MANTRAYA ANALYSIS#74: 09 NOVEMBER 2023
BIBHU PRASAD ROUTRAY
Abstract
The ambitious India-Middle East- Europe Corridor Project could become collateral for the ongoing war in Gaza. Israel’s refusal to halt its offensive in Gaza has heralded the prospect of a wider regional confrontation affecting the Gulf region. Although partners of the IMEC project have large stakes in the project, escalation of the conflict could make it, pitted as a rival to China’s Belt Road Initiative (BRI), geopolitically unviable.
(Proposed route for the IMEC)
Introduction
Discussions on the India-Middle Europe Corridor (IMEC) are expected to figure in the upcoming 2+2 dialogue between India and the US in New Delhi on 9-10 November. This will be the first occasion that the two partners of the ambitious project could draw the contours on the future of the project, after the 7 October attack carried out by Hamas on Israel and the subsequent war launched by Israel in Gaza. The impact of the development in the Middle East, which has widened the faultlines between Israel and the Arab world, on the prospect of the IMEC’s fruition is significant. The project would invariably be delayed. Worse still, if not handled carefully, it may never see the light of the day.
Abraham Accords and the G20 Launch
Launched on the sidelines of the G20 summit in New Delhi in September 2023, with India, the U.S., Saudi Arabia, UAE, France, Germany, Italy and the EU signing the MoU, the IMEC is critically linked to the Abraham Accords, a series of agreements signed in the latter half of 2020, to normalize relations between Israel and several Arab states. It is also linked to the upgradation of the frosty relationship between U.S. President Joe Biden and Saudi Crown Prince Mohammed bin Salman, from an awkward fist bump in 2022 to a firm handshake as they came together to announce the IMEC.
The IMEC proposes to bolster transportation and communication links between Europe and Asia through rail and shipping networks. IMEC’s ambitions transcend the narrow scope of trade and economics to include everything from electricity grids to cybersecurity – building on conversations that have taken place in security forums like the Quad. A former Indian diplomat wrote, “If the lofty ambitions outlined in New Delhi can become a reality, they would make a singular contribution to a safer, more habitable planet.”
America does not benefit materially from being part of the project. The project spans between India and Europe. However, the US interest in becoming a firm part of the same project may be seen as a counter to China’s Belt and Road Initiative (BRI), a global infrastructure-building project that connects China with Southeast Asia, Central Asia, Russia and Europe. Although the comparisons between the two projects could be somewhat misplaced—the BRI being in existence for far longer and much grander in its objectives—the IMEC is certainly of immense importance to India, the U.S. and also Israel. A White House readout of the meeting between President Biden and Israel’s Prime Minister Benjamin Netanyahu in September 2023 noted that they had spoken about progress towards establishing “a more integrated, prosperous, and peaceful Middle East region, including through efforts to deepen and expand normalisation with countries in the region”.
Sketchy on Details
The IMEC aims to connect India to Europe with a route that runs through the UAE, Saudi Arabia, Jordan, Israel and Greece. Comprising two corridors, the IMEC’s Eastern Corridor will connect India to the Gulf region and the Northern Corridor will connect the Gulf region to Europe. Three Indian ports (Mundra and Kandla in Gujarat, and Jawaharlal Nehru Port in Mumbai) will be connected to five ports in the Middle East (Fujairah, Jebel Ali, and Abu Dhabi in the UAE and Dammam and Ras Al Khair ports in Saudi Arabia). Further connectivity from the five ports in the UAE and Saudi Arabia will be through rail route connectivity to Israel’s Haifa port. The IMEC proposes to use both the already existing Brownfield projects and to-be-constructed Greenfield projects.
For the freight from Haifa port onward to Europe, the northern corridor comes into the picture. This corridor will start with the sea route from Haifa to three ports in Europe: Piraeus in Greece, Messina in South Italy, and Marseille in France. From those ports, the existing European rail networks will take the freight to their final destinations.
Except for the potential geography of a corridor, however, the IMEC’s MoU document is thin in detail. Time frames, identification of key government agencies who will underwrite the investments, and the investments to be made by respective partners are all undecided. Sizeable portions of the proposed rail corridor are absent and so are discussions to bring harmonization of standards. Thus, making the IMEC happen remains enormously complex. An action plan was expected in the next 60 days since the launch of the project. That is unlikely to happen anytime soon.
At the time of its announcement, experts had pointed out the geopolitical complexities of navigating ties between partner countries such as the US, Israel and Saudi Arabia who often don’t see eye to eye. The possibility of the tactical cooperation, thus, going awry was high. This reality appeared to have struck far too soon.
Abraham Accords and IMEC on Thin Ice
The war in Gaza has threatened to trigger a broader conflict that draws in the Gulf states, who had hoped for de-escalation in the region, allowing them to focus on ambitious plans to diversify their economies. It certainly has had a significant impact on Israel’s normalization of relations with the Arab countries. In the immediate aftermath of the 7 October incident, the UAE and Bahrain criticised the attacks by Hamas. However, as days progressed and Israel’s military campaign in Gaza continued to claim civilian lives, the position changed.
