The India-Middle East-Europe Economic Corridor (IMEC) was announced on September 9, 2023 during the G-20 Summit in New Delhi, India. As a result of the Memorandum of Understanding signed between the United Arab Emirates (UAE), Saudi Arabia, India, the United States of America (USA), France, Germany, Italy and the European Union (EU), the participating states committed to work together to develop and harmonize the trade infrastructure between them. The corridor also aims to secure supply chains between the three continents, develop energy resources and strengthen digital connectivity.[1]
In his speech on September 24, 2023, Indian Prime Minister Narendra Modi expressed his thoughts on this corridor as follows:[2]
“This project will give a sustainable direction to interconnection and development worldwide. It will promote sustainable development for the whole world.”
EU Commission President Ursula von der Leyen expressed her thoughts on this corridor in her speech on September 13, 2023:[3]
“This corridor will be the only direct link between India, the Arabian Gulf and Europe to date. It will also include a rail link that will make trade between India and Europe 40% faster.”
US President Joe Biden called this project, “a game-changing investment.”[4] A new 4.800 kilometer corridor, IMEC consists of two separate routes: the eastern corridor connecting India to the Persian Gulf and the northern corridor connecting the Persian Gulf to Europe. IMEC is a multimodal transport corridor that envisages the use of roads, railways and ports.
Considered by experts as a rival to China’s Belt and Road Initiative, IMEC has been fraught with financial and logistical problems from the outset. For example, the route requires significant investment in infrastructure improvements and other logistics infrastructure needs, as well as the construction of more than 2.000 kilometers of railway.[5] In addition to the challenges of multimodal transportation due to the lack of existing infrastructure, the fact that goods shipments will be subject to each country’s own national customs control could create another problem. Although the success of the project depends on the harmonization of trade policies among the countries involved, no study has yet been carried out on this issue.
Although stipulated in the MoU, the parties did not meet within 60 days to define a concrete action plan. There has also been insufficient information on the financing of the project. According to estimates, infrastructure works are expected to cost 8 billion dollars.[6] Since the signatories to the MoU have not made any binding commitments on financing, it remains unclear who will pay the billions of dollars.[7] Therefore, it can be said that ensuring the viability and sustainability of trade between the three continents, as well as providing clarity on the cost and financing of the project, will be an extremely challenging process for the countries involved.
However, infrastructure deficiencies or financial difficulties are not the only challenges in implementing this ambitious project. A transport corridor, generally defined as a combination of roads connecting the economic activity centers of one or more countries, contributes to economic development and regional integration among the countries along the route. Ensuring stability and security along the route and the cooperation of the countries involved are of great importance for the effective and efficient use of transport corridors.
The attack by Hamas on Israeli towns near the Gaza Strip on October 7, 2023 not only escalated the conflicts in the region since 1948, but also changed the dynamics of the entire Middle East. The security and stability concerns that emerged and still persist in the region with this attack have created even greater problems for the implementation of IMEC. Israel’s harsh stance towards Gaza following the Hamas attack also negatively affected the normalization process between Saudi Arabia and Israel. At this point, it is worth noting that normalization between Israel and Saudi Arabia was crucial for the successful implementation of IMEC.
Based on the assumption that trade relations will ensure peace and stability in the region, it can be said that the project aims to contribute to a peaceful and stable Middle East. However, the stalled normalization process between the two countries prevented the signing of a regional security agreement and dampened hopes for the project. In the midst of this regional turmoil, IMEC remained only a wishful thinking for the countries party to the project.
