Abstract
Leaders from India,
United States (US), United Arab Emirates (UAE), Saudi Arabia, Italy, France,
Germany, and the European Commission met at the G-20 summit in New Delhi and
announced the India-Middle East-Europe Economic Corridor (IMEC). IMEC aims to
stimulate economic development through enhanced connectivity and economic
integration between Asia and the west. Comprising an eastern corridor that
connects India to the Arabian Peninsula and a northern one that connects the
Arabian Peninsula to Europe, IMEC has the potential to transform the economic
landscape and geopolitics of the region. Actively supported by US and enabled
by peace initiatives such as Abraham Accords, IMEC will boost multilateral
engagements and multi-polarity. An indicator of broad strategic convergence
amongst participants, IMEC nonetheless, must overcome some critical challenges
in areas of funding, interoperability and harmonising different systems and
policies. Geopolitical challenges such as the Hamas-Israel conflict and Chinese
chequers will have to be addressed with adroit diplomacy. A promising
initiative with sustainable development at its core, IMEC will add to India’s
influence in the region.
Introduction
The need to
establish geographical connectivity dates to the earliest human civilisations. When
European powers discovered the sea route to India, they not only established
connectivity with India but in a wider sense with Asia. Along with trade, the
major European powers of the time were also able to expand their power, influence,
and interests in Asia. Thus, connectivity was a tool effectively used for
furthering geopolitics. Information from archives reveals that between 1857 and
1900, there were connectivity corridors proposed from Moscow to Delhi, London
to Delhi and Berlin to Delhi.1 Each of these proposals had geostrategic
calculations at their core. As time passed, the means of connectivity have
improved and now encompass not just the physical but also the digital domain.
The benefits of globalisation and economic inter-dependence require more
efficient ways of connectivity. Although sub-regional connectivity corridors
did exist, China’s announcement in 2013 of launching the Silk Road Economic
Belt and in 2014, of the 21st Century Maritime Silk Road made the world take
notice. Subsequently rechristened ‘Belt and Road Initiative’ (BRI), these two
connectivity initiatives involve projects worth over USD 1 tn.
Very soon, the strategic drivers behind
BRI were evident to the world. India has steadfastly refused to join BRI, flagging
its lack of transparency and sustainability. Soon, more countries, especially
the United States (US) and some European ones, came to view BRI with suspicion.
It was in this backdrop that the European Union (EU) came up with a ‘EU-Asia
Connectivity Strategy’ in 2018. The objective of the strategy was to enhance
connectivity in a rule-based and sustainable manner by means of infrastructure
upgrades, guarantee of internationally agreed standards, sound financing and
respect for sovereignty of partner countries. The signing of the EU-Japan
Connectivity Partnership on 27 Sep 2019 and establishment of the EU-India
Connectivity Partnership on 08 May 20212 set the Europe-Asia connectivity project
going.
Setting
the Stage: Geopolitical Developments
The
onset and havoc caused by the COVID pandemic, led to disruption and delays in
the Europe-Asia connectivity project. Chinese inroads into the Middle East
necessitated getting major regional players there, such as Saudi Arabia and
United Arab Emirates (UAE) on board. The economic prowess of these two
countries also weighed heavily in this attempt. Any connectivity project of
this nature was also dependent upon a semblance of peace in the traditionally
conflict-ridden Middle East. Mediated by US, the first step was the signing of
the Abraham Accord between UAE, Israel, and Bahrain in 2020. This was soon
followed by India, Israel, UAE, and US coming together in 2021 to form a group
known as I2U2. As stated in the joint statement during the I2U2 Leaders’ summit
in 2022, the group aimed to, ‘harness the vibrancy of our societies and
entrepreneurial spirit to tackle some of the greatest challenges confronting
our world, with a particular focus on joint investments and new initiatives in
water, energy, transportation, space, health, and food security’.3
Meanwhile India stepped up diplomatic
engagement with Saudi Arabia and resumed negotiations for the India-Gulf
Cooperation Council (GCC) Free Trade Agreement. The US brokered effort to
normalise relations between Saudi Arabia and Israel was an equally important
factor to prevent derailing any connectivity project between Europe and Asia.
Birth
of India-Middle East-Europe Economic Corridor
Leaders
of India, US, UAE, Saudi Arabia, Italy, France, Germany, and the European Commission
met on the side-lines of the G-20 summit at New Delhi on 09 Sep 2023 and
announced their shared ambition of creating an India-Middle East-Europe
Economic Corridor (IMEC). A Memorandum of Understanding (MoU) was signed by
India, US, Saudi Arabia, UAE, France, Germany, EU, and Italy.4 It spelt the broad contours of political
commitments of the participants.
