Israel as India’s Pivot in the IMEC

Abstract

India’s policy on the Middle East has broadly been bilateral and in the process, it had to strike a fine balance in furthering relations with countries that are rivals. Its “Look West” policy, introduced in 2005, made some inroads in the Middle East, enlarging its economic and strategic footprints. In recent years, it has stepped up its engagements through minilateral and multilateral frameworks by joining India, Israel, the United States, and the United Arab Emirates (UAE) (I2U2) grouping and jointly launching the India-Middle East-Europe Economic Corridor (IMEC). The I2U2 was launched in 2020 for expansive economic cooperation in vital areas of water, energy, transportation, space, health, and food security. It was catalyzed in the backdrop of the Abraham Accords. In September 2023, during the G20 summit in New Delhi, seven countries, namely, India, Saudi Arabia, the UAE, France, Germany, Italy, the United States, and the European Union (EU), signed a Memorandum of Understanding for the IMEC. The October 7, 2023 attack on Israel and its attendant consequences have threatened to derail this multilateral cooperation, but India and other signatories have remained steadfast in their commitment to IMEC, raising hope for its future.

Keywords

Arab Countries I2U2 India Israel IMEC infrastructure connectivity Hamas Palestine

Introduction

The Middle East, at the crossroads of Asia, Africa, and Europe, has played a pivotal role in the civilizational interfaces leading to the exchange of knowledge systems, cultural commingling, and global movements of goods and people. Unsurprisingly, the earliest transcontinental trade routes passed through the Middle East through interconnected road and sea routes that linked countries in Asia, the Middle East, and Europe (Torr, 2021). They were formally established during the Han dynasty in China in 138 bce but were metaphorically referred to as the Silk Road by German geographer and traveler Ferdinand von Richthofen in 1877 ce (UNESCO, n.d.). The 4,000-mile-long Silk Road stretched across territories controlled by several empires, kingdoms, and city-states and endured challenges of political instability, rivalry, uncertainty across borders, and trade policy changes (Vichare, 2024). The thriving of these routes for nearly 1,400 years despite these challenges is a pointer to the transcending nature of human economic needs and the quest for material and intellectual exchange. Thus, forging connectivity is more than a tool, it is an impulse (Khanna, 2016). The rise of maritime trade consequent to the invention of steam engines and the shifting of production centers to Europe brought about the decline of the ancient trading routes.

The re-emergence of the Silk Road in the twenty-first-century international affairs lexicon is attributed to the 2013 launch of China’s Belt and Road Initiative (BRI), a massive transcontinental connectivity project (Chan, 2018). However, there have been several transnational and transcontinental projects in North America (the 3,075 km Pacific Rail, 1863–1869), Eurasia (Trans-Siberian railways, 1891–1916), and Europe (the Eurasian Land Bridge). On the contrary, the transregional connectivity in the Middle East were disrupted due to wars and conflicts, like the Hejaz railways that connected Damascus to Mecca, Baghdad Railway (1903–1940), or the Trans-Arabian oil pipeline that connected Saudi Arabia to Lebanon (1950–1976). Due to geopolitical conflicts and consequent border controls, the Middle East became one of the most geographically fragmented regions in the world (Malik, 2011). For several countries, like Tunisia, Jordan, or Israel, it is easier to trade with Europe than with their immediate neighbors.

Since the turn of the century, some regional connectivity projects have been in different planning and implementation stages. The Gulf Cooperation Council (GCC) states mooted the GCC railways in an ambitious move in 2009 to connect the urban centers of the six GCC states through a 2,177 km railway network (Gibbon, 2023). In the 25th meeting of the GCC Ministers of Transport and Communications, hosted by Oman in 2024, the budget for the GCC Rail Authority was ratified, and three significant regulations, namely, the GCC administrative regulation, financial and accounting regulation, and the procurement and storage regulation, received unanimous approval (Rose, 2024). Other cross-border projects, like the Hejaz railways and Jordan-Iraq oil pipeline modernization, are being implemented.

