Escalation of Israel-Hamas war could hit corridor plans
NEW DELHI : Israel’s declaration of war on Hamas in response to attacks on its territory may cloud New Delhi’s ambitious plans to build an India-Middle East-Europe economic corridor (IMEEC), Indian exporters and trade experts said. The plan to develop shipping and railway links between the three regions was announced as part of the Delhi declaration of the G20 summit in India. Fears are growing in the Indian capital that the war could drive insurance premiums and shipping costs higher as was seen on the trade routes affected by the Russia-Ukraine war last year.
This assumes further significance as Israel is India’s 11th largest trade partner with bilateral trade amounting to $12 billion. “IMEEC trade corridor is a very long- term infrastructure project. While it is still early to access the impact on the plans, if any of the (West Asian) countries joins the Hamas, then definitely the entire project will be derailed because unless every country in the region is onboard, the corridor won’t work," said Ajay Sahai, CEO of the Federation of Indian Export Organisations.
While most countries, including India, have condemned the Hamas attack, some Arab as well as non-Arab countries, notably Iran, have welcomed it. The corridor is expected to boost connectivity and infrastructure among India, the UAE, Saudi Arabia, EU, France, Italy, Germany and the US. The announcement made last month stated that linking these three regions will enable seamless flow of commerce, energy and digital communication.
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