Indian Council of World Affairs

Introduction 

On September 9, 2023, on the sidelines of the G20[i]  Summit, held under the Presidency of India, a Memorandum of Understanding (MoU) was signed by India, the European Union (EU), Germany, Italy, France, the United States, Saudi Arabia, and the United Arab Emirates (UAE) (participants) in which they committed to work collectively to establish the India–Middle East–Europe Economic Corridor (IMEC), comprising railway lines, sea lines, and road networks. The IMEC will consist of two corridors– the East Corridor connecting India to the Arabian Gulf and the Northern Corridor connecting the Arabian Gulf to Europe. Upon completion, the corridor will have a cost-effective and reliable cross-border railway network, which will be supplemented by the available road transport and maritime routes, facilitating the movement of goods and services between India, the UAE, Saudi Arabia, Jordan, Israel, Greece, and Italy, France, and Germany. In addition, along the corridor, the countries will also lay the network of electricity grids, optical fibre cable for digital connectivity, and pipeline for the transportation of hydrogen gas. The joint statement on the IMEC states that “the MoU is the result of the initial consultations. It sets forth the political commitments of the participants and does not create rights or obligations under international law. The participant countries intend to meet within the next sixty days to develop and commit to an action plan with relevant timetables.”[ii] The paper aims to examine the aspects and prospects of the IMEC project.

Source: India Today

Key Elements of the Corridor 

The project has three key elements: first, boost economic prosperity through the enhancement of transportation of energy resources through energy grids and expansion of digital communications through undersea cables; second, bridge the infrastructure deficit gap in lower- and middle-income countries; and third, improve regional security through infrastructure cooperation. 

In pursuit of meeting the critical elements of the project, the participant countries intended to work together proactively to connect and develop maritime, rail, and road networks. The countries also announced to establish coordination framework to remove bottlenecks relating to the financial, legal, technical, and regulatory norms for the IMEC.[iii] The Corridor will be supported by the Partnership for Global Infrastructure and Investment (PGII), a US-led initiative to bridge the infrastructure gap in developing countries. 

Relevance of the Corridor for the Participant Countries 

The Corridor is unique in respect of providing an alternative transport route to India to the thriving markets of West Asia and Europe. The time and cost of transporting goods to Europe from India will be reduced by 40 percent and 30 percent, respectively.[iv] The other IMEC founding countries are counting on it to strengthen regional supply chains, increase trade accessibility, enhance economic cooperation, and generate jobs. Besides, it will increase trust, cooperation, and coordination among the participant countries. The Corridor is seen by many analysts as an alternative to China’s Belt and Road Initiative (BRI), which has left many developing countries in deep debt.[v] BRI is designed to serve China’s interests, while IMEC is based on multilateral consultation. On the other hand, the IMEC is complementary to the International North-South Transport Corridor[vi] project concerning its connectivity routes and the involvement of different participant countries.  

Participant Countries’ Interests 

The participant countries’ interests are diverse and rooted in meeting their national interests. While the US is looking for avenues to promote itself as an alternative partner and investor in fast-growing economies in Asia and Africa through this project, the European countries, including Germany, France, and Italy, are aiming to strengthen their geo-economic influence with the Gulf and India. The Gulf countries, particularly Saudi Arabia and the UAE, are more interested in developing their national economies and diversifying the base of their economy from oil to green energy resources. However, Riyadh and Abu Dhabi are also part of China’s BRI; and, how they will balance the BRI and the IMEC remains to be seen. The IMEC project for India is a quest to find an alternative route for economic and infrastructural connectivity with West Asia and Europe. It will enable India to access West Asia and Europe, which was not available earlier due to a lack of over-land access to Iran and the larger West Asia region through an obstructive Pakistan. Economically, the Corridor will help India ship goods to the UAE, Saudi Arabia, Jordan, Israel, and Greece to reach Italy, France, Germany, and vice versa. 

The Road Ahead 

There are several challenges that the IMEC project has to deal with. First, the participant countries have not made financial commitments in the joint statement. Like any other inter-regional connectivity project, there will be challenges related to sharing financial responsibilities, geopolitics, and diplomatic maneuvering. Second, given the sectarian, religious, and political tensions among the West Asia countries, there will be a requirement for a high level of coordination and planning to realise the connectivity project. Third, connecting the rail link with Israel could be a challenge because of the lack of normalization of relations with Saudi Arabia. Fourth, countries like Italy, Saudi Arabia, and the UAE are also part of the BRI, and there may be clashes regarding their commitments to the BRI and the IMEC. Fifth, the Corridor has included Greece in the project, but Turkiye is not part of the project. Turkiye has shown its desire to become part of the project. Sixth, IMEC will pass through the Strait of Hormuz, controlled by Iran, which has repeatedly used the Strait as a pressure tool to meet its geopolitical and economic interests.  

Conclusion 

The IMEC is likely to encourage economic development with better connectivity and economic integration between South and West Asia and Europe. International cooperation in infrastructure projects is fast becoming one of the principal vectors for projecting national power and influence on a regional and global scale. Deeply interlinked connectivity remains a key priority for India, and through IMEC, it seeks to build linkages across the Indian Ocean into the Arabian Sea, traversing a land route in the West Asia region to reach into the Mediterranean Sea. The IMEC ensures the multi-modal connectivity between Asia and Europe, reviving in a way the old spice route.

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*Dr. Arshad, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.

Endnotes

[i] It is an intergovernmental forum comprising 19 sovereign countries, the European Union, and the African Union.

[ii] “Memorandum of Understanding on the Principles of an India-Middle East-Europe Economic Corridor,” Ministry of External Affairs, September 9, 2023, accessed https://shorturl.at/foAS1, September 13, 2023.

[iii] Ibid.

[iv] “A Corridor of Immense Promise,” The Hindustan Business line, September 11, 2023, accessed https://shorturl.at/xGPR8, September 15, 2023.

[v] Sanjeev Kumar, “The Process & Principles of IMEC has clear advantage over China’s BRI,” ICWA, October 3, 2023, accessed https://shorturl.at/cqBCK, October 5, 2023.

[vi] It was announced in 2000. It is a network of ship, rail and road routes linking Russia’s Baltic Sea Coast to India’s Western ports in the Arabian Sea. Participant countries are India, Iran, Azerbaijan, Russia, Central Asia and Europe.