The future of the IMEC

For Preliminary Examination:  Current events of national and international Significance like India–Middle East–Europe Economic Corridor (IMEC)

For Mains Examination: GS II - International relations and Organisations

Context:

The recent trade friction with the U.S. has prompted India to intensify its efforts to further diversify its economic interactions with various countries worldwide. While India has signed an agreement with the U.K., it is also negotiating a similar agreement with the EU. In addition to such compacts, India should also proactively develop frameworks such as the India–Middle East–Europe Economic Corridor (IMEC).

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India–Middle East–Europe Economic Corridor (IMEC)

India, Israel, UAE, and U.S. (I2U2)

Key takeaways:

• The recent trade tensions between India and the United States have pushed New Delhi to expand and diversify its global economic engagements. Alongside the ongoing trade pact with the United Kingdom, India is in advanced negotiations with the European Union for a similar agreement.
• Beyond bilateral trade compacts, India must also focus on developing large-scale connectivity projects such as the India–Middle East–Europe Economic Corridor (IMEC).
• The IMEC envisions enhanced maritime connectivity between India and the Arabian Peninsula, along with the establishment of a high-speed rail network linking UAE ports to Israel’s Haifa port through Saudi Arabia and Jordan.
• From there, goods can be seamlessly transported to and from European markets. The corridor also aims to integrate modern infrastructure components — including a clean hydrogen pipeline, electricity cable, and an undersea digital data link — while strengthening existing port systems.

Historical Background

• In 2023, geopolitical conditions were conducive to realizing the IMEC project. The Abraham Accords had raised hopes for lasting peace in West Asia, as Israel and Arab states worked toward stability and cooperation. Proposals emerged to connect Haifa port with Jordan’s railway system and extend it toward Gulf ports to foster regional connectivity.
• At the same time, India’s partnerships with key Arab states — notably the UAE and Saudi Arabia — grew stronger, while its relations with the United States also improved.
• These converging interests paved the way for the I2U2 grouping (India, Israel, UAE, and the U.S.) and set the stage for the IMEC’s formal announcement during the G20 Summit in New Delhi, with endorsement from several EU nations, including France, Germany, and Italy.
• However, the security scenario in West Asia deteriorated soon after. The October 7 Hamas attacks and Israel’s subsequent military response severely strained Israel’s relations with neighbouring countries, casting doubt on the near-term viability of the IMEC project.

Mediterranean Concerns

• Meanwhile, climate change has opened new maritime routes through the Arctic, offering shorter and cheaper transport options that primarily benefit the U.S., Russia, China, and Northern European countries. This development could shift trade patterns toward Arctic port cities.
• Among IMEC’s European partners, France, which enjoys access to both the Atlantic and Mediterranean, is relatively better placed, whereas Italy — with only Mediterranean access — fears losing out economically.
• For this reason, Italy and other Mediterranean nations view IMEC as crucial for maintaining their relevance in global maritime trade. They argue that sustaining competitiveness demands innovative thinking, new alliances, and deeper engagement with emerging economies like India.
• With its robust and fast-growing $4 trillion economy, India is viewed as an attractive and reliable partner for Med