The promised gateway

That was the logic when the India-Middle East-Europe Economic Corridor (IMEC) was announced at the G20 summit in New Delhi in 2023 as a modern, multimodal link between India, the Gulf, and Europe. 

The original memorandum of understanding was signed by seven countries and one bloc: India, the United Arab Emirates (UAE), the United States (US), Saudi Arabia, France, Italy, Germany, and the European Union (EU).

Widening conflict in West Asia has exposed the fragility of key maritime chokepoints like the Strait of Hormuz and the Bab el-Mandeb Strait; these crises have underscored the need for safe transit routes across the region. 

In April, Deputy Assistant Secretary in the US Department of State, Dane Johnston, discussed the IMEC with the Washington-based think tank, Atlantic Council, pointing to the situation in West Asia where Iran has effectively closed the Strait of Hormuz, disrupting trade and supply chains. “When we talk about the IMEC, let’s just start with the early administration, when US President Donald Trump called it ‘one of the greatest trade routes in history’. 

That is a good person for you to take your direction from on your priorities,” said Johnston.

The economic potential, he added, “is unmatched. It is also a way to advance our political and security interests. 

I think now more than ever we have seen the risks of a single point of failure when it comes to our trade routes and movement of goods, and what that represents.”

Trade arteries

Since the US and Israel launched military strikes on Iran on February 28, the Strait of Hormuz, through which about 20 per cent of global maritime oil trade and around one-fifth of global liquefied natural gas trade passes, was effectively blocked. 

This triggered a major crisis, which disrupted energy and shipping and raised the price of Brent crude to $114 per barrel in March (with some reports indicating peaks near $115-$116). 

Consequently, war-risk insurance premiums have skyrocketed. Major Global logistical giants like Maersk and  Hapag-Lloyd suspended bookings, diverted services, and applied emergency conflict surcharges. 

“For a business person, cost is not the only criteria. Economic efficiency is not only the cost, but it also includes security and time,’’ Afaq Hussain, director of the Bureau of Research on Industry and Economic Fundamentals, a New Delhi-based research organisation, said.

“Today, my containers are stuck. I am not able to go to Europe. But if I would have had this route, my containers would have gone there. So it is not only about the cost,” he added. 

In early March, several insurers issued notices of cancellation or war-risk exclusions for areas linked to the Gulf and Iranian waters. Even where a route is technically navigable, cover can become unavailable at very short notice.

These events sent shockwaves around the region, particularly among the Gulf Cooperation Council (GCC) nations like Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain, because connectivity and oil revenue are lifeblood to them. Weaponisation of trade routes by adversaries has compelled these countries to look for alternative routes.

But the reality is that the IMEC corridor, which was launched with pomp and show, is still not a reality on the ground. Funding constraints, lack of political will and constant instability in the region have plagued the corridor from the start.

The IMEC was announced on September 9, 2023. On October 7, 2023 Hamas, the Palestinian militant group, attacked Israel, killing 1,200 Israelis. This incident served as a trigger to a chain of events that continues to plunge the region into chaos. 

For the administration of the former US president Joe Biden, the IMEC was an alternative to China’s Belt and Road Initiative (BRI). For the Gulf states, it was a pathway to deeper economic integration with Europe and India. For Israel, it promised a normalisation of trade ties that would reshape its regional standing. The war put all of that on hold.

“IMEC is highly exposed in its current form because both chokepoints sit along its maritime segments, creating serial rather than substitutable risks,” Dr John Calabrese, senior fellow at the Middle East Institute, a think tank in Washington, said. 

“Simultaneous disruption compounds delays and costs, effectively neutralising the corridor’s speed advantage. Until overland segments are fully developed, IMEC remains vulnerable to exactly this scenario,” he added.

The only alternative route via the Cape of Good Hope (a rocky headland on the Atlantic coast of South Africa’s Cape Peninsula) is long and time-consuming. 

“Rerouting via the Cape is already occurring as a short-term shock response to insecurity in key chokepoints. That rerouting has been ongoing for a couple of years, since Houthi (Yemeni armed group) attacks on commercial shipping began,” Calabrese added.

“Skyrocketing premiums and insurance withdrawal will undoubtedly disrupt IMEC’s cost competitiveness in the short term. However, such shocks are typically absorbed over time through repricing, state-backed insurance, and operational adjustments. Rather than undermining the IMEC, they shift its logic from efficiency toward resilience,” he added.

Adding to the strain, India-US trade relations soured sharply in August 2025 when the US imposed a 50 per cent reciprocal tariff on several Indian goods for buying sanctioned Russian oil. However, the interest in the IMEC has not waned, particularly among the European governments.

“The maximum dialogue on the IMEC has been happening in Europe. Italy is extremely interested. Germany is interested in IMEC. But I hardly find the IMEC being discussed in the policy circles in India,” Dr Nilanjan Ghosh, vice-president at the Observer Research Foundation, a think tank in New Delhi, said. 

But here is the uncomfortable truth: even if the war ends tomorrow and there is relative “peace” in the region, the IMEC would not be ready. The infrastructure to support the corridor on the ground is just not in place yet. Countries like Saudi Arabia and Jordan do not have their share of platforms and railways. 

“In Jordan, you have a complete missing link in the railway. There is no railway in Jordan for around 260 to 270 kilometres (km),” Ghosh said. 

Even where rail exists, it is fragmented. Ghosh noted that Saudi Arabia’s internal rail network remains “not integrated” and is “not even connected to Israel”. The GCC Rail and Etihad Rail projects promise eventual cohesion. But some of the timelines stretch into an uncertain future.