A decade of BRI led to investment in 15 Middle Eastern countries in about 266 projects ranging from physical infrastructure, digital connectivity, industrial parks, energy projects, and special economic zones (Chaziza, 2023). Of these, only about 24% of the projects are investments in physical infrastructure, contrary to the original idea of promoting transcontinental connectivity (Chaziza, 2023). The GCC countries have all aligned their national vision plans to BRI and look forward to partnering with China for infrastructural and digital connectivity. The transnational transport corridors are also the springboards of strategic competition between the USA and China. To counter the Chinese economic footprints in the Middle East, the USA is supporting alternative connectivity projects (Khan, 2023). Yet, other contesting proposals from countries like Türkiye and Iraq (like the Iraq Development Project) seek to consolidate their position as a transit point between Asia and Europe (Ali-Khan, 2024).

Over the years, India has increased its footprint in global infrastructure connectivity projects. The multi-modal International North-South Transport Corridor (INSTC), which links India with Russia through Iran, successfully transports cargoes (Zakharov, 2023). India has embarked on several cross-border connectivity projects with its neighboring countries, like the Kaladan Multi-Modal Transit Transport Project (Myanmar), India-Bangladesh Friendship Pipeline (IBFP) for high-speed diesel transport, and electricity grid connectivity with Bhutan, Nepal, Bangladesh, and Sri Lanka (Fruman, 2023). The India-Middle East-Europe Economic Corridor (IMEC) was mooted in September 2023 during the G20 summit in New Delhi. India, along with Saudi Arabia, the United Arab Emirates (UAE), France, Germany, Italy, the USA, and the European Union, signed a Memorandum of Understanding (MoU) for IMEC. Though not a signatory to the MoU, both Israel and Jordan are noted as transit points for the IMEC (MEA, India, 2023). Though the exact route of IMEC is yet to be identified, Israel’s Haifa Port is projected as a crucial transit point, bypassing the congested Suez Canal and the geopolitical risks in the Red Sea. Notably, Saudi Arabia, which does not have formal diplomatic relations with Israel, did not object to the inclusion of Israel as a nodal point.

The October 7 attack by Hamas and other militant organizations based in the Gaza Strip on Israel and the consequent war has threatened to derail the IMEC. Given that IMEC would require significant long-term investments to provide transcontinental multi-modal connectivity besides enormous commercial and technical cooperation to enable seamless transit, it is difficult to suggest if it can function in an unsafe and unstable environment. Nonetheless, the signatories of the MoU have remained steadfast in their commitment to the connectivity project, which is an encouraging sign. This article examines the possibilities of IMEC and what Israel would mean for India as the pivot for IMEC.

Global Supply Chains and Transport Corridors

Supply chains and connectivity have become the predominant organizing principle in most parts of the world in the twenty-first century. Supply chains are ecosystems of producers, distributors, and vendors that transform raw materials into goods and services deliverable to people worldwide. Standardizing shipping containers led to a seamless multi-modal cargo transfer through trucks, trains, and ships, making long-distance shipment cheaper and more efficient (Levinson, 2006). Transport corridors are important in transferring goods and services across continents from production centers to distribution hubs and consumption markets. Transport routes like the Suez Canal have been typically assessed regarding cost and time benefits. However, the transport corridor projects mooted in recent decades are usually transport networks or multi-modal projects valued for their impact on economic welfare, social inclusion, distributive effect, and environmental impact (Roberts et al., 2018).

