West Asia and IMEC

At a conference hosted by the Chintan Research Foundation, Secretary (Economic Relations) in the Ministry of External Affairs, Dammu Ravi, highlighted that the ongoing crisis in West Asia could hinder progress on the India-Middle East-Europe Economic Corridor (IMEC), a strategic connectivity initiative announced during the G20 Summit 2023 hosted by India.

G20’s Strategic Connectivity Push and Its Current Geopolitical Vulnerabilities

• IMEC stands for India-Middle East-Europe Economic Corridor.
• Announced at the G20 Leaders’ Summit 2023, hosted by India.
• It is a multi-modal connectivity project involving sea, rail, and road links to:
  • Connect India to the Arabian Gulf (via ports like Mumbai and UAE).
  • Link Gulf countries to Europe (through Saudi Arabia, Jordan, Israel, and Greece).
  • Intended to enhance trade, energy transport, digital connectivity, and supply chain resilience.

• Regional instability in West Asia, especially Israel-Gaza conflict, Iran's regional posture, and Red Sea naval disruptions, may:
  • Delay execution and financing.
  • Raise concerns about infrastructure security.
  • Deter private sector investment and global logistical commitments.

• Lack of a Coordinating Secretariat:
  • MEA suggests that a dedicated IMEC Secretariat is necessary for:
    • Inter-governmental coordination.
    • Monitoring progress and compliance.
  • Without it, IMEC risks becoming an underutilized diplomatic concept.
• Funding Mechanism Unclear:
  • Emphasis on private sector investment.
  • No clarity on public infrastructure funding, incentives, or multilateral bank support.
• Harmonisation Issues:
  • Divergent standards across participant countries:
    • Technical regulations, phytosanitary measures.
    • Customs rules, transportation codes, taxation.
  • These reduce efficiency gains from reduced transit times.

• IMEC vs China’s Belt and Road Initiative (BRI):
  • IMEC is seen as a democratic alternative to BRI.
  • Unlike BRI, IMEC is led by pluralistic partners including India, UAE, Saudi Arabia, EU, and USA.
  • Challenge lies in matching BRI’s financial muscle and operational momentum.

• Enhances India’s connectivity with Europe bypassing Pakistan.
• Promotes energy corridor diversification.
• Strengthens India's role as a logistical hub in the Indo-West Asian region.
• Fulfills India’s Act West policy parallel to its Act East approach.

Way Forward:

• Establish a Permanent IMEC Secretariat to coordinate policy, logistics, and dispute resolution.
• Create a joint infrastructure fund with contributions from member countries and MDBs (like AIIB, EIB, ADB).
• Streamline customs and regulatory regimes across nations through bilateral and regional trade agreements.
• Engage in Track 1.5 dialogues with regional stakeholders to resolve geopolitical uncertainties.
• Prioritise pilot-level implementation of certain segments (India-UAE, UAE-Saudi rail links) to build trust and momentum.