Q. The India–Middle East–Europe Economic Corridor (IMEC) was envisaged as a transformative connectivity initiative to boost trade between continents. In this context, discuss the strategic and economic significance of the IMEC for India and analyse how the ongoing instability in West Asia poses challenges to its realisation. (15 Marks, 250 words)

Core Demand of the Question

  • Discuss the strategic significance of the IMEC for India.
  • Discuss the economic significance of the IMEC for India.
  • Analyse how the ongoing instability in West Asia poses challenges to its realisation.

Answer

Introduction

The India–Middle East–Europe Economic Corridor (IMEC), conceptualised during India’s G20 Presidency(2023), sought to weave multimodal transport, energy and digital links between India and Europe via the Middle East. Backed by major partners, it aimed to deepen strategic ties and lower trade frictions at a time when the EU was India’s largest trading partner (over US$137 bn in FY 2023–24).

Body

Strategic significance for India

  • Geopolitical positioning: A transcontinental corridor elevates India as a connectivity partner and diplomatic convenor among Western, Gulf and regional states.
  • Deepening India–Gulf strategic ties: Infrastructure cooperation cements long-term partnerships and bilateral security linkages.
    Eg: India–Saudi strategic partnership since 2010 and deep India–UAE ties underpin the corridor’s eastern leg.
  • Energy and clean-fuel diplomacy: IMEC envisaged cross-border pipelines and hydrogen links to secure energy cooperation and decarbonisation pathways.
  • Digital and financial integration: Trans-continental cables and payment interoperability boost secure data flows and remittances.
    Eg: UPI interoperability with UAE and Saudi Arabia already improves digital connect.
  • Maritime and supply-chain resilience: Alternate land/sea routes reduce exposure to chokepoints and maritime insecurity.
    Eg: Houthi attacks on Red Sea shipping highlighted the need for secure alternatives.

Economic significance for India

  • Trade facilitation & cost-time gains: Shorter, multimodal routes were expected to lower logistics costs and speed exports to Europe.
  • Infrastructure stimulus & jobs: Corridor projects would catalyse port, rail and logistics investments and local employment.
    Eg: Proposed cross-Saudi/UAE railway aimed to link sea-legs and create hubs.
  • Energy transition market access: Export avenues for green hydrogen and clean energy technologies could open European markets.
  • Digital-services and fintech growth: Cross-border payments and digital infrastructure expand India’s services footprint.
    Eg: UPI’s regional adoption underpins corridor’s fintech promise.
  • Efficiency and emissions gains: Integrated routes were designed to increase logistics efficiency and lower GHG intensity per unit trade.
    Eg: IMEC explicitly aimed to “increase efficiencies, reduce costs, lower greenhouse gas emissions.”
  • Financial integration & corridor finance: A pooled approach could address insurance, tariff harmonisation and financing gaps for large projects.

How West Asia instability undermines IMEC’s realisation

  • Erosion of Israel–regional rapprochement: The Gaza war shattered the political basis for Jordan–Israel and broader normalisation ties.
    Eg: Jordan–Israel relations fell to historic lows after Israel’s campaign in Gaza.
  • Human cost and political backlash: Prolonged conflict polarises regional publics and governments, reducing appetite for integration.
    Eg: The Gaza war had caused about 60,000 deaths, intensifying regional tensions.
  • Higher transit risk & insurance costs: Active conflict and Houthi attacks raise premiums and deter shipping through traditional routes.
    Eg: Red Sea attacks validated the corridor’s rationale but simultaneously increased maritime insurance and risk.
  • Intra-Gulf economic rivalry: Competition between Gulf powers on tariffs and free-zones complicates corridor harmonisation.
    Eg: Riyadh’s 2021 tariffs on GCC free-zone trade signalled commercial frictions.
  • Structural fragility without political settlement: Unless principal issues (e.g., Palestinian question) are addressed, corridor infrastructure remains vulnerable to relapse.
    Eg: Western states’ changing stances and steps like Germany curtailing certain arms supplies illustrate shifting calculations.

Conclusion

IMEC offers India a strategic gateway to Europe via the Middle East, enhancing trade efficiency, energy security, and geopolitical reach. The government has advanced related initiatives like the PM Gati Shakti Master Plan and port modernisation under Sagarmala to align with this vision. However, sustained diplomatic engagement, diversification of supply chains, and regional stability efforts are crucial to realise its full potential, ensuring India remains a central node in future global trade networks.

To get PDF version, Please click on "Print PDF" button.

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Aiming for UPSC?

Download Our App

Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">






    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.