The transport corridors link the major gateway cities with airports and seaports to their hinterlands and regional distribution centers. They have the capacity for regional development and integration. The North American economy is structured on regional supply chains boosted by efficient intermodal transport networks (combining rail, road, and maritime) and trade agreements between the USA, Mexico, and Canada (Rodrigue, 2024). Several more ambitious transnational and transcontinental transport corridors have brought undeniable benefits to participating countries. The dual highway-railway Ôresund Bridge brought two cities of Denmark and Sweden (Copenhagen and Malmö) so close that they are now jointly referred to as ‘Komo’ (Knowles, 2006). Transport corridors can become economic corridors and improve the region’s capacity for conflict governance through a development approach, by connecting at-risk populations and promoting social cohesion.

The global supply chains have been witnessing disruptions due to geopolitical threats and realignment due to technological changes and climatic considerations. Currently, the Suez Canal offers the shortest and fastest route between Asia and Europe and transits 12% of global trade (Brigham, 2021). It is one of the busiest sea trade routes and has experienced congestion and disruptions in recent years. Shipping in the Red Sea has been disrupted due to frequent Houthi attacks, and some container ships have opted for longer routes around Africa. Between October 2023 and May 2024, there have been about 60 reported Houthi attacks on commercial and military ships in the Red Sea (Blair, 2024). In March 2021, a stuck container ship, Ever Given, caused a massive logjam for nearly a week in the Suez Canal, stranding an estimated $9.6 billion worth of goods (Safi & Henley, 2021). The shipping cost across the Suez Canal has increased due to heightened risk due to Houthi attacks, and the composite index for containerships increased to $5,117 per 40 ft container in June 2024 compared to the average rates of $1,420 in 2019 (Howard, 2024). About 40% of Asia-Europe trade and 95% of the ships traveling between them pass through the Red Sea (Congressional Research Service, 2024). Thus, IMEC has greater relevance for the Asia-Europe trade.

The push for alternative routes was often from geopolitical conflicts rather than the economics of them. The aim is to deploy them as alternatives in case of need rather than completely substitute them. The war in Ukraine and consequent sanctions on Russia prompted greater use of the Middle Corridor and the INSTC. The Middle Corridor was originally envisaged by Türkiye in 2000, and despite building ports, rail, and road infrastructure throughout Central Asia and the Caucasus region, the first train from Türkiye to China ran in 2020. It has been the shortest route from East Asia to Europe compared to the Northern Corridor through Russia and the Suez Canal; yet the usage of the Middle Corridor remained low, with 530,000 tons in 2021 (Chang, 2023). Since the Ukraine war, European countries have wanted to bypass Russian territory, and the cargo transit through the Middle Corridor increased to about 1.5 million tons in 2022 (Dušek, 2023). However, trade traffic along the Middle Corridor was only 4–5% of the total China-EU trade due to several cross-border transshipment operational inefficiencies and delays (World Bank, 2023).

The Middle Corridor faces several challenges of week-long delays due to rough winter conditions in the Caspian Sea, inefficient intermodal transfer services along its routes, and eruption of civil and bilateral conflicts like the 3-week unrest in Kazakhstan in 2022 (Chang, 2023). Nevertheless, China and European countries have invested substantially in the project as an alternative to the Russian territory and the Suez Canal (Stoll, 2024). The Northern Corridor, which includes the Trans-Siberian land bridge through Russia and the New Eurasian Land Bridge, is more favored, even though it takes 20 days, because the supply chain adds large cargo volumes from big Russian and Belarusian industrial and population centers that usually offset extra costs (Chang, 2023). The Eurasian continental land bridge got a boost under China’s BRI.