Recently, there have been a number of important developments regarding the future of the project. For instance, on February 12, 2024, French President Emmanuel Macron appointed Gérard Mestrallet, the former head of the French energy company Engie, as the “IMEC Special Envoy” and expressed his desire for his country to be a key actor in the project and for French companies to be involved in its early stages.[8]
India is the country making the most effort to ensure the sustainability of this project. Speaking at the G-20 Finance Ministers’ Meeting in Morocco on October 13, 2023, Indian Finance Minister Nirmala Sitharaman said, “This is a long-term initiative. While the short-term disruptions in the Middle East are worrying, we will continue to engage with the parties.”[9] Minister Sitharaman also stated in the 2024 budget deliberations that “IMEC is a strategic and economic game changer for India and other countries.”[10] On the other hand, a very important development took place during the visit of Indian Prime Minister Narendra Modi to the UAE on February 13-14, 2024. The two countries signed an agreement to continue work on IMEC.[11]
These developments can be considered as proof that the project has not been forgotten. In the context of these developments, it can be said that despite the ongoing conflicts and regional instability in the region, there has been no change in the economic and political motivations of the countries party to IMEC.
[1] “Memorandum of Understanding on the Principles of an India – Middle East – Europe Economic Corridor”, The White House, 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/, (Date of Access: 01.02.2024).
[2] “Can new India-Europe-Middle East corridor counter China?”, The Telegraph, https://www.telegraphindia.com/world/can-india-middle-east-europe-economic-corridor-act-as-a-foil-to-chinas-belt-and-road-initiative-dws/cid/1966075, (Date of Access: 01.02.2024).
[3] “2023 State of the Union Address by President von der Leyen”, European Commission, https://ec.europa.eu/commission/presscorner/detail/en/speech_23_4426, (Date of Access: 30.01.2024).
[4] “Connecting India with Europe: World’s most ambitious trade route stalls in Mideast turmoil”, The Economic Times, https://economictimes.indiatimes.com/small-biz/trade/exports/insights/connecting-india-with-europe-worlds-most-ambitious-trade-routestalls-in-mideast-turmoil/articleshow/107099848.cms, (Date of Access: 30.01.2024).
[5] “The uncertain future of the India-Middle East-Europe Corridor”, Politico, https://www.politico.eu/article/the-uncertain-future-of-the-india-middle-east-europe-corridor/, (Date of Access: 30.01.2024).
[6] “From India to Europe: What opportunities and challenges will the new corridor bring?”, Euronews, https://www.euronews.com/business/2023/12/15/from-india-to-europe-economic-corridor-to-offer-new-trade-opportunities, (Date of Access: 14.02.2024).
[7] “Memorandum of Understanding on the Principles of an India – Middle East – Europe Economic Corridor”, White House, 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/, (Date of Access: 01.02.2024).
[8] “L’ex-patron d’Engie nommé émissaire de la France dans un projet de couloir logistique entre l’Europe et l’Asie”, Le Parisien, https://www.leparisien.fr/economie/lex-patron-dengie-gerard-mestrallet-nomme-emissaire-de-la-france-dans-un-projet-de-couloir-logistique-entre-leurope-et-lasie-12-02-2024-O43VMXIAWJANFF6ZEXMHRCJSPA.php, (Date of Access: 14.02.2024).
[9] “‘G20 countries will start share Information under Crypto Asset Reporting Framework by 2027’: Finance Minister”, The New Indian Express, https://www.newindianexpress.com/business/2023/Oct/14/g20-countries-will-start-share-informationunder-crypto-asset-reporting-framework-by-2027finance-minister-2623811.html, (Date of Access: 14.02.2024).
[10] “Interim Budget 2024: ‘Trade corridor will be strategic game-changer’”, The Indian Express, https://indianexpress.com/article/business/budget/interim-budget-2024-trade-corridor-will-be-strategic-game-changer-9139852/, (Date of Access: 15.02.2024).
[11] “India, UAE ink pact to quickly operationalise crucial India-Middle East-Europe Economic Corridor”, The New Indian Express, https://www.newindianexpress.com/nation/2024/Feb/14/india-uae-ink-pact-to-quickly-operationalise-crucial-india-middle-east-europe-economic-corridor, (Date of Access: 15.02.2024).
