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India's economic corridor to Europe via Saudi, UAE: a win for US, West Asia

In reflection of the emerging multipolar world, Riyadh and Abu Dhabi aim to transform their bilateral relations with Washington, Brussels, and Delhi into multidimensional partnerships by joining the IMEC, with energy serving as a core pillar but not the sole one.
Saudi Arabia's Crown Prince and Prime Minister Mohammed bin Salman (L), India's Prime Minister Narendra Modi (C) and US President Joe Biden attend a session as part of the G20 Leaders' Summit at the Bharat Mandapam in New Delhi on Sept. 9, 2023.

During the G20 summit held in New Delhi on Saturday, a significant development unfolded as the United States, India, Saudi Arabia, the United Arab Emirates, France, Germany, Italy and the European Union introduced the India-Middle East-Europe Corridor, designed to stimulate economic development by fostering connectivity and economic integration between Asia, the Arabian Gulf and Europe. 

The IMEC represents a multimode transit corridor spanning over 3,000 miles and it consists of two corridors. The eastern corridor links India to the Arabian Gulf, while the northern corridor connects the Arabian Gulf to Europe. Upon its completion, as outlined in the White House’s memorandum of understanding, this connectivity project will establish a dependable and cost-effective cross-border ship-to-rail transit network. It will complement existing maritime and road transport routes, facilitating the seamless movement of goods and services between India, the UAE, Saudi Arabia, Jordan, Israel and Europe.

Opportunity for Washington

In contrast to the absence of Chinese President Xi Jinping and Russian President Vladimir Putin from the G20 summit, the Biden administration swiftly claimed victories by positioning the corridor as an alternative to China's Belt and Road Initiative (BRI), which has placed a strong emphasis on the Middle East and Mediterranean states, such as Greece and Italy. However, it's important not to perceive the IMEC merely as a rival to the BRI. Saudi Arabia and the UAE, two central pillars of the corridor, reject the idea of a bipolar world order that would compel them to choose between China and the United States or vice versa.

This reality is exemplified by their recent admission to the BRICS group of major emerging economies and active participation in the India-Middle East-Europe Corridor. Nonetheless, the IMEC offers greater autonomy for participating countries to pursue their own interests and, importantly, to safeguard their sovereignty. This distinguishes it significantly from the BRI. This represents a success for Washington, which, along with Brussels, has grappled with the challenge of presenting a viable alternative to the BRI that doesn't force partners like the Gulf and India into an either-or choice, as such a choice was highly unlikely.

More importantly, the IMEC is a manifestation of the deepening integration between India, Saudi Arabia and the UAE, and the broader geopolitical and economic convergence between the Middle East and South Asia into West Asia. India holds the distinction of being Saudi Arabia's second-largest trading partner, with bilateral trade reaching $52.75 billion during 2022-23, elevating Saudi Arabia to India's fourth-largest trading partner. Furthermore, trade between India and the UAE surged to $85 billion in 2022, positioning the UAE as India's third-largest trading partner for the year 2022-23 and its second-largest export destination. The IMEC further underscores the evolving state of Pakistan-Gulf relations, where Saudi Arabia and the UAE, longstanding allies of Islamabad, have shifted their economic and geopolitical posture toward India. This shift reflects their acknowledgement of India's rise and signifies their aspirations in the emerging multipolar world. In this new landscape, legacy relationships must be reevaluated and adapted to align with geopolitical realities and economic opportunities.

Looking for integration and beyond oil

The IMEC serves as a declaration from the United States and the EU that the Gulf states — with Saudi Arabia and the UAE at the forefront — are more than mere energy producers. It would be a strategic error to perceive them solely through that lens, as Riyadh and Abu Dhabi are actively seeking more serious partners to fulfill their economic, technological and logistical needs. This is integral to their ambitious agendas of transitioning toward diversified economies beyond their dependence on energy. For so long, Washington has maintained an energy-first posture toward the Gulf states, and the IMEC is a declaration that the bilateral relations with Saudi Arabia and the UAE are multidimensional, and energy is a core pillar but not the only pillar.

The American objective from the IMEC is to change the trajectory in the Gulf, transforming it from a dual hierarchical structure where the United States is the dominant security partner and China is the dominant economic partner by bringing India into the geopolitical and economic mix. While the United States understands that India will only partially align with Washington's interests in the Middle East and Asia more broadly, Delhi's inroads into the Middle East are unlikely to undermine US interests as China does. More importantly, Delhi's inroads into the region dilute the dual hierarchical realities of the Middle East by the mere fact of integration with Saudi Arabia and the UAE, which undermines China's economic influence in the medium and long term.

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