Imperatives of IMEC

The IMEC has been mooted for several reasons, including as a cost-effective alternative to the congested Suez Canal, a strategic alternative to China’s BRI, as a means to consolidate India’s engagement with the Middle East, Europe, and the USA (Palit, 2023), and finally, to integrate Israel further into the region (The White House, 2023). The route comprises two main corridors: the Eastern Corridor, which connects India with the Arabian Gulf, and the Northern Corridor, which connects the Arabian Gulf with Europe. For India, in the last fiscal year, the Red Sea route accounted for 50% of its exports and 30% of its imports (The Economic Times, 2024). The alternative route to Europe would be through road and rail connectivity in the Arabian Gulf. The Dubai-Haifa land corridor has been established since December 2023, connecting Jebel Ali (UAE) and Haifa (Israel) by road through Saudi Arabia and Jordan (The New Arab, 2024; Wrobel, 2023). About 10 trucks operated by shipping companies in the UAE (PureTrans) and Israel (Trucknet) completed the journey in the trial phase. A comparison of the “Land Corridor” versus the Suez Canal route in terms of time and cost for transporting a 40-foot container carrying 29 tons (26,300 kg) is given in Table 1.

Table 1.

Average Cargo Transport Time and Cost along Existing and Alternative Routes between India and Europe ($ per 40 ft container; FRI*).

Country	Land Corridor Estimates (Alternative Route)	Sea Route through Suez Canal (Existing Route)
Country	Land Corridor Estimates (Alternative Route)	Freight Rates $/per 40 ft Container For Cheapest and Quickest Transit	Time (Days) For Cheapest and Quickest Transit
India (Mumbai) to Dubai (by Sea)		$2,305$2,969	24–2818–21
India (Mumbai) to Munich (Germany)		$4,211$5,080	50–5840–48
UAE (Dubai) to Haifa	By roadFRI 5,971Time 7 days	FRI 2,903	27.5
Saudi Arabia (Riyadh) to Haifa	By roadFRI 4,423Time 5.4 days	FRI 3,511	20.05
Jordan (Amman) to Haifa	By roadFRI 717Time days 2.4	By roadFRI 717	2.4
Israel (Haifa) to Piraeus (Greece)	By seaFRI 1,705Time 8.3 days	FRI 1,705	8.3

Source: Estimates from Freightos and https://www.cargorouter.com/

Notes: The given estimates were recorded in September and October 2024 and can vary with time. They are only indicative of trends in relative time and cost of transit. *Freight Rate Index are benchmark freight rates and serve as indicators of freight cost (not the actual cost which can vary with time and local conditions). They are only indicative of trends in relative time and cost of transit along different routes and modes of transit. FRI was used when accurate estimates were not available from the Freightos calculator.

Accordingly, the road transit from the UAE to Haifa would take about 7 days (Table 1). The transit time from India to Piraeus through the land corridor is said to be reduced by 5–6 transit days (Khatri, 2023). The countries in the Middle East would reap a greater advantage in reducing the transit time through the “Land Corridor”. The GCC railways network project has connected all seven emirates in the UAE. Fujairah is linked to the Saudi border at Ghuweifat through Etihad Railways, which can carry freight and passengers (Gibbon, 2023). The rail link to Riyadh is still under development. The North-South railway line in Saudi Arabia passes through Hail, a major city in the North, and Buraidah (a major city in Al-Qassim Province) and connects with Dammam, a major port city in the Eastern Province. Another rail and road project (Land Bridge Project), a part of Vision 2030, seeks to connect the East and the West coast and connect with the North-South railway and passes through Riyadh (Saudi Arabia Railways, 2022). Thus, Riyadh would be the railway junction for East-West and North-South connectivity. The North-South railway line also connects Riyadh with Al-Haditha (near the Jordanian border).

In Jordan, the North-South axis connects the port of Aqaba to the northern city of Mafraq. The UAE has signed an agreement to establish rail links between the port of Aqaba and the phosphate mines in Jordan (Global Railway Review, 2024). The railway connections to the East and West are less developed, and the Jordan-Israel rail link is currently missing. There have been talks to rebuild the historical Hejaz railways in Jordan. Israel has a freight railway connection from Bet Shean (near the border with Jordan) to Haifa (Ahuja, 2023). Thus, in most Middle Eastern parts of the IMEC, railway networks already exist or are in the implementation stage. The ongoing railway network construction can easily be standardized to facilitate efficient transit across borders and routes without changing gauges or transfers.

