What is India-Middle East-Europe Economic Corridor (IMEC)?

The India-Middle East-Europe Economic Corridor (IMEC) is a planned economic corridor that aims to bolster economic development by fostering connectivity and economic integration between Asia, the Persian Gulf and Europe. The corridor is proposed from India to Europe through the United Arab Emirates, Saudi Arabia, Jordan, Israel and Greece.

IMEC is under the Partnership for Global Infrastructure and Investment, which is a collaborative effort by the Group of Seven (the world’s seven richest economies) to fund infrastructure projects in developing nations.

A memorandum of understanding on the IMEC was signed by India, the US, Saudi Arabia, the UAE, the European Union, Italy, France and Germany.

What are the two corridors or legs of India-Middle East-Europe Economic Corridor (IMEC)?

Eastern leg

The Corridor would have an eastern leg that would take container traffic from India to UAE on the well-established shipping routes from India’s west coast, after which the land route of the Corridor would come into the picture.

The goods would move by rail from UAE to Israel’s Haifa port on the Mediterranean coast where Adani Ports has acquired a container terminal for USD 1.2 billion.

The freight train from UAE would likely proceed to Al Ghweifat on the Saudi border, a 605 km stretch where an Etihad Rail track is already operational. A 250 km section from the Saudi-UAE border to Haradh is under construction, while the longest 1392 km long railway line from Haradh to Al Haditha on the Saudi-Jordan border is already in place.

That only leaves a 300 km stretch from Al Haditha to Haifa in Israel via Beit She’an on the Jordan-Israel border. A good chunk of the physical rail infrastructure is, therefore, already in place.

Western or Northern leg

The western leg of the corridor would put the containers back on ships in Haifa and take them to Piraeus in Greece for onward transmission by European rail networks to their final destinations. The attraction of the two-way transport link lies in reducing dependence on the Suez Canal and creating a route that could be 40% faster because high-speed freight trains would travel at 120 kmph – three to four times faster than the more leisurely pace of the ships.

What is the role of the Abraham Accords of 2020 and I2U2 grouping in the genesis of India-Middle East-Europe Economic Corridor (IMEC)?

The genesis of India-Middle East-Europe Economic Corridor (IMEC) appears to lie in the Abraham Accords of 2020 and the subsequent emergence of the I2U2 grouping which brought India into the equation with Israel, the US and UAE in October 2021 and indicated that the focus areas would include strategic transport links.

This was reiterated during the virtual I2U2 summit in July 2021 and fleshed out when the NSAs of India, US, UAE and Saudi Arabia met in Riyadh in May 2023. Israel was an early and enthusiastic advocate of the project.

What is the significance of India-Middle East-Europe Economic Corridor (IMEC)?

The corridor, which would include India, Saudi Arabia, the United Arab Emirates, Jordan, Israel and the European Union, would help boost trade, deliver energy resources and improve digital connectivity.

The proposed project will cut the trade time between India and Europe by 40 percent.

The deal will benefit low- and middle-income countries in the region, and enable a critical role for the Middle East in global commerce.

What is the main difference between India-Middle East-Europe Economic Corridor (IMEC) and Belt and Road Initiative?

There is a key difference between India-Middle East-Europe Economic Corridor (IMEC) and Belt and Road Initiative. As an Economic Corridor, the India-Middle East-Europe Economic Corridor (IMEC) is not limiting its scope to trade in goods alone. It takes into account the growing imperative of cyber security and proposes a secure, high-speed data pipeline that could potentially facilitate export of India’s IT services to Europe and West Asia.

Moreover, IMEC is planned to benefit all member countries unlike China’s BRI.

The IMEC opens up new transport routes and avenues for cooperation between member countries on technology, design, finance and regulatory standards. And, it will not push countries into debt trap.

What is the significance of inclusion of electricity grids in the framework of the IMEC from an Indian perspective?

The inclusion of electricity grids in the framework of the Corridor is particularly significant from an Indian perspective.

As part of its leadership of the International Solar Alliance, India has already promoted the One Sun, One World, One Grid initiative, an ambitious attempt to connect the world’s key regional grids into a common green grid that can transfer renewable energy from one region to another. It would leverage different time zones to maximize the use of solar energy and reduce the need for expensive energy storage systems.

