New India-Europe transit corridor set to challenge IMEC, Suez routes

New India-Europe transit corridor set to challenge IMEC, Suez routes
India is seeking alternative routes to connect its trade with Europe, and simultaneously bypass some of the world's unstable flashpoints / bne IntelliNews
By bne IntelliNews May 8, 2024

The battle of the corridors is heating up as India promotes a new India-Middle East-Europe Economic Corridor (IMEC) route that will connect the subcontinent with Europe by traversing the Middle East over land then sea to the EU via Haifa in Israel. An alternative has sprung up that avoids the increasingly unstable Levant and travels to Europe from India via Iraq and Turkey. And a third route of sanctioned countries will connect St Petersburg in Russia via the Middle East to India.

Geopolitical tensions and are high. Houthis are terrorising the Red Sea, which carries 40% of global seaborne traffic and a war in the South China Sea between China and the US is looming. The sea routes connecting east and west have not looked so insecure for centuries. Land routes that connect Asia and Europe are suddenly at a premium.

China has already established rail links between the two as part of its Belt and Road Initiative (BRI), but since Russia went rouge and invaded Ukraine, even those routes have become problematic.

The Caucuses have been promoting the Middle Corridor that dips below the Caspian Sea, avoids Russia completely and claim could halve transit times.

At the same time, Russia is promoting its Northern Sea Route (NSR) over the top of the country, now that global warming is clearing the ice packs out of the way and also promises to significantly shorten the time for sending goods from Europe to Asia by several weeks. While security fears dog most other sea routes, only Russia has the nuclear-powered icebreakers need to traverse this route.


India is proposing IMEC, which traverses the Middle East and avoids the Caspian and Black Sea completely. The 4,800-km-long IMEC will consist of a railway, ship-to-rail networks and other transport routes. It will be divided into two parts: the East Corridor, which will connect the Arabian Gulf to India, and the Northern Corridor, connecting the Gulf to Europe.

The original IMEC plan was a deal signed at the last G20 summit between India and the Kingdom of Saudi Arabia (KSA) and formalised with a memorandum of understanding (MoU) in September 2023. Indian goods were to be collected at the port of Mumbai and shipped to Jebel Ali in the UAE, before transported across the Kingdom of Saudi Arabia (KSA) by train to Israel, where they will be sent by ship from Haifa on their last leg to the European ports of Piraeus in Greece, Marseille in France and Messina in Italy, to enter the EU.

“It will be the most direct connection to date between India, the Arabian Gulf and Europe: with a rail link that will make trade between India and Europe 40% faster; with an electricity cable and a clean hydrogen pipeline to foster clean energy trade between Asia, the Middle East and Europe; with a high-speed data cable to link some of the most innovative digital ecosystems in the world and create business opportunities all along the way,” European Commission President Ursula von der Leyen said at a related transport event in September.

Iraq-Turkey dogleg

But since the October 7 attacks by Hamas on Israel and the rapidly deteriorating situation following Israel’s attack on the Gaza strip, this plan has had to be reworked.

Given the problems in the countries surrounding Israel are unlikely to go away quickly, an alternative is emerging where goods are landed at the top of the Persian Gulf and then transported across Iraq and Turkey to enter Europe that way.

India is keen to expand its connections to Europe by land; these are currently bottled up thanks to poor relations with Pakistan and instability in Afghanistan, which are both in the way. The Central Asian states would love to see a southern route out of their region open up as well, as currently they are forced to trade and transport across the long Russia border which shuts them in to the north, and Iran, which has similar sanctions problems, to the south.

The EU is also keen to see the route established, because if it significantly increases its trade with India via the route it will also give it new leverage in the Middle East, where currently it has limited influence.

KSA is also keen to cooperate with India. While Riyadh has been moving closer to the BRICS group led by Russia and China – it has agreed in principle to join BRICS+ – Riyadh has surprised by throwing in its lot with the Indian transport corridor proposal that has been backed by both the US and EU. Crown Prince Mohammed bin Salman (MbS) is clearly trying to improve KSA’s clout on the international stage and is following a multivector foreign policy that is popular throughout Eurasia. At the same time as improving relations with the more pro-market India, MbS is buying some political leverage in his relations with the more politically aggressive Beijing and Moscow.

A coalition involving Iraq, Turkey, Qatar and the UAE signed an MoU in February to enhance trade connectivity between India and Europe by creating a new trade corridor to rival the existing IMEC and seaborne Suez Canal routes.

Last year, Iraq launched a $17bn project to connect a major commodities port on its southern coast to the Turkish border via an expansive rail and road network. Known as the Development Road project, it will span over 1,200 kilometres and is designed to transform Iraq into a strategic transit hub linking Asia and Europe.

Sanction free north-south route

Less prominent, a third route is being discussed as sanctioned Russia and Iran try to stay in the game and create routes that are outside Western influence. The International North-South Transport Corridor (INSTC) aims to strengthen connections between India, Russia and Iran while bypassing Western-controlled trade routes. The 7,200-km corridor links St Petersburg in Russia to ports in southern Iran and ultimately to Mumbai, India.

However, the timing and funding for all the projects remain vague. The cost of upgrading and modernising ports and railways along the route is estimated to be $8bn and the work could take years. No timeline for the route has been established yet by its participants.

In the meantime, the seaborne routes continue to dominate global trade, but the land-based routes are slowly growing in attractiveness and will continue to do so as globalisation fades in the face of an increasingly fractured world.