In Europe, most countries are well connected by a standard gauge railway that allows seamless connectivity across countries. In Europe, there could be multiple entry points: Piraeus in Greece, Milan in Italy, or Marseille in France (Rizzi, 2024). Piraeus is one of the busiest ports in the Mediterranean Sea. There is missing rail connectivity from Piraeus to Stara Zagora rail yard or to Sofia intermodal terminal (Bulgaria), which is well connected along the Istanbul-Bulgaria-Bucharest route. Bucharest has an intermodal terminal and is a strong industrial hub in Eastern Europe, with strong trade links with India and the Middle East. There is continuous rail connectivity via Budapest (Hungary), a key logistic center connecting Western Europe to Munich (Germany) (Table 2).

Table 2.

Benchmark Freight Rates and Time Estimates of Existing Cargo Routes in Europe.

	Greece (Piraeus)	Bulgaria (Stara Zagora or Sofia)	Romania (Bucharest)	Hungary (Budapest)	Germany (Munich)
Greece (Pareaus)		By roadFRI 1,888Time 3.4 days	By seaFRI 2,017Time: 8–9 daysBy roadFRI 2,582Time 3.8 days	By seaFRI 2,725Time 10 daysBy roadFRI 3,599Time 4.7 daysBy railFRI 4,036Time 11 days	By seaFRI 3,730Time 19.45By roadFRI 4,516Time 5.5 daysBy railFRI 4,528Time 13 days
Bulgaria (Stara Zagora or Sofia)	By roadFRI 1,888Time 3.4 days		By roadFRI 1,235Time 2.8 daysBy railFRI 2,155Time 8.8 days	By roadFRI 2,240Time 3.6 daysBy rail 2,501Time 9.8 days	By roadFRI 3,976Time 5.3 daysBy railFRI 2,933Time 10.8 days
Romania (Bucharest)	By seaFRI 2,017Time: 8–9 daysBy roadFRI 2,582Time 3.8 days	By roadFRI 1,235Time 2.8 daysBy railFRI 2,155Time 8.8 days		By roadFRI 2,277Time 3.6 daysBy railFRI 2,499Time 9.8 days	By roadFRI 3,757Time 4.8 daysBy railFRI 2,986Time 10.8 days
Hungary (Budapest)	By seaFRI 2,725Time 10 daysBy roadFRI 3,599Time 4.7 daysBy railFRI 4,036Time 11 days	By roadFRI 2,240Time 3.6 daysBy railFRI 2,501Time 9.8 days	By roadFRI 2,277Time 3.6 daysBy railFRI 2,499Time 9.8 days		By roadFRI 2,039Time 3.4 daysBy railFRI 2,455Time 9.8 days
Germany (Munich)	By seaFRI 3,730Time 19.45By roadFRI 4,516Time 5.5 daysBy railFRI 4,528Time 13 days	By roadFRI 3,976Time 5.3 daysBy railFRI 2,933Time 10.8 days	By roadFRI 3,757Time 4.8 daysBy railFRI 2,986Time 10.8 days	By roadFRI 2,039Time 3.4 daysBy railFRI 2,455Time 9.8 days

Source: Estimates from https://www.cargorouter.com/ as in September 2024 and can vary with time.

Note: *Freight Rate Index (FRI) are benchmark freight rates and serve as indicators of freight cost (not the actual cost which can vary with time and local conditions). They are only indicative of trends in relative time and cost of transit along different routes and modes of transit.