MoU
on IMEC: Salient Features
The IMEC aims to stimulate economic
development through enhanced connectivity and economic integration between Asia,
the Arabian Gulf, and Europe. The IMEC will comprise two corridors, the east
corridor connecting India to the Arabian Gulf and the northern corridor
connecting the Arabian Gulf to Europe. Along the railway route, participants
intend to enable the laying of cable for electricity and digital connectivity,
as well as pipelines for clean hydrogen export. This corridor will secure
regional supply chains, increase trade accessibility, improve trade
facilitation, and support an increased emphasis on environmental, social, and
government impacts.5 As per
the MoU, the participating countries have been given sixty days to develop and
commit to an action plan with relevant timetables.
Economic
and Developmental Advantages of IMEC
In
connecting India with Europe via the Middle East, the trade between the east
and the west is expected to witness a massive flow of goods, services,
technologies, and energy through partner nations. IMEC is expected to reduce
shipping and transportation costs while simultaneously achieving the
sustainable development goals.
IMEC has existing linkages in place and
is more of a ‘plug and play’ type of corridor. In the eastern corridor, goods
from India would be transported by sea to UAE from where they would be
transported by rail. The rail route from UAE is likely to go to Al Ghweifat on
the Saudi border, a 605 km stretch where an Etihad Rail track is already
operational. A 250 km section from the Saudi-UAE border to Haradh is under
construction, while a 1,392 km long railway line from Haradh to Al Haditha on
the Saudi-Jordan border is already in place. That only leaves a 300 km stretch
from Al Haditha to Haifa in Israel via Beit She’an on the Jordan-Israel border.6 A good chunk of the physical rail
infrastructure is, therefore, already in place. The northern leg of the
corridor will commence in Haifa and use the sea route up to Piraeus in Greece.
Thereafter the European rail network will be used to transport the goods to
their final destinations.
A major advantage of IMEC is in reducing
the dependence on the Suez Canal. Moreover, through IMEC, goods from Mumbai can
reach Europe in 10 days, which is 40 per cent faster than through the Suez
Canal. The spill-over benefits could include lower cost and enhanced
reliability. The emphasis on digital connectivity in the MoU indicates two
imperatives, cyber security, and a potential advantage to India for exporting
information technology enabled services to Middle East and Europe.
The laying of cables for electricity
grids mentioned in the MoU can be correlated to India’s leadership of the
International Solar Alliance, under which it has promoted the ‘One Sun, One
World, One Grid’ initiative; an ambitious attempt to connect the world’s key
regional grids into a common green grid that can transfer renewable energy from
one region to another. It would leverage different time zones to maximise the
use of solar energy and reduce the need for expensive energy storage systems.7 Thus, it is significant from an Indian perspective.
The intent to incorporate green hydrogen
pipelines in IMEC is a visionary step. Existing investments worth billions of
dollars by Indian, UAE and Saudi companies in green hydrogen projects are the
first step towards developing intercontinental green transit connectivity
between Asia with Europe.
International trade will get a boost
with IMEC by reducing the cost of trading, promoting market access, and
encouraging investment opportunities between the participating countries.8 Notably, the enhanced connectivity
can improve cross-border cooperation, ensure clean energy supply, and
logistical efficiencies. C Raja Mohan has opined that IMEC also enhances
connectivity within the Middle East. It gives India’s ambitions for
connectivity a new life, especially since none of our previous connectivity
projects such as Iran-Pakistan-India or Turkmenistan-Afghanistan-Pakistan-India
have really taken off.9
Geopolitical
Advantages of IMEC
Post
the end of the cold war and the two Iraq wars, US and Europe had withdrawn
their leadership role in the Middle East leaving a sort of vacuum. Lately,
China sought to fill this vacuum. However, China has not been able to provide
the security guarantees that the Saudis sought. IMEC heralds the repositioning
and willingness of US and EU to engage in the region once again substantially
with multiple stakeholders. It may serve as a catalyst for increased diplomatic
collaboration and geopolitical stability among the participating nations. Close
economic ties resulting from the corridor will incentivise collaboration on
various fronts, including security, counterterrorism, and regional stability.10 Spurred by a shared economic
interest, avenues for cooperation, dialogue, and diplomacy will broaden thereby
ensuring a favourable geopolitical equilibrium. The IMEC provides Europe with
the opportunity to shape policies in specific Asian regions.11
The corridor and its potential benefits
are likely to favour multilateralism and multipolarity, which fits well with
Indian foreign policy. For too long we were fixated around the various
conflicts such as Arab-Israel, and the cause of Palestine. The importance and
linkage of the Middle East region to our growth and aspiration of being a great
power emerged only about three decades ago. IMEC heralds a shift in our
thinking and engagement with the Middle East while consolidating India’s
geoeconomic outreach to the Middle East.12 It can provide secure connectivity and upgrade
ties with Arab states where there is a large Indian diaspora. By collaborating
closely with diverse countries to establish the IMEC, India has demonstrated
its ability to generate innovative ideas. IMEC is an opportunity for India to
secure greater economic leverage over China and Pakistan by joining a natural
alternative to the BRI. In the past, Pakistan has essentially maintained a veto
on overland connectivity between India and the west. IMEC will break this
Pakistani veto, opening vistas to more economic integration between India and
Europe via the Middle East.13
Seriousness of the China challenge has
galvanised many of the ‘China affected countries’ such as India, US, Japan, and
many European ones to devise mitigation strategies. China’s opacity and
suspected role in creating the COVID pandemic was the ultimate ‘wake-up’ call.
