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Dr. Gülsüm Akbulut

During the G20 Summit on September 9-10, 2023, the United States, India, Saudi Arabia, the United Arab Emirates, France, Germany, Italy, and the European Union issued a joint statement in the form of a memorandum of understanding. The purpose of this declaration was to provide a framework for the development of an economic corridor between India, the Middle East and Europe.

The India-Middle East–Europe Economic Corridor (IMEC) project aims to redefine global trade routes, promote connectivity, and facilitate the growth and export of clean energy and digital communications. The proposed IMEC corridor begins in India and crosses the Arabian Sea to reach the United Arab Emirates (UAE). From there, it passes through Saudi Arabia, Jordan, Israel, and Europe. This route includes both maritime and railway transport components. (Map) It also includes cables to connect power grids and telecommunications lines.

The proposed corridor has sparked both economic and political debate among key stakeholders. The countries’ respective approaches vary.

The United States issued an official statement indicating its intention to establish links between Asia and Europe with its allies. The U.S. wants to improve trade and productive capacity in the region and strengthen food security and supply systems. The U.S. approach aims to facilitate the mobilization of new investment from a broad range of partners, including the private sector, to support the creation of high-quality jobs.

Analysts point out that the IMEC corridor is a strategic countermeasure to China’s growing influence in the region, as China plays a proactive role in the Middle East. In 2023, China further expands its engagement with Arab and Gulf countries by establishing various cooperative ventures. China has facilitated diplomatic relations between Saudi Arabia and Iran through mediating the agreement between the two countries to restore relations and end hostility. The decision to expand the BRICS groups at the  August 2023 summit to include Saudi Arabia, the United Arab Emirates, Iran, and Egypt, among others, also appears to create another  BRICS +  platform led by China. The IMEC corridor is therefore expected to prevent deepening of relations between China and the Arab and Gulf states.

The corridor will help deepen trade and investment relations between the European Union and the Gulf States. The IMEC corridor will have an important place in the Partnership for Global Infrastructure and Investment (PGII), which was launched in 2022 to promote public and private investment in infrastructure. Through this partnership, the G7 aims to mobilize up to $600 billion by 2027 to close the infrastructure investment gap in partner countries. European Commission President Ursula von der Leyen said the EU supports the IMEC corridor as a green digital bridge across continents and expects trade between India and Europe to be 40 percent faster than through the Suez Canal. Goods could be transported from Mumbai to Europe via the new route, which would reduce costs by 30 percent.

India has taken the lead in creating the IMEC corridor and has been the driving force behind its establishment. This corridor is expected to strengthen India’s trade and export activities. It not only strengthens India’s regional influence, but also gives Indian companies the opportunity to play an important role in infrastructure development. Saudi Arabia plays a crucial role in the corridor’s route and aims to create a major logistics and trade center as a bridge between East and West. Israel also aspires to become a major trade and logistics center and the project has the potential to contribute to ongoing normalization efforts between Israel and the Arab states. Jordan is an important hub within the emerging corridor. However, Jordan’s inadequate infrastructure could be an obstacle to the success of the project. The United Arab Emirates is positioning itself to play a proactive role in shaping global trade dynamics. The UAE is focused on reshaping supply chains and is eager to promote engagement on a global scale. Türkiye’s absence from the proposed IMEC project drew a reaction from President Recep Tayyip Erdoğan. In his statement, Erdoğan stressed that Türkiye is an important production and trade center and  that the most cost-efficient route between East and West should pass through Türkiye.

The success of the IMEC depends on several critical factors. Unlike China’s Belt and Road Initiative (BRI), which relies heavily on government funding, this corridor mostly depends on investment from private companies. Managing project costs and securing long-term commitments from multiple partners are also among the major challenges. While detailed project plans are expected in the next two months, according to the memorandum, the corridor’s planned roots may still change due to pressure from other countries. The success of the project will be seen over time.

Dr. Gülsüm Akbulut

Director of Global and Turkish Economic Studies

FPI- Foreign Policy Institute

18 September 2023