It also aims to help normalise diplomatic relations in the Middle east with possibility of establishment of diplomatic relations betweenIsrael and Saudi Arabia both of which are part of the project.
7. Expansion of G20 role from purely economic grouping to geo-political grouping- This project is also an attempt to further strengthen the G20 group by expanding the role of G-20 to geo-political domain to counter the dominance of China’s Xi Jinping and Russia’s Vladimir Putin.

Concerns and constraints of the IMEC

1. Security risk in West Asia: The October 7 attacks and subsequent Israeli military actions strained regional ties and cast doubt on feasibility. It is still unclear whether the Gaza peace plan will succeed , so long-term stability for corridor projects is not assured.
2. Competing routes: Climate change is opening a new Arctic sea route. Ships can move between Asia and Europe faster through northern waters. This mainly benefits the U.S., Russia, China, and northern Europe. If trade shifts north, Mediterranean ports lose traffic. That directly weakens a Mediterranean-based IMEC.
3. Non-binding MoU- MoU of IMEC does not create any rights or obligations under international law. The memorandum only sets forth political commitments of its participants which are non-binding.
4. Finance-The Corridor requires massive finance for its construction. Arrangement of such funds is a challenge considering the recession that has been creeping in US and other advanced economies. Scale of investments that can be raised by China is higher than that of the G7. Mobilisation of Private-sector finance also remains a major challenge.
5. Chinese Resistance-This economic corridor also faces the challenge of Chinese pushback as China as already invested heavily in BRI project. It has been making considerable investments in the middle eastern economies like Iran, Saudi Arabia and UAE.

Significance of the IMEC for India

1. Market access and diversification:

• IMEC gives India a stable bridge to Europe at a time of friction with the U.S. Europe matters for its high incomes, advanced technology, and scale. The EU is India’s largest trade partner (over $136 billion).
• Using the Mediterranean route keeps access short and predictable even when other sea lanes face shocks.
• IMEC links—sea, rail, energy, and digital—reduce dependence on any single partner and keep trade flowing when routes elsewhere are disrupted.

2. Regional balance:

• IMEC also strengthens India’s position in West Asia. Deeper economic ties with the UAE and Saudi Arabia turn political goodwill into concrete trade and connectivity.
• This blunts Pakistan’s attempts to build alignments that undercut India.
• With IMEC, India and Europe act as “bookends”: both ends invest and coordinate so that the corridor supports steady trade, investment, energy, and data flows across the region. This shared anchoring improves stability and India’s leverage without overextension.

3. Reduced dependence on Iran- It also provides India an alternate transport corridor route for Europe by reducing over dependence on Chabahar Port and INSTC.
4. Opportunity to join Trans-African Corridor-Trans-African corridor is an envisaged US and the EU plan to build a corridor connecting Angola, the Democratic Republic of Congo, and Zambia. Effective implementation of Indian Middle East Europe Corridor project would increase India’s chances of getting an opportunity to join Trans-African corridor.

Way forward

1. Broaden nodes and routes: Use IMEC’s flexibility to add commercial centres and ports in Saudi Arabia and Egypt and reduce single-point risks.
2. Strengthen Europe links: Scale corridors and logistics with Europe to build resilient supply chains, while monitoring Arctic impacts without over-reliance on them.
3. Establishment of IMEC Secretariat- IMEC secretariat should be established to create structured processes and conduct evidence-based research on project benefits.
4. Establishment of Virtual Trade Corridor- Virtual Trade Corridor like the India-UAE Virtual Trade Corridor can serve as an operational model for other IMEC countries. It would help in reducing administrative burdens, lowering costs, and fostering efficient trade.
5. Strengthening of infrastructure along the eastern corridor- Countries along the eastern route could use the time of West Asian instability to strengthen infrastructure, enhancing regional connectivity and preparing for future IMEC integration.
6. Avoiding the problems created by BRI- The speed of implementation of the corridor and its ability to avoid the problem of financial and ecological sustainability faced by BRI will determine the success of IMEC.

Source – The Hindu