Using the BRI to assert its hegemony, China was able to pursue its dream of a
‘Sinocentric’ world order for almost a decade. However, the pushback has begun
and IMEC is an important component of it. IMEC also signals a refreshingly
different approach by the US and EU in its engagement with Asia, one that
heralds the possibility of peace, stability, and growth.
Challenges
to IMEC
Although
the promise of IMEC is great, there are several critical challenges. Among the
foremost challenges for the IMEC is navigating the complex geopolitics of the
region. Different operating philosophies, varying political interests, and a
history of tensions may complicate cooperation. Presently, neither is all
infrastructure in place nor is it interoperable. Creating an integrated
trans-continental transportation system that covers vast distances over varied
terrain poses significant logistical challenges. Addressing logistical issues
such as customs procedures, border regulations, and transportation delays would
be critical to preventing bottlenecks and ensuring smooth trade flows.14 The different legal systems, trade protocols,
and regulations of participating countries would require smooth harmonising to
overcome bureaucratic hurdles. Ensuring regulatory convergence is complex and
could potentially create conflicts of interest. The IMEC has too many
transhipment points and different modes of transportation. All these factors
require thorough planning and coordination. Domestic politics of participating
countries may create pressure towards embracing protectionism.
The announcement of IMEC made Turkish
President, Recep Erdogan bitter about his country’s exclusion. The day after
the corridor was announced, Erdogan asserted that “there is no corridor without
Turkey”. He added that “the most convenient line for traffic from east to west
has to pass through Turkey”.15 Egypt earns roughly USD 10 bn annually from
traffic plying through the Suez Canal16 and may not be too happy with IMEC as it may
result in reducing its revenues. The outbreak of hostilities between Hamas and
Israel since 07 Oct has complicated matters for the IMEC. Saudi Arabia has
reportedly suspended talks with Israel for normalisation of relations.17 Addressing these challenges will require
considerable diplomatic finesse.
Large-scale infrastructure projects such
as IMEC require substantial financial resources and one of the critical
challenges is to secure adequate funding in a timely manner. Creative financing
options are hence required. Another challenge is the large Chinese economic
footprint over the Middle East and Europe. Bilateral trade between India and
the EU in 2022 amounted to USD 163.23 bn18 whereas between EU and China, it
stood at USD 1015.70 bn.19 While India GCC bilateral trade in 2022 was
USD 154.73 bn,20 the China-GCC bilateral trade in
2020 itself was USD 161.4 bn.21 Viability
of IMEC depends on increasing the trade volume between India, the Middle East
and Europe, which in turn depends upon economic growth and demand in these
regions.22 It is therefore imperative that India
dramatically expands its manufacturing capacity to be able to increase the
volume of its exports and thereby make the corridor economically viable.
Conclusion
The
countries participating in IMEC constitute 40 per cent of the world’s
population and roughly 50 per cent of the global economy.23 The IMEC signatories are scheduled to meet in
Nov 2023 to announce an action plan. In the absence of details, it is
speculative if IMEC involves lateral corridors connecting the main one. The
development of feeder routes which would generate additional traffic to and
from ports, manufacturing hubs and consumption centres is a proposition worth
considering. Connecting Duqm port in Oman (three-day ship journey from Mumbai)
by rail to Riyadh could further reduce transit time and logistics costs
significantly.24 Notwithstanding its infancy, the
IMEC is a promising project that heralds an optimistic chapter in connectivity
and globalisation. Conceptually, IMEC is significantly ahead of other such
initiatives and if implemented properly, has the potential to economically
integrate Asia, Europe, and the Middle East.
A combination of technology, capital and political resolve can make IMEC
into a ‘Green Corridor’ that ushers a new era in our quest towards a cleaner
and sustainable planet.
Comparisons with BRI are inevitable, and
China will not sit tight as it views IMEC as strategic competition. In
repositioning geopolitical relations and partnerships through IMEC; India, US
and EU have demonstrated their commitment to ‘de-risk’ from China. IMEC will
boost multilateral engagements and multi-polarity. It fits well and broadly
converges with the strategic outlook of the participating countries.