What could be the significance of incorporation of clean hydrogen pipelines into the Corridor?

Equally forward-looking is the plan to incorporate clean hydrogen pipelines into the Corridor. There is a strong belief that clean hydrogen could be the most effective long-term alternative to fossil fuels and in India, the government has already allocated USD 2.5 billion to promote the country’s emergence as a green hydrogen hub.

Several of the India’s biggest business groups including Reliance, Adani, L&T and ReNew have announced multi-billion dollar investments to develop their own green hydrogen projects, as have Corridor members like UAE and Saudi Arabia.

Prices of electrolysers are expected to come down significantly as production ramps up and green hydrogen using renewable energy may well follow the same price curve that we have seen for solar and wind energy.

What are the challenges in front of India-Middle East-Europe Economic Corridor (IMEC)?

The political will and resolve of participating countries will be tested as they start coordinating to meet a formidable array of challenges.

A starting point would be the need to address the issues of technology, finance and commercial viability for the physical infrastructure in terms of railway links, the clean hydrogen pipelines and the electricity and data cables.

At the same time, problems of soft infrastructure related to harmonization of standards for ports, railways and customs would also have to be addressed.

Each of the four verticals that are integral to the Corridor will pose a distinct and separate set of hurdles.

Why India-Middle East-Europe Economic Corridor (IMEC) is seen by some as an alternative to China’s BRI?

In 2013, China rolled out the Belt and Road Initiative (BRI) as a very ambitious infrastructure plan before the world and invited more than 100 countries to participate and act on this scheme. The BRI was introduced as an initiative to improve connectivity between different countries of the world through road, rail and sea routes with an aim to promote international trade and cooperation.

But as the project progressed, its ill effects began to surface. Many of the developing countries that participated in it faced a paucity of resources and saw their debt soar due to huge expenditure on this project.

Today, many countries including Pakistan, Sri Lanka and Bangladesh in Asia and Angola, Ethiopia, Zambia, Congo and Sudan in Africa are neck deep into debt due to this project.

However, the Chinese government has not made any attempt to resolve the payment difficulties through any defined process. In such a situation, due to a lack of rules and debt resolution mechanisms, a large number of countries included in the BRI are trapped in the vortex of debt.

There is hardly any doubt that BRI is nothing but ‘debt trap diplomacy’. The real intention, which is turning out to be very obvious, was to occupy the strategically located ports and other assets of the countries with debt vulnerabilities. Many countries have now started viewing the BRI with suspicion.

Comparing the IMEEC with the BRI, we see that the BRI is a China-centric project, where the responsibility of investment was China’s but that investment turned into debt of those countries that were responsible for repayment.

In comparison, the IMEC is a project based on cooperation. The project opens up new transport routes and avenues for cooperation between member countries on technology, design, finance and regulatory standards. It also seeks electricity and digital connectivity between these countries. There is also a plan for a pipeline for the flow of clean hydrogen.

Many member countries would prefer IMEC over the BRI for several reasons:

Firstly, the IMEC has been planned keeping in mind the interests of the member countries while the BRI has been planned to benefit China.

Secondly, the BRI was prepared by China, while IMEC was designed after discussions among the member countries.

Thirdly, the BRI project is giving contracts only to Chinese companies and employment to Chinese people while the IMEC scheme will provide employment at the local level.

Fourthly, the BRI project is threatening the sovereignty of member nations, the IMEC project respects it.

Fifthly, China provides loans to member countries under the Belt and Road Initiative at high interest rates and unfair terms while the IMEC project proposes to implement best international debt practices.

CONCLUSION

The challenges are real, and so are the opportunities that could emerge from a project that is based on trendlines and projections that take us into 2030 and beyond. It takes advantage of a geopolitical and geoeconomics paradigm that simply didn’t exist a decade ago.

Without the Abraham Accords, UAE and Israel (and Saudi Arabia) wouldn’t have been on the same page. And without the rapidly falling prices of renewable energy, the idea of green hydrogen and interconnected electricity grids would have been impossible.

If technology, capital and political resolve can combine to make this Green Corridor a reality, the aspiration for a cleaner, more habitable planet may not remain a pie in the sky.