Navigating Headwinds: India Expedites IMEC Amid Current Geopolitical Turmoil – Analysis

Following the General Election results in early-June, Prime Minister Narendra Modi, now in his third term, is focusing on launching the India-Middle East-Europe Economic Corridor (IMEC).

The IMEC is a project aimed at creating a smooth network of ports, railways, roads, sea routes and pipelines. This infrastructure plans to take advantage of current trade routes between India, the Arab Gulf, the Eastern Mediterranean region and Europe. It will also create new infrastructure to connect the Gulf and Mediterranean regions, where many Indians live. The Mediterranean Sea borders Europe, Asia and Africa. It is a crucial route for maritime trade and has many important ports and coastal cities.

The project is the culmination of increasing diplomatic and political alignment between India, the Arab Gulf monarchies, Israel, the United States and the European Union. They all share a common goal of improving sea and land connections to boost economic exchanges between these regions. Economically, the IMEC supports the Arab Gulf monarchies' efforts to enhance connections with India and Europe as they prepare for a future beyond oil.

In September 2023, during the G-20 summit in New Delhi, India, Saudi Arabia, the UAE, France, Germany, Italy, the US and the EU signed a memorandum of understanding (MoU) for the IMEC project. Besides the countries that signed the MoU, Israel and Greece are key points in the IMEC project and have shown great interest in joining in.

Murmu on India’s Connectivity Vision

President Droupadi Murmu, while addressing a joint session of Parliament on Thursday (June 27), declared that the IMEC would be one of biggest game-changers of this century. She noted that a new global order was evolving, with India emerging as a key player and a friend to the world. Murmu emphasised India’s focus on connectivity, highlighting the IMEC as a significant achievement of the Modi government. She also mentioned that India, with its human-centric approach, had become a strong voice for the Global South and was a first responder in times of crisis.

New Delhi Sets a Fast Track Deadline

New Delhi is eager to start the first phase of the project quickly and has set a ‘100-day deadline’ to finish the work. This comes nearly nine months after the project was first introduced in September 2023, when the corridor was launched at the G20 Summit in New Delhi.

At the G7 summit in Italy from June 13-15, Prime Minister Modi and India’s external affairs minister Subrahmanyam Jaishankar emphasised the importance of the IMEC. The joint communiqué from the participating nations included a commitment to promote “concrete infrastructure initiatives, such as the IMEC”.

Creating New Shipping Route to Europe

The IMEC has two main sections. It starts with sea transport between India, the UAE and Saudi Arabia. And, from that point, it connects to Jordan by rail, continuing on to Turkey and Europe. The corridor will offers significant economic and strategic advantages, allowing Indian ships to bypass the dangerous Red Sea-Suez Canal-Europe route. Currently, 37% of India’s trade with Europe goes through the Suez. However, the number of ships using this route has hit a record low due to Houthi attacks on vessels in the Red Sea.

Ashok Swain, a professor and head of the Department of Peace and Conflict Research at Uppsala University in Sweden, explained to Al-Monitor that the IMEC project planned to create a new shipping route to Europe. Despite the ongoing tensions in the Middle East, India has shown strong dedication to the IMEC project. It hopes the other countries involved will be equally committed.

This is important for Modi’s government, especially given the political uncertainty after the latest election results in India. Recently, just before the elections, Modi visited the UAE and signed an agreement with Abu Dhabi to start the IMEC project quickly.

Mohammad Soliman, who leads the Strategic Technologies and Cyber Security Program at the Middle East Institute, told Al-Monitor that the corridor could improve geopolitical connections between Gulf Cooperation Council (GCC) countries, India and Europe. This project will offer the GCC countries a way to balance their relationships with such major global powers as China and Russia.

Soliman also said the IMEC would give the GCC countries a chance to diversify their economies. This fits well with their long-term plans, such as Saudi Arabia’s ‘Vision 2030’. He mentioned that the corridor could boost the GCC’s non-oil trade with India and Europe. It will help export goods and services and attract foreign investments in such areas as logistics, manufacturing and technology.

Overall, while such projects as China’s ‘Belt and Road Initiative’ became popular in countries near India, New Delhi chose not to participate. The IMEC corridor seems to be India’s perfect answer to connecting to Europe and the West. India needs to make the IMEC project work now because some of its other geopolitical efforts have not quite met expectations.

Muddassir Quamar, an associate professor at Jawaharlal Nehru University’s Centre for West Asian Studies, told The Print that, even though the Chabahar port in Iran was operational, India still had not gained access to the Mediterranean, adding that the North-South Transport Corridor had not been running smoothly.

And the Obstacles that India Faces

Because of the ongoing war in Gaza, there are concerns that the IMEC project may face permanent delays due to political problems, or be slowed down by financial and logistical challenges.

According to Soliman, the IMEC’s success depends a lot on a possible Saudi-Israeli normalization agreement. However, this agreement is very uncertain because of the current crisis in Gaza. Saudi Arabia is waiting to see how things develop and its decision will be crucial to the IMEC project.

Meanwhile, Swain noted that, although the Indian government presented the economy as strong, it faced real challenges in quickly securing the funds needed for the IMEC. These difficulties show how complex it is to advance the project. In practice, it might be hard to attract foreign investment.

Shahin Gelareh, an associate professor in Operations Research and Logistics at Artois University in France, told Al-Monitor that the Gaza war could harm the diplomatic efforts and cooperation needed for the IMEC to succeed. The corridor’s route and its dependence on stable regional relationships are now at risk.

Gelareh noted that this situation discouraged investment and cooperation among the other countries involved. This urgency might explain why India is pushing to start the project quickly, as there seems to be a lack of strong economic justification otherwise. Not taking any chances and acting quickly, New Delhi has shown its seriousness. Even if there might be some delays, part of the first phase of the IMEC is expected to be ready in a few months.

Joint Working Group Details Project

To achieve this, a joint working group with officials from the ministries of external affairs, shipping and commerce has been formed to work out the details.

To synchronize voyage, vessel clearance and customs, three ports on India’s west coast will connect to the IMEC for shipping to the UAE’s Jebel Ali and Fujairah ports. These are the Nhava Sheva port in Navi Mumbai and the Kandla and Mundra ports in Gujarat’s Kutch.

To save time, a virtual platform—an online system or digital interface that facilitates and streamlines such processes as Customs clearance and documentation for the ports involved in the IMEC—is being set up. A single Customs clearance document is also being prepared, which will be accepted at all the ports involved.

A senior Indian government official told The Print that it would be like a ‘free-trade zone’, making it easier to do business. Multiple steps are being planned in phases to synchronize port operations between India and the UAE. Currently, processing documents at Indian ports and then at Emirati ports is quite a hassle. India is simultaneously working on raising the capacity of its western ports to handle export-import cargo when the IMEC becomes operational.

Overall, the most crucial part of the IMEC is getting the train link between Saudi Arabia and Jordan up and running. The Indian government has hired RITES, a consultancy firm, to quickly study and identify the missing rail links between Saudi Arabia and Jordan. They will also assess the investment needed to start the second phase after the first is completed.