The leaders of France, Germany, India, Italy, Saudi Arabia, the United Arab Emirates, the United States, and the European Union unveiled the India-Middle East-Europe Economic Corridor (IMEC) at the G20 summit in New Delhi in September 2023. Two ship-to-rail transit corridors linking India to Europe through the Arabian Gulf sit at the heart of the initiative. These corridors, spanning 4,800km, will cross the UAE, Saudi Arabia, Jordan, and Israel, giving these states easier access to European and Indian markets.

IMEC will include road and maritime transport routes that already exist, aiming to increase connectivity and economic integration between Asia and Europe via energy infrastructure, railways, high-speed cables, and shipping lanes. The countries participating in IMEC make up 40 percent of the world’s population and around 50 percent of the global economy.

“IMEC provides an opportunity for the diversified states to strengthen their connections with India and exert their influence in the Middle East”

Indian Prime Minister Narendra Modi said, “It will be a major medium of economic integration between India, Europe, and West Asia.” IMEC will consist of two separate corridors: the Eastern Corridor will connect India to the Middle East and the Northern Corridor, will connect the Middle East to Europe. The reason why India is trying to engage in this transcontinental corridor and the geopolitical dynamics around IMEC are influenced by the tensions that exist between China and India. As tensions over Sino-India border continue to escalate, New Delhi is attempting to counterbalance the influence of China in South Asia and other regions as well. GCC countries will be able to take advantage of the increased tension between Beijing and New Delhi as China and India’s competition heats up.

“IMEC promises faster cross border transit, improving India’s economic security while bolstering supply chain security and digital connectivity across different industries”

In addition to reducing transit times between India, the Middle East, and Europe, this project would also benefit India strategically and economically by allowing it to avoid trade routes through Pakistan and Afghanistan. The Suez Canal is currently the only trading route used for the transportation of goods to Europe. The commodities go across the Suez Canal from Mumbai Port to Europe in 18 days. IMEC will reduce the transit time to 10 days resulting in a 40 percent reduction in the transit time resulting in India benefiting from a more secure supply chain, and food security.

The development of railway infrastructure would increase the employment opportunities for the manufacturing sector in India and clean energy trade would be facilitated by the hydrogen pine line, which would improve trade prospects for energy items like green hydrogen. Digital communications will be improved, and a secure and reliable internet connection will be made possible by the high-speed cable. Different industries will be financed including technology, energy, and telecommunications.

The EU Global Gateway aims to invest € 300 billion in projects that benefit partner countries. The main goal of the EU’s Global Gateway is to improve the connection between Europe and the rest of the globe through a variety of means. This plan includes several large-scale initiatives, such as investments in digital connections, infrastructure, the energy industry, and sustainable development in non-EU nations.

Facilitating trade, fostering economic expansion, and fortifying diplomatic ties with important allies are the objectives. Through IMEC, the EU may expand its influence in the Middle East, fortify its relations with India, and reinforce its place on the global scene. The EU has been considering ways to improve its relations with India for some time, and some European nations have been working hard to strengthen their diplomatic relations with New Delhi.

“President Biden praised IMEC as a transformative investment aligning with US interests in the Middle East”, amidst global shifts and Gulf States’ pursuit of independent foreign policies”

US President Joe Biden called it a “big deal and a game-changing investment in the region”. Additionally, the project fits the Biden administration’s eagerness to collaborate with New Delhi in the Middle East. The Biden administration’s efforts to reassure US allies in the Middle East about Washington’s commitment to the region are a major factor in its support for IMEC. After Russia invaded Ukraine in February 2022, there has been a lot of pressure on Gulf states to choose sides. However, these states have decided to have independent foreign policies instead of picking one side. They maintain strong relationships with countries like the United States, China, and Russia.

This approach makes sense for the Gulf states because it gives them more freedom and influence in global affairs.  While officials in Abu Dhabi and Riyadh see this trade corridor to further balance their networks in Europe and North America with those in China and other countries of the Middle East, Washington will see it as a way to stop China’s geoeconomic rise in the region and move GCC states closer to the West’s orbit of influence. The Emiratis and the Saudis will approach this corridor with the goal of further positioning their nations as bridges between the West, East, and Global South, rather than seeing themselves as backing US-led efforts to push back against Beijing’s BRI.

The Russia-Ukraine war’s destabilizing effects, which are being felt on several continents, from Europe’s energy problems to the escalating food insecurity in African and Arab nations have made it possible for Saudi Arabia and other GCC states to take advantage of their resources and geographic location to strengthen their roles as crucial allies to the Global North and Global South amidst chaotic international crises. This was demonstrated by the words of appreciation US President Joe Biden gave to his Emirati counterpart at the IMEC unveiling event in India. “Thank you, thank you, thank you,” Biden said to UAE President Mohammed bin Zayed, “I don’t think we would be here without you.”

 China’s Reliance on the Gulf

In 2020 China imported 375 million tons of crude oil from six GCC nations, a 140% increase from the previous year and 69% of China’s total imports of crude oil. The United Arab Emirates and Qatar are two of the six members of the regional bloc that has around 45% of the world’s reserves of crude oil. All its participants are involved in China’s Belt and Road Initiative. Chinese BRI investments of $5.5 billion were given to Saudi Arabia in H1-2022. Moreover, $106 billion worth of trade was conducted in 2022 between China and Saudi Arabia, about twice as much as between the US and Saudi Arabia.

IMEC is aimed at increasing connectivity and economic integration between Asia and Europe. IMEC has the probability to boost India’s trade with the Middle East and EU, providing improved accessibility, secure supply chains, and food security. The United States supports IMEC as part of its efforts to reassure allies in the Middle East and counter China’s geoeconomic rise. However, from the UAE and Saudi Arabia’s perspective, IMEC is an opportunity to expand its influence and establish itself as a bridge between participating states. According to the EU, IMEC is part of its Global Gateway strategy, which aims to enhance connectivity between Europe and the rest of the world.