The recent outbreak of war between Hamas and Israel has cast a shadow over the ambitious India-Europe-Middle East Corridor (IMEC) project, which was announced during the G20 meeting in New Delhi in September 2023. The IMEC is a proposed economic corridor that would connect India to Europe via the Middle East through a network of shipping lanes, rail links, and roads.
The project is seen by many as a counter to China’s Belt and Road Initiative (BRI), and it is of key strategic importance to India. The IMEC would provide India with a direct route to European markets, and it would also help to boost trade and investment between India and the Middle East.
However, the Hamas-Israel war could derail the IMEC project. The war has led to increased tensions and instability in the Middle East, which is likely to discourage investment in the region. Additionally, the war could disrupt shipping and trade routes in the region, making it more difficult and costly to transport goods between India and Europe.
Impact of the war on the IMEC
The Hamas-Israel war could impact the IMEC project in a number of ways:
• Increased costs: The war is likely to lead to increased insurance premiums and shipping costs, making it more expensive to transport goods along the IMEC corridor.
• Delays: The war could also lead to delays in the construction of the IMEC infrastructure, such as roads, rail lines, and ports.
• Political instability: The war could also contribute to political instability in the Middle East, which could make it more difficult to implement the IMEC project.
India’s concerns
India has a strong interest in the IMEC project, as it would provide India with a direct route to European markets and boost trade and investment between India and the Middle East.
Indian experts are concerned about the impact of the war on the safety of Indian citizens living and working in the Middle East. The war has led to an increase in violence in the region, and there have been reports of Indian citizens being caught up in the crossfire as seen in the case of Bollywood actor Nusrat Bharucha.
What India can do
According to people in know-how of the situation, the Indian government can take a number of steps to mitigate the impact of the Hamas-Israel war on the IMEC project. India can work with its international partners, such as the United States, friends in the Arab world and the European Union, to promote peace and stability in the Middle East. This would help to create a more conducive environment for the implementation of the IMEC project.
India can also invest in the development of infrastructure that would support the IMEC project, such as roads, rail lines, and ports. This would help to reduce the cost and time of transporting goods along the IMEC corridor.
In the end…
The Hamas-Israel war is a major setback for the IMEC project. The war has led to increased tensions and instability in the Middle East, which is likely to discourage investment in the region and disrupt shipping and trade routes.
Experts are concerned about the impact of the war on the IMEC project and the safety of Indian citizens in the Middle East. The Indian government can take a number of steps to mitigate the impact of the war, such as working with international partners to promote peace and stability in the Middle East, investing in infrastructure, and providing support to Indian businesses operating in the region.
Additional thoughts …
In addition to the above, the Indian government may also want to consider the following:
• Diversify its trade routes: India should not rely too heavily on the IMEC project as its only route to Europe. The Indian government should explore other trade routes, such as through Central Asia and Russia.
• Develop its domestic economy: India should focus on developing its domestic economy, so that it is less reliant on exports and imports. This would make India less vulnerable to shocks from the global economy, such as the Hamas-Israel war.
• Promote peace and dialogue in the Middle East: India should use its influence to promote peace and dialogue between Israel and the Palestinians. This would help to create a more stable environment for trade and investment in the Middle East.
The Hamas-Israel war is a major challenge for the IMEC project, but it is not insurmountable. The Indian government can take a number of steps to mitigate the impact of the war and ensure that the IMEC project remains on track