Munich is a major industrial center with extensive global trade and can add volumes to traffic along IMEC. It takes about 5.5 days from Piraeus to Munich by road and about 13 days by rail compared to 19.45 days by sea (Table 2). Some supply chains prefer speedy transport over economical ones. The new Eurasian Continental Bridge Economic Corridor used the existing railway links; the Chongqing Duisburg block train runs between six countries: Germany, Poland, Belarus, Russia, Kazakhstan, and China (China Daily, 2020). The rail transport was more expensive per unit container, but it took less than half the time by sea and was extensively used by the automobile and electronic firms to become Germany’s most profitable route by 2017 (Pomfret, 2018). Similarly, road transport is faster than rail transport. The rail routes from Greece or Bulgaria to Munich take almost double the time by road, yet large cargo volumes can potentially often offset costs, as seen in the case of the bulk cargo transiting the longer Northern Corridor through Russia. Thus, IMEC derives its rationale for offering a route that can decongest the Suez Canal traffic, provide an alternative in case of heightened risk at the Red Sea, and emerge as the fastest route for industries that prefer speedy delivery over the cheapest routes.

Israel as Pivot to IMEC: Navigating the Palestinian Question

As discussed above, the fastest route to Europe for Jordan, Palestine, and countries in the Arabian Peninsula would be through Haifa port. Goods from Jordan could be trucked from Amman to Haifa to be shipped further. The Israeli route is cheaper for Palestinian exports to Europe, and even the delays at crossing do not eliminate the comparative advantage (von Allmen, 2008). The fastest route is important for several perishable agricultural goods, intermediate goods in electronics and automobile industries, and critical goods such as pharmaceuticals, medical supplies, and fuel.

The European quest to reduce its energy dependency on Russia and find alternative supplies has been compelling. The West-bound trade constituted about four-fifths of the Trans-Caspian trade through the Middle Corridor, mostly energy exports from Kazakhstan (World Bank, 2023). Significant oil and gas resources have been estimated to be found in Israel, the Gaza Strip, and the West Bank (Area C) (UNCTAD, 2019). Cooperation between all stakeholders can best exploit offshore and onshore oil and gas resources that straddle across boundaries.

The unresolved Israeli-Palestinian conflict and the ongoing war in the Gaza Strip have cast a dark shadow on the prospects of IMEC. The Arab countries, which have established diplomatic relations with Israel, face a dilemma in furthering any commercial relations with Israel in the face of the massive destruction in the Gaza Strip and displacement of the Palestinians. The Arab boycott was the most critical non-military dimension of the Arab-Israeli conflict and was institutionalized through the Arab League with the Central Boycott Office in Damascus and representative offices in all Arab capitals (Kumaraswamy, 2023). The boycott was both political and economic that sought to isolate Israeli businesses, especially those in the Palestinian territories. Nevertheless, shortly after the Abraham Accords in 2020, the UAE signed a Comprehensive Economic Partnership Agreement with Israel in May 2022 to enhance bilateral trade to more than $10 billion in 5 years (WAM, 2023).

The October 7 attack and the consequent war with Hamas in the Gaza Strip have brought the Palestinian issue to the fore. The reconstruction of the Gaza Strip would call for international attention and efforts, even if the political solution remains elusive. The Palestinian territories comprising the West Bank and the Gaza Strip are a resource-poor economy with a trade deficit of about 40% of GDP (2015), one of the highest in the world (World Bank, 2008). Most of its trade has been with Israel (Table 3) and through Israeli sea and air routes. Thus, the economic boycott of Israel had also harmed the Palestinians.

Table 3.

Palestinian Trade, 2019–2022.

	2019	2020	2021	2022
Exports to Israel (million $)	898	886	1,170	1,300
Share of Israel in total exports (%)	77.5	77.1	80.9	80.6
Imports from Israel (million $)	3,580	3,280	4,070	4,600
Share of Israel in total imports (%)	62	61.5	59.8	56.6
Total Palestinian trade (million $)	6,930	6,490	8,260 (9,187.3)	9,710 (10,613.8)

Source: Observatory of Economic Complexity, https://oec.world/en/profile/country/pse

Note: The figures in the bracket are from the Palestinian Central Bureau of Statistics, https://www.pcbs.gov.ps/statisticsIndicatorsTables.aspx?lang=en&table_id=2399 that does not include trade from East Jerusalem.