Bahrain on 2 November recalled its ambassador from Israel and suspended trade ties with Tel Aviv. Israeli ambassador too has left Manama. In a statement, the Bahraini Parliament has reiterated its ‘historic and firm position in support of the Palestinian cause and the legitimate rights of the brotherly Palestinian people’.
The UAE is one of the United States’ closest partners in the Middle East and hosts U.S. forces, has pursued a more independent and assertive foreign policy over the past decade. It wants to weaken the Hamas. Although odd UAE officials have reiterated their faith in the validity of the Abraham Accords, the Emirate has termed Israel’s response as ‘disproportionate’ and a failure of Tel Aviv’s two-decades-old containment policy on the Palestinian issue. Diplomatic Advisor to the UAE President said on 4 November that the U.S. needs to push for a quick end to the Israel-Hamas war and a new process to resolve the decades-old Israeli-Palestinian issue or Washington will be seen as ineffective.
Countries like Kuwait, Oman and Qatar have been critical of Israel. Qatar, an American ally, supports the Hamas and Doha is home to some of the Hamas leadership including Ismail Haniyeh. The emirate donates up to $30m a month to Gaza. Saudi Arabia has tried to strike a balance, although it has called out the “Israeli occupation forces”, without condemning the Hamas attacks., the worsening humanitarian crisis and the Israeli refusal to announce either a ceasefire or even consider a humanitarian pause won’t make the task of the most committed supporters of the Accords a smooth affair. The war in Gaza puts enormous stress on the prospects of Saudi-Iran rapprochement.
President Biden saw a wider conspiracy in the Hamas attack on Israel, i.e. to prevent a peace deal between Riyadh and Israel. “I was about to sit down with the Saudis….the Saudis wanted to recognise Israel,” he said. There is little evidence for this claim. But the U.S. has spent much of its energy on the deal between Riyadh and Tel Aviv to takeoff, in return for a defence pact between Riyadh and Washington. The U.S. has reasons to feel that the Israeli war and its compulsion to support and finance it, are making the IMEC’s road bumpier than usual. In the prospect of the war escalating into a regional conflict, the project could come to a grinding halt.
Hoping against hope
On 3 November, India’s foreign minister S. Jaishankar said that while the situation in West Asia is very complex, the master plan for the IMEC corridor is still intact. “IMEC is very much a part of the global legacy and has been a trade route for hundreds of years. There is enormous interest in Europe for the IMEC and for a seamless logistics passage to India”, he said in New Delhi. The minister’s statement brings out the enormous stake New Delhi has in the project. Prime Minister Modi has said that this transport corridor ‘will become the basis of world trade for hundreds of years to come’.
Once complete, IMEC would help promote economic integration between India and Europe. Since the current destination for most of India’s engineering exports is primarily the Middle East and Europe, the IMEC would be able to increase these exports manifold. In addition, the IMEC could potentially facilitate the export of India’s IT services to Europe and the Middle East. The IMEC would also offer India the opportunity to create green hydrogen and green ammonia hubs near the coasts and supply the commodities via shipping and rail networks to the Middle East and eventually Europe. The inclusion of electricity grids in the framework of the Corridor is particularly significant from an Indian perspective, making the export deliverables much more efficient and cost-effective thereby adding to their competitiveness.
In any connectivity project involving multiple partners, each member state plays a critical part in the execution and operationalisation of the project. Neither India, the U.S. nor the European interest in the project can guarantee its initiation. The war in Gaza doesn’t necessarily mark the end of the road for the IMEC. However, it certainly has the potential of inordinately delaying or even derailing the project. Two conditions need to be fulfilled to revive the IMEC’s prospects. Firstly, the war in Gaza must come to a halt urgently. Secondly, quiet diplomacy rather than publicity-seeking announcements should be the strategy to ensure that the project remains on track.
Additional References
Nikhil Inamdar, “Can India-Europe corridor rival China’s Belt and Road?”, BBC, 2 October 2023, https://www.bbc.com/news/world-asia-india-66957019.
“Why Saudi Arabia and the UAE want to keep links with Israel”, Economist, 22 October 2023, https://www.economist.com/middle-east-and-africa/2023/10/22/are-the-abraham-accords-over.
“India-Middle East-EU corridor to have multiple routes, but hurdles remain”, The Hindu, 16 September 2023, https://www.thehindu.com/news/national/multiple-routes-proposed-in-india-middle-east-eu-corridor-but-multi-billion-dollar-project-comes-with-its-share-of-challenges/article67315835.ece
(Dr. Bibhu Prasad Routray is the Director of Mantraya. This analysis has been published as part of Mantraya’s ongoing “Regional Economic Cooperation and Connectivity in South Asia” project. All Mantraya publications are peer-reviewed.)
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