The India-Middle East-Europe Economic Corridor (IMEC) is a multilateral initiative to revive ancient trade routes and forge new economic ties between regions that have historically been interconnected through commerce, culture and collaborative diplomacy. On the side-lines of the G20 leaders’ summit held in New Delhi, leaders of India, the European Union, France, Germany, Italy, Saudi Arabia, United Arab Emirates (UAE) and the United States of America (USA) signed an MoU on 9 September 2023 committing to work together to develop a new IMEC[1] and it turned out to be the most important outcome of the summit hosted by India. The IMEC will comprise two separate corridors, the east corridor connecting India to the Gulf and the northern corridor connecting the Gulf to Europe. Examining its historical context, current implications for security and potential benefits for participating allies offers a comprehensive understanding of its significance in the changing dynamics of the global economic landscape. IMEC is a major geopolitical and geo-economic shift in the connectivity projects between Asia and Europe.
The President of India, Droupadi Murmu in her address to a joint sitting of the Indian Parliament on June 27, 2024, highlighted India’s role as a primary responder in global crises and its emergence as a leading voice for the Global South. She underscored the foreign policy priorities of Prime Minister Narendra Modi’s government, particularly emphasising the enhancement of connectivity. Murmu pointed out that India is prioritising connectivity with East Asia, the Middle East and Europe, with the IMEC as a key initiative. She described this corridor as potentially transformative, suggesting it “…will prove to be one of the biggest game-changers of the 21st century.”[2]
Historical Foundations: Ancient Trade Routes and Cultural Exchanges
The history of India’s interactions with the Middle East and Europe dates back to antiquity, when trade routes such as the Silk Route[3] facilitated the exchange of goods, ideas and cultures across vast distances. India, with its rich resources and strategic geographic location, has always been a crucial node in these networks. The spice trade, in particular, established maritime routes[4] connecting the Indian subcontinent with the Middle East and Europe, shaping the economic fortunes of nations and influencing geopolitical dynamics.
During the medieval period, Indian merchants and scholars[5] played a pivotal role in disseminating knowledge and fostering trade relations with the Islamic world and later with Europe. This historical backdrop underscores the deep-rooted economic and cultural ties that form the basis of the IMEC in the current highly globalised context. The corridor aims to build upon this historical legacy by modernising infrastructure, streamlining regulatory frameworks and promoting connectivity to facilitate seamless trade flows.
Implications on Traditional and Non-Traditional Security
In the contemporary geopolitical context, the IMEC holds both traditional and non-traditional security implications for the participating nations. Liberal scholars of international relations such as Robert O. Keohane[6] and Joseph S. Nye, Jr.[7] emphasise how multilateral initiatives promote ideas of collaboration and cooperation through forming alliances. Economic corridors like the IMEC contribute to stability by promoting “complex interdependence”[8] among nations, reducing the likelihood of conflict over scarce resources and providing economic incentives for cooperation.
Enhanced connectivity through infrastructure projects such as ports, roads and railways significantly facilitates trade. The project’s objective is to significantly enhance trade and connectivity efficiency between India and Europe by cutting transit times by 40 percent and reducing transit costs by 30 percent.[9]It also aims to establish a high-speed digital network to bolster connectivity and implement a sustainable hydrogen pipeline infrastructure. According to logistics and infrastructure experts Indian companies that might benefit from the potential developments include Ircon International, Rail Vikas Nigam Ltd (RVNL), Larsen & Toubro (L&T) and Tata Projects.[10]
Non-traditional security challenges, including climate change, energy security, and cyber threats, are also prominent in the context of the IMEC. The corridor’s emphasis on sustainable development practices and renewable energy initiatives underscores its commitment to addressing environmental challenges. Collaborative efforts in energy security, such as joint ventures in renewable energy projects and technology transfers, enhance energy diversification and resilience against global energy supply disruptions.
The IMEC will bolster India’s commitment to renewable energy. Integration of electricity grids[11] within the corridor will enhance India’s utilisation of solar power, while the implementation of clean hydrogen pipelines will advance India’s emergence as a hub for green hydrogen-based energy. Crucially, these initiatives will fortify India’s supply chain resilience against global disruptions, including pandemics and geopolitical conflicts. India is already committed to expanding its green hydrogen infrastructure. The central government has approved a US$2.1 billion incentive plan[12] aimed at establishing green hydrogen production facilities capable of producing 5 million metric tons by 2030.[13] In parallel, the private sector, including companies like Reliance Industries, Adani Enterprises and JSW Energy, has prioritised green hydrogen, collectively aiming to set up manufacturing capacity totalling 3.5 million metric tons.[14] Likewise, other countries within the IMEC, such as the UAE and Saudi Arabia, are also advancing robust plans for expanding their green hydrogen capabilities.
Implications of Geopolitical Dynamics
In the aftermath of its announcement, the project was overshadowed by the Gaza war and its consequences, thereby casting uncertainty on its future.[15] The repercussions of this conflict have endangered the project’s launch due to its broader impact in the Middle East, posing a significant threat to IMEC’s prospects. To a large extent, the war derailed the USA’s efforts to formalise relations between Saudi Arabia and the USA following the Abraham Accords in September 2020, which established relations between Israel and the UAE. Further, the April 2024 Israel-Iran flare-up[16] has turned out to be a major impediment or barrier in converging the economic interests[17] of the economies involved in IMEC.
