On May 13, 2024, India and Iran finally signed a 10-year long-term bilateral contract for the operation of Chabahar Port — it was inked between the Indian Ports Global Limited and the Port and Maritime Organisation of Iran, in the presence of India’s Ports, Shipping and Waterways Minister Sarbananda Sonowal. Mr. Sonowal said that the deal and the Chabahar Port is more important than just a bridge linking India with Iran. It is a critical economic route that links India with Afghanistan and the Central Asian countries.
But before this, a similar, and equally important, connectivity project, the IMEC, or the India-Middle East-Europe Corridor, was signed on the sidelines of the G-20 summit in New Delhi on September 9, 2023 by the European Union, France, Germany, India, Italy, Saudi Arabia, the United Arab Emirates (UAE) and the United States. Designed and formulated under the Partnership for Global Infrastructure and Investment (PGII), it aims to stimulate economic development through enhanced connectivity and economic integration between Asia, the Arabian Gulf and Europe.
As a counter to the BRI
The IMEC will comprise two separate corridors — an east corridor connecting India to the Arabian Gulf and a northern corridor connecting the Arabian Gulf to Europe. In addition to existing maritime and road transport routes, it will include a railway network that aims to be a reliable and cost-effective cross-border ship-to-rail transit network for goods and services to transit. The corridor also envisages along the railway route, the laying of cable for electricity and digital connectivity and a pipeline for clean hydrogen export. In its plan, the Indian ports of Kandla, Mumbai and Mundra will be connected by sea links to Fujairah, Jebel Ali and Abu Dhabi in the UAE in the east, followed by the rail-road link through Saudi Arabia and Jordan and onwards to Europe in the west by the port of Haifa in Israel, and along with the ports in Marseille in France, Messina in Italy and Piraeus in Greece.
This 4,800 kilometre-long IMEC corridor aims to secure regional supply chains, increase trade accessibility and improve trade facilitation across regions. Currently, much of the trade between India and Europe is through the Suez Canal as there is no overland access due to Pakistan being located to India’s west overland. The IMEC will thus help overcome this obstacle and also cut down on the time, distance and costs of transit of goods from India to Europe significantly. It is estimated that the time and cost of transporting goods to Europe from India will be reduced by 40% and 30%, respectively. It is also being touted as an effective counter to China’s Belt and Road Initiative (BRI) in the region — and, therefore, has the U.S. as one of its major stakeholders.
The shadow of the Gaza war
But even before the potential impact of this path-breaking project could be examined by experts, the war in Gaza broke out on October 7, less than a month after its announcement. As a result, the whole project was stalled. In an interview on May 12, External Affairs Minister S. Jaishankar acknowledged that the delay in implementation of the IMEC in view of the current situation in West Asia is a matter of “concern” and the expectation generated following firming up of the initiative in September last has to be “adjusted” a bit now. He, however, was confident that work on the project would progress well after the war.
However, the Gaza war has amply proven that the IMEC has serious missing links in its current form. During the course of this war, the Houthis in Yemen have blocked the ships of Israel and its western allies from access to the Red Sea. Despite naval deployment by the U.S. Navy and Europe, the Houthis have not been deterred and have successfully targeted those ships. As a result, Israel and its western allies have been forced to take the longer route across the Cape of Good Hope in South Africa, increasing shipping time as well as insurance costs.
During the same period, Iran has repeatedly threatened to close the Strait of Hormuz in the north through which most crude oil and natural gas is shipped to other parts of the world, including India. In fact, a similar situation happened during the Persian Gulf Crisis in the summer of 2019 which was triggered by the downing of a U.S. drone by the Iranian military; the drone was over Iran. Reports suggested that the U.S. President ordered retaliatory military strikes against Iran, to be executed at dawn on June 21 before changing his mind at the last moment.
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During this period, there were repeated incidents of Iran intercepting ships in the Persian Gulf and the Strait of Hormuz. The Indian Navy had to launch ‘Operation Sankalp’ in order to ensure the safe passage of Indian flagged ships through the Persian Gulf. There were armed security teams from the Indian Navy on Indian flag ships transiting the Persian Gulf.
Coming back to the Gaza war, in Israel, two of its major ports, Eilat and Haifa, have suffered heavy losses due to disruption in trade through the Red Sea and also the targeting of these critical ports by Hamas and its allies. A consortium led by India’s Adani Group purchased Haifa port in January 2023, expecting an expansion and an increase in traffic but the Gaza war has put everything on hold.
On Oman and Egypt
The IMEC envisages that the ports in the UAE such as Fujairah and Jebel Ali will form the eastern offload points for ships transiting to India. The problem here is that all the ports of the UAE are located in the Persian Gulf and are well within the Strait of Hormuz. Therefore, they will always be threatened by any conflict situation in the Persian Gulf.
What is the way out? Oman provides the perfect foil to this threat. Its ports open up into the Arabian Sea, well away from direct influence of an Iranian threat. It also offers the closest and direct link to ports in India. Traditionally too, merchants in Oman and India have traded for centuries through small boats called ‘dhows’ and Oman is considered India’s gateway to West Asia. Oman is also an acceptable partner politically in the region as it has good relations with all stakeholders, including Israel.
Similarly, towards the West, instead of the ports of Israel, there has to be an alternate spur of the IMEC traversing through Egypt and ending at any of its major ports in the Mediterranean Sea — this will provide a safe and direct sea route to ports in Europe. Egypt is also a major player in West Asia and its inclusion will only help balance out the regional dynamics too. Like Oman, Egypt has good relations within the region and with Europe, Israel and the U.S. In fact, Egypt had quietly voiced its displeasure on being left out of the IMEC and such an extension will not only take care of the politics but also the economics of it.
With the inclusion of Oman to the east and Egypt to the west, the IMEC can be made safe from disruptions from future conflicts and can, therefore, be considered vital to plug the critical missing links in the current structure of the IMEC.
The IMEC is a futuristic and path-breaking initiative. Building upon the wave of reconciliation within West Asia triggered by the Abraham Accords, this could be an ideal foil not only to China’s BRI but also as a useful tool to better integrate the region and insulate it from threats posed to connectivity due to conflict. The missing links, highlighted by the Gaza war, can add a layer of insurance to this ambitious project.
Rajeev Agarwal, a retired colonel, is the Assistant Director of the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), New Delhi. He was Director in the Ministry of External Affairs and Director, Military Intelligence. The views expressed are personal