“You have to get these different countries together to come out with a common, harmonised governance system, where they recognise each other’s data standards, transportation standards, and product standards. That harmonised governance structure within these IMEC countries is also missing,” Hussain said.

Fragments of a route

While the larger part of the infrastructure is not in place yet, there are certain patches within the corridor that have started moving. Sohar Port in Oman, strategically located outside the Strait of Hormuz, has seen an uptick in cargo volumes as shipping lines seek viable alternatives. 

The port’s operator has positioned it as a “landbridge” option, which means overland connectivity between Sohar and markets deep within the Arabian Peninsula are accessible via a desert highway that cuts through the ‘Empty Quarter’ into Saudi Arabia.

“I’ve been talking to people in the Middle East (West Asia)  where they are finding more and more routes like IMEC to move cargo,” Hussain stated. “Oman is being used because Jabal Al (Port in the UAE) is inside the Strait of Hormuz. Omani ports, whether it is Salalah, whether it is Duqm, whether they are Sohar, are outside the Strait of Hormuz.”

From Oman’s ports, cargo moves via Saudi Arabia’s Empty Quarter Highway to Red Sea ports like Jeddah and Neom, or overland through Jordan towards Israel. “There’s cargo already moving on the road,” Hussain said. 

These are not seamless routes; they involve multiple handoffs, higher transaction costs, and do not have harmonised customs procedures that a fully built IMEC would provide. But they are moving and show promise for the future. “There is a Saudi-Egypt land bridge already announced, which would make movement of cargo from Saudi Arabia to Egypt very quick,” Husssain added.

DP World, an Emirati multinational logistics company, has pledged $800 million for the development of Syria’s Tartus port. 

There is now a network of corridors in West Asia which can reach into Europe through different outlets. Certain patches of the corridor’s infrastructure are being built from scratch, which is driven by necessity.

Angela Chitkara and Samantha Sutton, who co-teach a graduate capstone on IMEC at Columbia University, wrote recently in Fortune, pointing to India’s Digital Public Infrastructure (DPI) as a potential model for cross-border coordination. DPI enables flows of data, services, and capital across borders without requiring every participant to adopt identical systems. 

But the model depends on trust. “Even between the US and Europe, data-sharing frameworks have faced repeated challenges. Extending trust across the US-India corridor will require alignment on standards and safeguards,” the article said. 

“IMEC is no longer just a concept on paper,” they wrote. “It is being tested in real time.”

On India’s part, work has already begun on bilateral relationships and initiatives that focus on strengthening the “foundational leg” of the corridor bilaterally.

India and the UAE soft-launched the Virtual Trade Corridor (VTC) in September 2024, based on the Master Application for International Trade and Regulatory Interface (MAITRI), a middleware platform developed by an Indian public-sector undertaking. The VTC aims to integrate customs, logistics, and regulatory processes between India and the UAE into a single digital system. Johnston, in his Atlantic Council remarks, said, “The digital aspect of the IMEC is one of the things that makes it really unique. We have some of the best emerging technologies here in the US. We are looking to deploy all of our private sector partners on that.”

India sits at the corridor’s eastern anchor with a clear-eyed view of the IMEC’s role. It is not a Plan A. It was never meant to be.

“The IMEC will always be Plan B,” Hussain added. “Plan A is always a maritime corridor. If you have safe maritime options, that will always be good. So the IMEC will be your Plan B alternative.”

India’s infrastructure responsibilities are limited. “India just needs to look at its own ports, which are Mundra Port ( in Gujarat) and Jawaharlal Nehru Port Authority in Mumbai, which are really efficient,” Hussain explained. 

“Tomorrow, you tell us we have to go to IMEC; we will be ready. The hard infrastructure, the missing rail links and the capacity expansion at Haifa (Israeli port city) are someone else’s responsibility. India’s primary role is diplomatic,” he added. 

Playing both sides 

As the IMEC inches forward, China is not waiting; it has spent more than a decade embedding itself into the BRI investment that has exceeded $1.3 trillion since 2013. 

Saudi Arabia and the UAE, both signatories to IMEC, are also deeply integrated into China’s economic orbit. In early 2026, the Public Investment Fund and Chinese partners finalised plans for a massive aluminium complex in Yanbu, Saudi Arabia. This is not yet operational, though. 

Abu Dhabi has positioned itself as the export springboard for Chinese battery energy storage systems destined for Africa and Southeast Asia.

Saudi Arabia and the UAE are BRI participants and IMEC signatories. Israel, while part of the IMEC, has engaged selectively with Chinese projects but is not formally a BRI participant.

“For almost all the participating nations except the US, the IMEC does not represent a geopolitical contest,” Ghosh added. “Instead, it serves as economic insurance to future-proof global trade.”

China’s foothold in the Gulf is secure regardless of the IMEC’s trajectory. Chinese enterprises are now long-term partners in projects like the Master Gas System expansion in Saudi Arabia, in which they are integrating smart control systems into the core of the Kingdom’s energy grid. 

More than 10,000 Chinese companies were registered in Dubai by early 2026, with investment licenses in Saudi Arabia more than doubling in 2024.

Yet China’s model has also met pitfalls. Saudi Arabia Railways confirmed in early 2026 that no agreement was reached with the Chinese consortium due to local content shortfall on the 1,500-km long Saudi Landbridge Project worth $26-$27 billion. The project will now move forward in phases under a new procurement model, with the completion expected before 2034.

Notably, the IMEC is not a counterweight to BRI, nor was it designed to be. But if it fails to materialise, the prospect for Gulf-Asia connectivity will hang in the balance.