Importantly, it increases the strategic space for India, adding to our stature,
growth, and influence in the region.
“IMEC
is much more than just a railway or a cable. It is a green and digital bridge
across continents and civilisations”.
- European
Commission President, Ursula von der Leyen.
Endnotes
1 Omair Anas, Seminar on ‘IMEC: The Challenge
Ahead’, organised by Asia Society India, New Delhi on October 09,2023
2 https://bmdv.bund.de/EN/Topics/EU-Policy/Bilateral-and-Multilateral-Relations-With-the-EU/EU-Asia-Connectivitystrategy/eu-asia-connectivity
strategy.html accessed on 14 October 2023
3 https://www.whitehouse.gov/briefing-room/statements-releases/2022/07/14/joint-statement-of-the-leaders-of-india-israel-united-arab-emirates-and-the-united-states-i2u2/
accessed on 14 October 2023
4 https://www.mea.gov.in/Images/CPV/Project-Gateway-Multilateral-MOU.pdf
accessed on 14 October 2023
5 Ibid
6 Navdeep Suri, “Green Corridor Project Raises
Hopes Amid Challenges”, The Tribune, September 16, 2023
7 Ibid
8 Mohamed ELDoh, “The India-Middle East-Europe
Corridor: Challenges Ahead”, September 26, 2023
(https://www.geopoliticalmonitor.com/the-india-middle-east-europe-corridor-challenges-ahead/
accessed on 12 Oct 23)
9 C Raja Mohan, Seminar on ‘IMEC: The Challenge
Ahead’, New Delhi, October 09, 2023
10 Mohamed ELDoh, loc,cit.
11 Ummu S Bava, Seminar on ‘IMEC: The Challenge
Ahead’, New Delhi, October 09, 2023
12 Sabena Siddiqui, “Impact of
India-Mideast-Europe Corridor Extends Far Beyond Countering China”, AL
Monitor October 02, 2023
13 Giorgio Cafiero, “The Geopolitics of the
India-Middle East-Europe Economic Corridor”, October 10, 2023 available at
https://arabcenterdc.org/resource/the-geopolitics-of-the-india-middle-east-europe-economic-corridor/
accessed on 12 Oct 23
14 Mohamed ELDoh, loc, cit.
15 Dov S. Zakheim, “Gaming Out the Consequences
of an India-Middle East-Europe Economic Corridor”, September 15, 2023 available
at
https://thehill.com/opinion/international/4205381-gaming-out-the-consequences-of-an-india-middle-east-europe-economic-corridor/
accessed on 12 Oct 23
16 Omair Anas, loc,cit.
17 The Times of India, Mumbai, October 14,
2023
18https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india_en
accessed on 16 October 2023
19https://www.europarl.europa.eu/RegData/etudes/ATAG/2023/753952/EPRS_ATA(2023)753952_EN.pdf
20 https://www.silkroadbriefing.com/news/2023/09/11/the-proposed-india-middle-east-corridor-is-set-to-reshape-eurasian-connectivity-but-challenges-will-persist/
accessed on 12 Oct 23
21https://mecouncil.org/publication/china-gcc-relations-past-present-and-future-trajectories-2/
accessed on 16 October 2023
22 Ahmed Aboudouh, “An India–Middle East–Europe
Corridor is Unlikely to Boost Saudi–Israel Normalization”, September 15, 2023
available at
https://www.chathamhouse.org/2023/09/india-middle-east-europe-corridor-unlikely-boost-saudi-israel-normalization
accessed on 12 October 2023
23 Giorgio Cafiero, “The Geopolitics of the
India-Middle East-Europe Economic Corridor”, October 10, 2023 available at
https://arabcenterdc.org/resource/the-geopolitics-of-the-india-middle-east-europe-economic-corridor/
accessed on 12 Oct 23
24 M Jamshed, “Mumbai to Marseilles: Why IMEEC is
a Breakthrough for 21st-century Globalisation’
September 25, 2023 available at
https://www.moneycontrol.com/news/opinion/mumbai-to-marseilles-why-imeec-is-a-breakthrough-for-21st-century-globalisation-11420451.html
accessed on 12 Oct 2023
@Group
Captain Praveer Ashok Purohit (retd)
served
in the Indian Air Force for over 32 years. A Qualified Flying Instructor with
over 5500 hours of flying experience, he has flown over all types of terrain.
He is a post graduate from Defence Services Staff College and has completed M.
Phil in Defence & Management while undergoing Higher Command Course. He is
a winner of the Lt Gen SL Menezes Essay competition in 2020. He writes extensively
on defence, strategic affairs and geopolitics, and his papers/articles/book
reviews and opinion pieces have appeared newspapers and publications.
Journal
of the United Service Institution of India,
Vol. CLIII, No. 634, October-December 2023.