March 2024

War clouds over cross-continent corridor

Escalating US-Iran tensions and the ongoing Israel-Hamas conflict may impact the ambitious India-Middle East-Europe economic corridor, warns Amit Agnihotri

Increasing tensions between the US and Iran over Houthi attacks in the Red Sea are a pointer that the Israel-Hamas conflict in Gaza has expanded in the volatile West Asian region and can further cloud the ambitious India-Middle East-Europe Economic Corridor (IMEC). 

The project was launched in September 2023 during the G20 Summit in New Delhias the West’s counter to China’s Belt and Road Initiative (BRI). But the participating nations – including France, Germany, India, Italy, Saudi Arabia, the UAE, and the US – have not been able to meet and discuss a future roadmap formally since then, due to the war in Gaza. 

The IMEC is expected to stimulate economic development through enhanced connectivity and economic integration between Asia, the Arabian Gulf and Europe. The proposed corridor aims to provide reliable and secure regional supply chains, better trade accessibility, and trade facilitation to the member nations.

While the root cause of US-Iran tensions is not new, as is the case with the decades-old Israel-Palestinian conflict, last year’s October 7 Hamas attack on the Jewish nation triggered the worstever conflict between the two warring neighbours. 

Unfortunately, the international community has not been able to enforce a ceasefire so far. As a result, the conflict has expanded to other parts of the volatile West Asian region and is manifesting through rising antagonism between the US and Iran, not only in the Red Sea but also in parts of Iraq, Jordan, Yemen and Syria.

Map showing IMEC route
Map showing the route of IMEC, which was launched in Sept. 2023 during the G20 Summit in New Delhi

US forces have struck at Iran-backed Houthis, who have been targeting commercial ships passing through the Red Sea. But the suicide drone attack on a US military base in Jordan, in which three American soldiers were killed, led to more severe retaliation from Washington, which attacked 85 targets of Iran-backed militias in Iraq and Syria to send a strong message to Iran. 

Tehran, which had been upset over heavy Palestinian casualties in the Gaza war and over the US fully backing Israel, has for now activated its proxies operating in parts of Iraq, Jordan, Syria and Yemen to target US military assets in the region. 

If the situation gets out of hand, the Red Sea confrontation could lead to a bigger US-Iran war. Either way, the Houthi attacks could keep West Asia on the boil and affect any progress on the IMEC. 

The Inda-Middle East-Europe Corridor is the West’s counter to China’s Belt and Road Initiative

US President Joe Biden had earlier expressed his suspicion when he noted that the Gaza conflict was actually triggered to stall the ambitious cross-continent infrastructure project.

A look at the recent turn of events shows that Iran’s latest aggression is a clear warning signal to Arab nations the United Arab Emirates and Bahrain, which have been trying to boost economic and military relations with Israel as part of the US-brokered Abraham Accords, signed in 2020.

Iran fancies itself as a champion of the Islamic nations and sees the Gaza conflict as an opportunity to flex its muscles in West Asia.

The country’s aggressive stance is also intended to send a message to the Sunnis and Kurds in northern Iraq, who want US forces to remain stationed in Baghdad against the wishes of the Shias. Iran flexing its muscles in the Red Sea will also help the Islamist nation deflect global attention from its secretive nuclear weapons program, which has been a bone of contention between Washington and Tehran for decades.

In 2015, Iran joined an international nuclear deal, known as the Joint Comprehensive Plan of Action. However, former US President Donald Trump unilaterally pulled out of the pact in 2018. Joe Biden has been trying to revive the deal but in vain.

Tehran has activated its proxies in parts of Iraq, Jordan, Syria and Yemen to target US military assets in the region

American ally Israe has also long been concerned over Iran’s nuclear weapons ambitions and has threatened military action if diplomacy failed to work on Tehran.For this reason, the US took it upon itself to confront the Houthis as they attacked commercial ships passing through the Red Sea as Israel was totally involved in the Gaza conflict.

Moreover, the US has been concerned over global arch-rival China getting a foothold in the West Asian region with the signing of the Beijing-Tehran 25-year trade deal in 2021.

Further, Beijing’s attempts to broker peace between Iran and American ally Saudi Arabia has also worried Washington. Yet the US has urged China to use its influence on Iran to control the Houthis.

Despite this fraught situation, with war clouds hovering over West Asia andthreatening to impact the IMEC, there are still some rays of hope for the project.

On January 26 this year, Indian Prime Minister Narendra Modi and French President Emanuel Macron noted that the IMEC was of great strategic importance and would significantly enhance the potential and resilience of the flow of commerce and energy between India, West Asia and Europe. Modi has welcomed the appointment of President Macron’s Special Envoy for the project, Gérard Mestrallet.

Greek PM Kyriakos Mitsotakis, (pictured with Narendra Modi) noted that peace and stability in West Asia was a necessary condition for IMEC’s success

Both Modi and Macron also expressed grave concern over the possibility of further expansion of the Gaza conflict in the West Asian region, including in the Red Sea, which would have a significant economic impact on the world. The two leaders stressed the utmost importance of upholding freedom of navigation in the Red Sea and of respecting the international law of the sea. Furthermore, they had a detailed conversation aimed at coordinating Indian and French efforts in that region.

On February 14, India and the UAE signed an agreement on Intergovernmental Framework to look at specific measures the two nations would deploy to promote cooperation on IMEC, including logistics platforms and supply chain services which will cover all types of cargo, bulk containers and liquid bulk. The pact also aims to see how quickly the connectivity project can be operated and benefits the core objective of stronger, deeper and more extensive regional connectivity between the participating nations.

Then, on February 21, Greek Prime Minister Kyriakos Mitsotakis, who was visiting India, acknowledged the prospects of strengthening connectivity through IMEC but noted that peace and stability in West Asia was a necessary condition for the project’s success. Mitsotakis described Greece as India’s gateway to Europe and said that his country was keen to participate in the IMEC project.

Addressing an India-Europe business conclave in New Delhi, Indian Foreign Minister S Jaishankar expressed concerns over tensions in the Red Sea as he stressed the need for multiple connectivity corridors to boost global supply chains.

Amit Agnihotri is a Delhi-based journalist who has worked with several national newspapers and focuses on politics and policy issues