Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
About IMEC
- The IMEC is a landmark connectivity project launched during the G20 Summit in 2023.
- Designed to enhance trade and transport links between India, the Arabian Peninsula, and Europe, IMEC seeks to reduce logistical costs, provide new trade routes, and integrate energy and digital systems.
- Connectivity Infrastructure:
- IMEC combines maritime and rail networks to create a seamless multimodal system.
- It connects Indian ports to the UAE, then extends via a high-speed rail network across Saudi Arabia, Jordan, and Israel to the Haifa Port, from where goods are transported to Europe.
- The project also includes energy and digital infrastructure, with plans for an electricity grid, hydrogen pipeline, and undersea digital connectivity.
Background
- IMEC builds on the Abraham Accords (2020), which normalised relations between Israel and several Arab nations, creating a conducive atmosphere for regional cooperation.
- Relations between India, the UAE, and Saudi Arabia have strengthened, laying the groundwork for the corridor.
- The I2U2 grouping (India, Israel, UAE, US) has further facilitated regional cooperation on trade, technology, and infrastructure.
Geopolitical Complexities
- The geopolitical situation shifted dramatically in October 2023 due to the Hamas attacks on Israel and the ensuing Gaza conflict, straining relations between Israel and several Arab states.
- Maritime disruptions in the Red Sea, due to attacks from Houthi groups, have further complicated trade routes.
- Emerging global routes, such as the Arctic shipping lanes—exploited by Russia, China, and the US—present competition to IMEC, especially for Mediterranean countries like Italy and France, who are signatories of IMEC.
Strategic and Economic Importance for India
- Diversification of Trade Routes: IMEC provides India with an alternative route to Europe, reducing dependency on critical chokepoints like the Suez Canal and offering an alternative to China’s Belt and Road Initiative (BRI).
- Bilateral Trade with EU: The EU is India’s largest trading partner, with bilateral trade crossing $136 billion in 2024. IMEC enhances India’s export competitiveness by improving connectivity to the European market.
- Energy and Strategic Gains: The corridor is vital for India’s energy security, facilitating access to key Middle Eastern nations.
- It also complements India’s ‘Act West’ policy, enhancing engagement with the Middle East region.
Infrastructure and Technological Vision
- Clean Hydrogen Pipeline: IMEC plans to create a clean hydrogen pipeline between India and Europe via the Middle East, supporting global energy transition goals.
- Electricity Grid: The corridor will include an electricity grid for cross-border power trade, with a focus on renewable energy.
- Digital Connectivity: The initiative also features undersea digital cables, enhancing digital trade and data infrastructure, in line with India’s digital transformation goals.
Way Forward
- Long-term Strategic Vision: Despite political and security challenges, IMEC must be viewed as a long-term strategic project, not just a commercial venture.
- Expansion Potential: The project could integrate additional ports in Saudi Arabia and Egypt, strengthening its resilience to regional disruptions.
- Actionable Steps:
- Establish a permanent joint coordination mechanism for implementation continuity.
- Public-private partnerships and multilateral financing should be mobilized for infrastructure development.
- Consensus on security guarantees for trade routes is essential.
- IMEC should be synchronised with global frameworks like the EU’s Global Gateway and the US-led Partnership for Global Infrastructure and Investment (PGII) to ensure alignment and funding support.
Q- How can the India-Middle East-Europe Economic Corridor (IMEC) provide an alternative to China’s Belt and Road Initiative (BRI)? Discuss its potential impact on global trade networks. (10 marks/150 words)