The only direct land link between the Palestinian economy to Arab countries is the Allenby/King Hussein Bridge linking the West Bank with Jordan. The Palestinian exports must be loaded onto Jordanian trucks in back-to-back goods transfers on shipping pallets (containers are banned) adding significant costs and delays to the exports (World Bank, n.d.). The Palestinian imports more than the exports and are subject to a back-to-back system for greater scrutiny in Israel (World Bank, n.d.).

Since the Hamas takeover of the Gaza Strip in 2007, Israel and Egypt have placed security restrictions, making difficult the movements of goods to and from the Strip. The only crossing from the Gaza Strip into Israel is the Kerem Shalom/Kerem Abu Salem crossing, and into Egypt is the Rafah crossing. The share of the Gaza Strip in Palestinian exports has been insignificant at about $32 million in 2022 (Palestinian Central Bureau of Statistics, n.d.). Thus, the predominance of Palestinian trade with Israel and through Israeli airports and seaports also implies that the reluctance of the Arab countries to trade with Israel would have a detrimental effect on the Palestinian economy. In other words, the Gaza reconstruction and rehabilitation of the Palestinian economy would be practically difficult without the cooperation of Israel.

IMEC and Gaza Reconstruction

Linking IMEC with Gaza reconstruction breaks the dilemma the regional players would have in engaging Israel. If one looks closely, the economic flows have defied political roadblocks. Commodities in demand have flown like Aladdin’s magic carpet to their consumers despite economic embargoes. Rivals have entered into commercial agreements in their innovative ways like the Israel-Lebanon delimitation Agreement in 2022 that laid to rest their intense boundary dispute to establish a permanent common maritime boundary in the East Mediterranean Sea (Fakhry, 2023). Thus, commercial cooperation is impulses of Homo sapiens that are driven by necessity and opportunity.

The Tabe Agreement (or Oslo II Accords), signed in September 1995, gave the Palestinian National Authority (PNA) maritime jurisdiction over territorial waters of 20 nautical miles from the coast. The PNA signed a 25-year contract with BGG for gas exploration in Gaza Marine in 1999, and the latter discovered a large gas field and drilled two wells in 2000. In July 2000, Prime Minister Ehud Barak granted security authorization to drill the first well (UNCTAD, 2019). The negotiations between the PA, BGG, and the Israeli government were moving within the framework of the Oslo Accords until the outbreak of the Al-Aqsa Intifada in September (UNCTAD, 2019). There were some efforts toward the renewal of negotiation, but with the takeover of the Gaza Strip by Hamas in 2007, the PNA lost its control over the negotiations, and Israel stalled all progress to prevent Hamas from filling its coffers (Boersma & Sachs, 2015).

Though Israel has not laid legal claims over Gaza Marine, its approval was sought by all parties negotiating the deal (Rettig & Spanier, 2024). In 2022, the European Union signed an MoU with Israel and Egypt to export natural gas from Israel via Egypt to Europe (Youssef, 2023). In June 2023, Israeli Prime Minister Benjamin Netanyahu announced a preliminary approval for the development of Gaza Marine. The Israeli approval for exploration seems to have been encouraged by the Israel-Lebanon Maritime Agreement, 2022, the establishment of EastMed Gas Forum, with Israel, Palestinian Authority, and Egypt as members, and Egypt willing to fund the gas field development (Youssef, 2023). The profitable joint exploitation of oil and gas resources to serve the European market in ways that also aid in the reconstruction of the Gaza Strip can be explored as part of IMEC.

