By: Simran Sodhi

It would be an appropriate assessment to make at this point that one of the biggest casualties of the Israel-Iran conflict is likely to be the ambitious India-Middle East- Europe Economic Corridor (IMEC). The project was announced on the side lines of the G20 Summit held in September 2023 in New Delhi and aims to connect India to Europe via the Middle East with ports, railways and roads. Many analysts point out that the IMEC will challenge China’s Belt and Road Initiative, when completed, and that is also the reason why the United States had backed the project with great enthusiasm (but so far has not committed any funding for the project). 2023 was the time when Joe Biden was President of the US and had backed the project, but with President Donald Trump at the helm of affairs now, that is yet another unpredictability in the project taking off. 

The proposed corridor will link India to Europe via the United Arab Emirates (UAE), Saudi Arabia, Jordan, Israel and Greece. First it was the Israel-Gaza conflict that changed the equations between the Middle East and Israel. The 2020 Abraham Accords, wherein UAE normalized relations with Israel followed by Morocco, was seen as a watershed moment in Middle East politics. It also saw Saudi Arabia moving forward to recognising Israel, prodded by the US that it would provide the Saudis security assurances in return for recognizing Israel. All that changed on Oct 7, 2023 with the horrific attack by Hamas. And as Israel continues to bomb Gaza in an unrelenting fashion, all deals seem off the table. And now with the heightened tensions between Iran-Israel, the fate of IMEC is more uncertain than ever before.

Economics and politics are deeply intertwined and nowhere is this more obvious than in the ambitious IMEC project to link continents. As the political situation changes and Iran-Israel tensions peak, with Gaza already in the middle of a humanitarian crisis, it will become difficult for the UAE, Saudi Arabia and Jordan to promote any economic activity that links them to Israel. It is also to be noted here that this becomes more problematic in Jordan where most of the kingdom’s population is ethnically Palestinian, including Queen Rania.

The Middle East, since 2023, seems to be in a constant state of tensions that show little sign of an early resolution. Iran today, even after the US bombing and its recent war with Israel, seems to be standing tall and reports suggest little or no damage to its nuclear capabilities. It’s proxies like Hamas and Hezbollah in Lebanon have nevertheless been weakened to a great degree. For Iran, this is also an opportunity to take a leadership role in the region and push the Saudis down a bit on the rung. IMEC is also going to get affected in the context here that the Saudis can ill afford an impression both domestically and in the Middle East region that they failed to stand by the Palestinians. And with the Saudis not wanting to go ahead with recognizing Israel, and then not wanting to get into deeper economic ties with Israel, IMEC will have trouble taking off. It would be a safe bet to state at this point that even if IMEC eventually does take shape, it is unlikely to happen as long as this conflict and humanitarian crisis continues.

After the Oct 7 attack by Hamas, former US President Joe Biden had twice said that he was convinced that IMEC is one of the reasons why Hamas attacked Israel. “I’m convinced one of the reasons Hamas attacked when they did, and I have no proof of this, just my instinct tells me, is because of the progress we were making towards regional integration for Israel, and regional integration overall. We can’t leave that work behind,” he said. There is little doubt in most people’s minds today that the attacks by Hamas was meant to bring world attention back to the Palestine cause, and to stop Saudi Arabia from going forward with recognising Israel since this regional economic integration would have brought Israel closer to UAE and Saudi Arabia.       

So, in the short term, it would be a fair point to make that as long as the crisis in Gaza continues and the Israel-Iran tensions dominate the regional politics, one should expect UAE and Saudi Arabia to focus more on their inter-connectivity projects. India can always be included in those equations but the inclusion of Israel is difficult. Saudi Arabia has said repeatedly that there can be no recognition of Israel without a Palestinian State. So IMEC is likely to be a limited project going forward, contrary to the grand ambitions with which it was launched. Once things return to a new normal, we might see IMEC and its related projects take off but as of today, this will remain on the backfoot for most member states.