IMEC's Comeback

Indian President Narendra Modi has been busy. Between February and April, he visited his counterparts in the United States, the UAE, Italy, and France. Saudi Arabia is coming up. The thread through all of these visits is Modi’s push for a revamp of the India-Middle East-Europe Economic Corridor (IMEC), the large-scale generational infrastructure project connecting Asia to Europe and the United States via the Middle East. Touted as a potential counterweight to China’s Belt-and-Road Initiative (BRI), the multi-nodal connectivity project was announced with great fanfare by the signatories at the 2023 G20 summit in Delhi. But it was stalled only months later by the outbreak of war in the Middle East, one of the project’s central hubs. 

Since then, the security concerns that stalled the initiative largely remain, as do notable viability and logistical constraints, and perhaps most importantly, the wide-open question of finance. However, what has changed fundamentally since October 2023 is the incentive calculus for several of the actors involved.

Europe, pushed toward economic and security self-sufficiency, is forced to implement a revolution at lightning speed to ensure its security and competitiveness in a volatile international environment. The sudden need to de-risk not only from China but also from a confrontational, unreliable United States is speeding up European efforts to expand partnerships with other parts of the world to provide alternative markets, labor, value and supply chains, technology, energy, and raw materials. In this light, IMEC resurges as a ready-made master plan for long-term strategic autonomy.

Unsurprisingly, however, pressure unleashes centrifugal forces among EU member states. As initial plans to establish Greece’s Piraeus port as IMEC’s main entry point to Europe have been challenged due to Chinese majority ownership in it, France (Marseille) and Italy (Trieste) have been competing for the role. Both have appointed special envoys for IMEC and are engaged in active shuttle diplomacy with the signatory partners. Competition among Southern European countries focusing on national economic gain risks diverting attention away from the bigger picture of the corridor’s long-term transformative significance for European strategic autonomy and competitiveness.  

And then, of course, Europe’s geopolitical coming-of-age also means empty coffers. Whether European governments will be able to mobilize the necessary funds for IMEC (current cost estimates are at €500 billion) while simultaneously building European defense capabilities and updating industries and infrastructure at home is doubtful. The EU’s Global Gateway connectivity strategy, the logical EU avenue for investment in IMEC, had been widely criticized as lacking the economic scale and firepower to match Chinese offers even before the recent transatlantic economic and security rift put Europe’s financial projections under stress. Similarly, the European private sector, strained by the tariff nuclear bomb, without solid guarantees might be reluctant to invest in a project whose short- and mid-term security and economic profitability is uncertain.

In the United States, IMEC has enjoyed bipartisan support as a mammoth geo-economic project to counter Chinese influence in Asia and the Middle East, not least because it holds the potential to make the much-touted US pivot to Asia more feasible. The initiative matches some of the key priorities of US President Donald Trump’s administration:

• combining a focus on trade with a hawkish decoupling approach to China
• crowning Trump’s legacy Abraham Accords with a Saudi Arabia-Israel deal that would unite Washington’s key allies behind US interests and lure Gulf allies away from China
• protection and regional integration of Israel
• deals on Palestine/Gaza
• containing Iranian nuclear power.

Trump could unlock several of these dossiers by putting pressure on Netanyahu to end the Palestinian containment logic. More likely, Trump’s team may try to seize the present window to end Iranian malign influence in the region, which would remove one of the most important sources of regional instability and geo-economic risk for IMEC.

The January-March 2025 ceasefire in Gaza triggered a new push for IMEC. While Israel is not a signatory, its Haifa port (run by India’s Adani Group) is projected as the corridor’s central entry point into the Mediterranean. Persistent instability, the stonewalling attitude of Netanyahu’s governing coalition, and the Saudi rejection of normalization with no prospect of Palestinian statehood, however, raise substantial doubts about the viability of this route. Some see Israeli-Saudi normalization as a precondition for IMEC, notably because ensuring the safety of the corridor’s infrastructure would require solid regional security cooperation among IMEC stakeholders. In turn, should the Israeli route become viable, this would also bear significant economic potential for Palestinian post-conflict recovery and the reconstruction of Gaza. 

India and the UAE have emerged as central catalysts of the initiative. The two have been busy building infrastructure and reducing bilateral trade barriers in anticipation of the project. An increasingly dynamic EU-India relationship is set to further propel the project, with a string of high-profile visits and an EU-India free trade agreement to be concluded in 2025. IMEC fits neatly into Emirati and Saudi strategies to consolidate their position as stable energy partners and rising tech hubs between Europe and Asia. The China question looms large, however: While Saudi Arabia has continued to reject Western alignment (for example, investing in Chinese tech after the launch of DeepSeek), the UAE has doubled down on closer ties with and investments in the EU (for instance, a recent $40 billion investment pledge in Italy). Despite an increasing interest in the EU in recent years (because of IMEC and as alternative suppliers to Russian gas), the Gulf states continue to hedge their bets between the United States and China.

For Saudi Arabia, however, the relationship with Israel remains the trickiest geopolitical bottleneck. Riyadh’s incentive to bow to US pressure on normalization has decreased compared to mid-2023. Israel’s actions in Gaza have made it impossible for Riyadh to legitimize Israel while Gaza is still under fire and the Israeli government fails to offer a viable solution for either Gaza or Palestinian statehood. At the same time, the element of a Saudi-Israeli alliance to contain Iran plays a lesser role in Riyadh’s calculus today than it did in 2023 given the demolition of Iranian regional power over the past year.

Another change in the environment is that some of the key regional powers that are bypassed by IMEC (Türkiye, Egypt, Oman, Iraq, Qatar), and could be either competitors or potential branch-out options, have experienced an uptick in leverage. Türkiye stands out as a regional actor whose geopolitical significance for Europe has been boosted as it is the key international player in post-Assad Syria, took steps to dismantle the PKK, and has the largest standing army in NATO after the US. At the same time, the Iraq Development Road, a parallel land corridor through Iraq and Türkiye, looms as a potential competitor to IMEC. Several stakeholders’ lack of trust in President Recep Tayyip Erdoğan’s Türkiye, however, has made IMEC signatories reluctant to let Ankara join. Fears that IMEC might be highjacked by unreliable partners have been raised in the European Parliament. Egypt rightfully fears a devaluation of the Suez Canal, its main source of income. A more inclusive approach to IMEC would reduce dividends but also contain potential spoilers and diversify geopolitical and financial risk. 

Next steps for IMEC will be to set up a governance structure, agree on a timetable, and carry out feasibility studies to fine-tune infrastructure and cost estimates. In February, Trump and Modi jointly announced that they would convene a summit of IMEC partners within six months and introduce concrete partnership initiatives by fall 2025. For Europe, this is a geopolitical leap of faith. Ironically, while starting grand new ventures at a time of transatlantic confrontation seems counter-intuitive, IMEC is simultaneously a grand de-risking strategy and one of the few large strategic projects on which EU and US approaches currently align.