The Union Cabinet chaired by Prime Minister Narendra Modi on March 13 approved the Inter-Governmental Framework Agreement (IGFA) between India and the United Arab Emirates (UAE) on cooperation for the empowerment and operation of the India-Middle East Europe Economic Corridor (IMEC).
The IGFA was signed on February 13, during the Prime Minister's visit to the UAE, according to a government statement after the cabinet announcement.
The IGFA aims to enhance bilateral relations and to further strengthen the relations between the two countries in the Ports, Maritime, and Logistics sectors.
During the G20 Summit in New Delhi in September 2023 India, United States (US), United Arab Emirates (UAE), Saudi Arabia, France, Germany, Italy and the European Union signed an MoU to establish the IMEC.
The IMEC is a proposed ship-to-rail transit network that was first touted on the sidelines of last year's G20 summit in New Delhi.
Saudi Arabia has already committed to investing $20 billion (€18.4 billion) in IMEC, much of it on the rail network.
The original plan was for the trade route to extend from India across the Arabian Sea to the UAE, continuing through Saudi Arabia, Jordan and Israel on to Europe.
Back in November 2023, the Kingdom of Saudi Arabia’s Council of Ministers approved the memorandum of understanding (MoU) regarding the principles of the IMEC.
IMEC aims to connect goods, energy and data from India to Europe via the Middle East through rail and sea networks, pipelines and cables. One of the key parts is expected to be a rail network that would connect the UAE, Saudi Arabia, Jordan and Israel.
The corridor will consist of two distinct sections: the East corridor connecting India to West Asia/Middle East and the Northern corridor connecting West Asia/Middle East to Europe.
The rail line will enhance cross-border ship-to-rail transit networks, providing a reliable and cost-effective solution for goods and services transhipment between South East Asia, India, and West Asia/Middle East Europe.
However, the Israel-Hamas war has halted progress on IMEC, as have attacks on vessels in the Red Sea by Houthi rebels. The project's future is now somewhat uncertain and is now tied to how the Israel-Hamas war develops, given the level of cooperation the project would require between Israel and its Arab neighbors.
One of the selling points of IMEC is that it would help promote economic integration and partnership within the Middle East, connecting as it would the countries of the UAE, Saudi Arabia, Jordan and Israel.
However, such a vision depends on peace in the region.
US President Joe Biden even suggested back in October that part of the reason why Hamas attacked Israel on October 7 was that they wanted to disrupt efforts made at "regional integration for Israel," with IMEC being one obvious recent example he had given very public backing to.
The IMEC would not travel through the Red Sea but its maritime route from India would go through the Strait of Hormuz, a highly sensitive chokepoint vulnerable to Iranian influence.
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