The Palestinian trade with Israel since the signing of the Abraham Accords has increased at a greater pace between 2020 and 2022 (Table 3), even though political tensions between the two have been increasing. Its overall trade has also increased by nearly 50% between 2020 and 2022 from $6.5 billion to $9.7 billion, illustrative of the economic benefits from normalization relations with Israel by the UAE and Bahrain. The increasing demand for Israeli goods in the region has driven the Palestinian trade with Israel. The Palestinian exports mostly comprise building stones, fruits and nuts, olive oil, glazed ceramics and services. Just as with the increasing demand for IT professionals in Israel, the Arab tech community grew rapidly in 2008–2018 (Fanadka, 2018). Palestinians have among the highest levels of educated unemployment and can be redressed through more trade-driven employment opportunities in knowledge-intensive sectors such as pharmaceutical and chemical.

IMEC can potentially represent international and regional efforts toward reconstructing the Gaza Strip in ways that restore confidence in peaceful and mutually beneficial coexistence. IMEC, as a multi-modal transport corridor passing through several countries, requires seamless transfer of goods across borders. In order to improve operational efficiency of across borders, international operators would be required that could operate the cargo from origin to destination, digitize data flows and processes across borders, and cater to the security concerns of countries using AI, GPS, and blockchain technologies (World Bank, 2023).

India’s acquisition of Haifa port in 2022 provides a vantage point in the entire scheme of IMEC. Adani Ports and Special Economic Zone Ltd. collaborated to acquire Haifa port for about $1.8 billion (Ahuja, 2023). It added a crucial chapter in India’s strategic and commercial presence in the Middle East trajectory. It also provides a crucial theater for its development diplomacy and positions India to contribute significantly to increasing Palestinian trade through connectivity infrastructure and investments. Israel has been open to improving economic conditions in the Gaza Strip with the help of Qatar in ways that satisfy its security concerns of not funding Hamas (Ravid, 2024).

India can potentially deploy its development diplomacy through aid, investments, and high-impact projects to boost Palestinian trade through Haifa or Jordan with the Arab Gulf countries. India has successfully moved beyond the bilateral paradigm in its engagement with the Middle East through the I2U2 initiative. Its major trade and commercial partners, the UAE and Saudi Arabia, are investing in Jordan’s connectivity projects. Despite the ongoing war in Gaza, the Israeli and the UAE logistics companies undertaking trial runs through the Land Corridor in the Arabian Gulf, indicate sustained interest in IMEC. India can have a significant role in boosting the Palestinian economy and making its diplomacy move beyond balancing and de-hyphenation to mediation and strengthening of multilateral collaboration.

Conclusion

The Middle East had the earliest transcontinental routes passing through it but since the last century, remained one of the most geographically fragmented regions with border controls and closure. The global supply chains have organized themselves along different transport corridors and routes, some of which gained importance during geopolitical conflicts. During the G20 Summit in New Delhi in 2023, IMEC had been mooted as an alternative to the congested and often risky Suez Canal route and an economic corridor to boost regional trade and prosperity with Israel as a transit point. IMEC can reduce transit time for Middle East countries through the Land Bridge, and most of the railway connections are either in the implementation or planning phase, which can be standardized for seamless connectivity. The European corridor is mostly connected with speedy roads and railways.

The ongoing war in the Gaza Strip has cast a shadow over IMEC—the Palestinian trade is predominantly with Israel or through Israeli air and sea ports. Hence, the economic boycott of Israel has also adversely affected the Palestinian economy. The significant increase in Palestinian trade with Israel after the Abraham Accords presents a promising case for IMEC to facilitate the reconstruction of Gaza. India’s acquisition of Haifa port in 2022 provides a vantage point in IMEC. The exploration of oil and gas resources in the Gaza Marine and the Palestinian trade can be boosted through IMEC, and India can play a significant role in the multilateral paradigm with its major commercial and regional partners. If Israel pivots to IMEC, the Palestinian cause is the torque that spins the economic corridor and mobilizes international and regional collaboration. IMEC may not provide a political solution to the Israeli-Palestinian conflict, but it could pave the way for a more accommodative posturing of communities and nations.

Footnotes

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Sameena Hameed

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