Connectivity has become the new currency in geopolitics and the India-Middle East-Europe Economic Corridor (IMEC) has emerged as a critical link in Delhi’s endeavor to increase trade vis-a-vis Europe. The ambitious IMEC – conceived as a product of shifting geopolitical realities in the region, particularly with the conclusion of the Abraham Accords and the initiation of I2U2 (India, Israel, United States and UAE) consultations – has facilitated new levels of strategic trust and cooperation.
Announced with great fanfare on the sidelines of the Delhi G-20 summit, IMEC is often viewed among policymakers and analysts through a strict geopolitical lens, touted as a potential counterweight to China’s Belt and Road Initiative (BRI). Yet its geoeconomic significance is equally profound. As a multimodal connectivity initiative, IMEC seeks to integrate rail and sea routes, expand telecommunication networks and energy grids, and establish high-speed undersea data cables. Consequently, it represents a certain level of strategic alignment on connectivity among partners and has further attracted the attention of key regional players.
A year and a half after its launch, however, IMEC remains at its best a political statement of intent until practical steps and frameworks are developed by signatories to operationalize its potential.
There has been a recent uptick in diplomatic activity around the project. U.S. President Donald Trump has called it “one of the greatest trade routes in all of history.” Within Europe, France has already appointed a special envoy to promote the Marseille port as IMEC’s entry point into Europe. Italy has positioned Trieste as its preferred entry point into the European market and is planning to appoint a special envoy as well in the upcoming months, reflecting emerging competition over the IMEC’s economic and commercial dividends.
At the same time, the corridor has reignited a classical liberal dilemma: will trade foster stability, or will peace be a prerequisite for trade? IMEC was once seen as a major breakthrough for regional connectivity; however, the October 7 Hamas attacks in southern Israel and Israel’s subsequent invasion of Gaza have thrown the project into geopolitical uncertainty.
For Israel, a permanent settlement in Gaza will remain a policy priority above IMEC for the foreseeable future. That will damage the prospects of Saudi-Israel normalization, which some believe is a necessary condition for the operationalization of IMEC.
Meanwhile, the exclusion of key regional players such as Egypt, Oman, and Turkiye from IMEC warrants reconsideration. Egypt, despite controlling the strategic Suez Canal, finds itself sidelined. Oman, India’s most trusted strategic partner in the region, is conspicuously absent, despite its ports being well placed to remove logistical hurdles from the equation and bypass Iran and the contentious waterways of the Strait of Hormuz. These countries’ absence not only limits IMEC’s outreach and impact, but it also risks creating inefficiencies for a project already poised with structural logistical, financial, and geopolitical hurdles.
Qatar, another non-party to the IMEC agreement, has been advocating for Gulf nations to engage with both China’s BRI and IMEC. This adds another layer of complexity, promoting a more inclusive approach that considers integrating China and Turkiye into the corridor’s framework.
The China factor clearly looms large. IMEC’s rhetoric will have to try and match the scale, financing, and institutional momentum that the BRI’s footprint has generated. Furthermore, key stakeholder partners Saudi Arabia and the UAE do not view IMEC as a rival to the BRI. Their approach to Chinese investments remains pragmatic, leveraging them as tools to diversify their economies and make progress on regional development. Israel and Greece have also welcomed Chinese investments. China operates a terminal in Haifa port and holds majority stakes in Piraeus port, which is also competing as a potential entry point for IMEC into Europe.
India’s own past infrastructure commitments, such as the International North-South Transport Corridor (INSTC) and the Chabahar Port initiative, have yet to deliver significant economic dividends. Yet the continued relevance of these projects remains tied to strategic and geopolitical imperatives rather than pure commercial gains, with INSTC serving as a critical trade link amid deepening energy ties between Delhi and Moscow, and Chabahar providing critical access to Afghanistan while bypassing Pakistan.
Beyond geopolitics, the financial realities and investments into IMEC remain uncertain. Questions around insurance, profitability, and long-term funding persist. Saudi Arabia has committed $20 billion but broader investment commitments remain unclear. Estimates suggest that roughly $3 to $8 billion will be needed to develop each IMEC component. Furthermore, Europe’s engagement with IMEC appears to be more focused on expanding its Indo-Pacific outreach and strengthening ties with the Gulf rather than deriving direct economic benefits from the corridor itself.
Logistical challenges further complicate the picture. Maritime transportation remains the most efficient and cost-effective mode of trade, yet IMEC envisions a 5000-kilometer route with land-based corridors through rough terrain that includes deserts and multiple points of loading and unloading required, further introducing delays and increasing shipment costs. The proposed rail route from Jordan into Israel does not exist, with no progress made for the last 25 years. Meanwhile, supply chain vulnerabilities also persist, with increasing freight costs and India’s current container production capacity at 30,000 compared to China’s 3 million, further underscoring the structural limitations that could shape Indian ambitions about IMEC’s competitiveness.
To tackle these hurdles, an agreed framework needs to be developed among different stakeholders to work out the nuts and bolts of the project. Three critical factors can further drive India’s operationalization of IMEC: mobilizing private sector participation; inclusion of other regional players to establish alternative routes; and focusing on rapidly developing its shipbuilding industry and container capacity.
As of now, IMEC is primarily a state-to-state driven connectivity initiative with little to no footprint by private stakeholders. Greater involvement of the private sector and multinational corporations will strengthen IMEC’s competitiveness and increase the risk and investment appetite for other stakeholders and partners in the project. Support provided from the inclusion and guidance of industry experts will expedite the timeline for IMEC’s actual activation.
Israel’s questionable commitment to the project under current geopolitical conditions will necessitate thinking about alternative trading routes. To this extent, expanding the IMEC bandwagon to include Egypt, Oman, and possibly Turkiye as stakeholder partners will provide India with alternative ports and shipping routes to reach Europe. The involvement of Cairo in IMEC and collaboration with the Suez Canal as well as Said or Alexandria port as an alternative shipping route within the project will be a win-win model for all involved. Furthermore, a possible reduction in land and rail networks with the inclusion of new places within IMEC will also reduce carbon emissions, ensuring that the corridor complies with sustainability standards and remains environmentally friendly.
India has also intensified efforts in shipbuilding in a bid to reduce its supply chain vulnerabilities and container capacity deficit vis-a-vis China. Delhi has established a 250 billion Indian rupee ($2.9 billion) maritime development fund to support long-term financing for the shipbuilding and repair industry, aiming to enhance its maritime logistics infrastructure and expand commercial shipping fleets. Additionally, India plans to boost container shipping capacity by acquiring more second-hand vessels, which will likely lead to a 10 percent to 12 percent capacity increase. While trying to compete with China’s dominance in shipbuilding is an enormous task, Delhi’s edge may lie in catering to smaller vessels – an area largely overlooked by major shipbuilders in China, South Korea, and Japan. By capturing this specific niche, India could enhance its maritime logistics and strengthen its role in IMEC’s supply chain.
The joint statement issued by Trump and Indian Prime Minister Narendra Modi last month confirmed that “the leaders plan to convene partners from the India-Middle East-Europe Corridor and the I2U2 Group within the next six months in order to announce new initiatives in 2025.” Much depends on how the discussions in the coming months will pan out.