In the evolving security landscape, India seeks to enhance its strategy to prevent encirclement by China and establish itself as a leading nation among developing countries. After I2U2 (India, Israel, UAE and USA), India made another major initiative towards strengthening its ties with the Middle East. Meanwhile, the US and the EU aim to counter China’s influence by embracing their ties with India. It is a win-win situation for all the countries involved in IMEC. Similarly, to capitalise on geo-economic gain, the project offers, Saudi Arabia and UAE can become an economic link between the East and West. Nevertheless, by embracing IMEC, the US wants to counter Russian and Chinese influence in the Middle East. All participating nations aim to leverage the project’s geopolitical influence and geo-economic benefits.
Conclusion
In conclusion, the India-Middle East-Europe Economic Corridor stands as a testament to the enduring historical ties and evolving modern partnerships between these regions. Beyond its economic potential, this corridor holds significant geopolitical implications, enhancing regional stability and fostering closer diplomatic relations. As India, the Middle East, the U.S. and Europe deepen their economic interdependence through this corridor, they are poised to wield greater influence in global affairs, shaping the landscape of international trade and development. The corridor not only promises economic prosperity but also serves as a conduit for cultural exchange and mutual understanding. Looking ahead, its successful implementation will likely redefine regional dynamics and contribute to a more interconnected and prosperous global economy.
References:
[1] The White House, “Memorandum of Understanding on the Principles of an India – Middle East – Europe Economic Corridor”, September 9, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/09/09/memorandum-of-understanding-on-the-principles-of-an-india-middle-east-europe-economic-corridor/
[2] NDTV, “What President Murmu Said On India-Middle East-Europe Economic Corridor”, June 27, 2023, https://www.ndtv.com/india-news/what-president-murmu-said-on-india-middle-east-europe-economic-corridor-5982962
[3] Nasir Raza Khan, “India’s Connection with the Silk Route.” India Quarterly, Volume 61, Issue 1, 2005, Pages 79-117, http://www.jstor.org/stable/45073383
[4] Department of Ancient Near Eastern Art, The Metropolitan Museum of Art, “Trade Routes between Europe and Asia during Antiquity”, October 2000, https://www.metmuseum.org/toah/hd/trade/hd_trade.htm
[5] Steven Poole, “How the World Made the West by Josephine Quinn review – rethinking ‘civilisation’”, The Guardian, February 28, 2024, https://www.theguardian.com/books/2024/feb/28/how-the-world-made-the-west-by-josephine-quinn-review-rethinking-civilisation
[6] Robert O. Keohane, “Understanding Multilateral Institutions in Easy and Hard Times”, Annual Review of Political Science, Volume 23, 2020, Pages 1-18, https://www.annualreviews.org/content/journals/10.1146/annurev-polisci-050918-042625
[7] Joseph S. Nye, Jr., “Unilateralism vs. Multilateralism”, Project Syndicate, September 24, 2002, https://www.project-syndicate.org/commentary/unilateralism-vs–multilateralism-2002-09
[8] Robert O. Keohane and Joseph S. Nye Jr, “Power and interdependence”, Survival: Global Politics and Strategy, Volume 15, Issue 4, 1973, Pages 158-165, https://www.tandfonline.com/doi/abs/10.1080/00396337308441409
[9] Osama Rizvi, “From India to Europe: What opportunities and challenges will the new corridor bring?”, EuroNews, December 15, 2023, https://www.euronews.com/business/2023/12/15/from-india-to-europe-economic-corridor-to-offer-new-trade-opportunities
[10]Dhruvaksh Saha and Shine Jacob, “New corridor may drive big gains for rail, infrastructure companies”, Business Standard, September 12, 2023, https://www.business-standard.com/industry/news/india-s-rail-firms-ports-to-reap-the-most-from-g20-economic-corridor-123091100957_1.html
[11] Darshan Ghodawat, “The India-Middle East-Europe Corridor will pave the way for a new global economic order”, Financial Express, May 18, 2024, https://www.financialexpress.com/policy/economy-the-india-middle-east-europe-corridor-will-pave-the-way-for-a-new-global-economic-order-3492747/
[12] Jyoti Gulia, Kapil Gupta, Vibhuti Garg and Charith Konda, “India’s $2.1bn Leap Towards its Green Hydrogen Vision”, Institute for Energy Economics and Financial Analysis (IEEFA), March 2024, https://ieefa.org/sites/default/files/2024-03/India’s%20%242.1bn%20Leap%20Towards%20its%20Green%20Hydrogen%20Vision_Mar2024.pdf
[13] Saurav Anand, “India aims to produce 5 million tonne green hydrogen by 2030, 70% for exports: MNRE secretary”, LiveMint, July 8, 2023, https://www.livemint.com/news/india/india-aims-to-produce-5-million-tonne-green-hydrogen-by-2030-70-for-exports-mnre-secretary-11688754954696.html
[14] Anjal Prakash, Ivy Chaudhuri and Chirag Singla, “Green Horizon: India’s journey to leadership in the Hydrogen Revolution”, Forbes India, January 8, 2024, https://www.forbesindia.com/article/isbinsight/green-horizon-indias-journey-to-leadership-in-the-hydrogen-revolution/90711/1
[15] Arthur Sullivan, “India-Middle East corridor in doubt due to Israel-Hamas war”, DW, February 27, 2024, https://www.dw.com/en/india-middle-east-corridor-in-doubt-due-to-israel-hamas-war/a-68354312
[16] Tamara Qiblawi, “Iran and Israel have averted an all-out war – for now”, CNN, April 19, 2024, https://edition.cnn.com/2024/04/19/middleeast/iran-israel-averted-war-for-now-analysis-mime-intl/index.html
[17] Kaush Arha and Carlos Roa, “IMEC’s Road Ahead”, The National Interest, May 3, 2024, https://nationalinterest.org/feature/imec%E2%80%99s-road-ahead-210890?page=0%2C1
Leave a Reply