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).
The IMEC visualises the upgradation of maritime connectivity between India and the Arabian Peninsula, as well as high-speed trains running from the ports in the UAE to the Haifa port in Israel through Saudi Arabia and Jordan. The goods transported on these networks would be shipped to and from European countries. Additionally, the IMEC seeks to build a clean hydrogen pipeline, an electricity cable, a high-speed undersea digital cable and consolidate existing infrastructure such as ports.
Historical background
In 2023, the geopolitical context was favourable for the operationalisation of the IMEC. The Abraham Accords had generated considerable optimism that peace would prevail in West Asia, with Israel and Arab countries working to build a stable relationship. Consequently, proposals were made to build railway lines for regional peace, connecting the Israeli port of Haifa with the Jordanian railway network, which would be linked to other ports in the Gulf region. Furthermore, there was significant improvement in India’s relations with Arab countries, particularly with the UAE and Saudi Arabia. India’s relations with the U.S. were also on an upward trajectory. Such convergences facilitated the emergence of the India, Israel, UAE, and U.S. (I2U2) framework. These geopolitical developments created a favourable environment for the launch of the IMEC on the sidelines of the G-20 Summit in Delhi, with various leaders of the EU, France, Germany, Italy, Saudi Arabia etc. endorsing the initiative.
However, within a few weeks of the launch of the IMEC, the security situation in West Asia deteriorated significantly. The October 7 Hamas attacks, followed by Israel’s military actions in the region, contributed to the deterioration in the relationship between Israel and other countries in the region. These developments have raised questions about the feasibility of the IMEC.
Mediterranean concerns
Climate change has now opened new transport routes through the Arctic, with the principal beneficiaries being countries such as the U.S., Russia, China, and other northern European nations. It is now possible to transport more goods through the Arctic, significantly reducing transportation time and associated costs. Consequently, there is an expectation that port cities near the Arctic will emerge as new commercial centres.
Among IMEC’s European signatories, France has both the Mediterranean and Atlantic coastlines. On the other hand, Italy has only the Mediterranean coast. Thus, there is significant concern about the implications of an Arctic trade route on its economy. As a result, Italy and other Mediterranean countries view the IMEC as a vital platform to preserve their influence in maritime trade. Mediterranean countries maintain that to hold a strong position in global trade requires new thinking, new partners, and scaling up of economic engagement with leading economies. India, with its four trillion-plus economy and sustained high growth, is seen as a viable partner to meet future challenges. Currently, it is still uncertain whether the Arctic route confers any unique advantages to India in terms of reduced transportation costs. Therefore, for India, accessing European markets through the Mediterranean route will continue to be important.
Given higher per capita income, technological advancements, and educational progress, Europe will continue to retain its trade significance for India. With trade over $136 billion, the EU is the largest trade partner of India. India and European countries need to scale up connectivity corridors and logistics networks to build resilient supply chains between the two.
The importance of the IMEC
The recent geopolitical developments have demonstrated that the security of sea lanes is unpredictable. The Houthi disruption in the Red Sea trade has prompted considerable trade to go around the Cape of Good Hope in South Africa, increasing the time and costs of transportation of goods. It is also still too early to determine if the recent Gaza peace plan will hold in the long run. Therefore, it is essential to find new routes to amplify economic relations between India, West Asia, and Europe.
Since the IMEC is a multi-member initiative, it gives considerable space for innovative approaches to adapt to changing geopolitical dynamics, which India and Arab countries should leverage. In addition to the proposed routes in IMEC, there is a need to explore the possibility of engaging other commercial centres and ports in Saudi Arabia and Egypt. Robust economic interactions between India and the Arab countries will also nullify Pakistan’s attempt to build an alliance-like relationship in the region.
While focusing on the security challenges of IMEC, it is critical not to lose sight of economic opportunities that can be derived from India-Europe interactions. India and Europe should act as bookends by pooling their resources to promote prosperity in the IMEC region.
Sanjay Pulipaka is the Chairperson of Politeia Research Foundation.
Published – October 16, 2025 08:30 am IST
