‘By supporting IMEC, the U.S. and India can establish a compelling alternative to China’s Belt and Road Initiative’
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The United States-India relationship has evolved into an increasingly vital strategic partnership ever since the Clinton administration laid the foundation for a new direction in the 1990s. Today, broad bipartisan consensus supports building upon these ties even further, driven by converging interests in economic growth, regional security, and democratic values. As global dynamics shift, the importance of this relationship for the Trump administration becomes even more pronounced.
The India-Middle East-Europe Economic Corridor (IMEC) agreement presents a tremendous opportunity for President Donald Trump to solidify this multilateral partnership while advancing both the strategic interests of the U.S. and India. By leading the effort to secure cooperation among the participating nations, the U.S. can help create a robust economic corridor to ensure free and open trade routes, with enhanced energy security and technological innovation, which, in turn, will also benefit American companies.
More conceptual now
Announced in 2023, IMEC represents an ambitious vision to forge an integrated network spanning three vital regions through advanced physical and digital infrastructure. The corridor must develop efficient transportation routes, including railways, shipping networks, and maritime connections, while also establishing cross-border electricity and hydrogen pipelines and digital communication cables. The end goals should be to enhance trade connectivity and reduce transportation costs, while diversifying global supply chains and promoting deeper economic integration among participating countries (India, the U.S., the United Arab Emirates, Saudi Arabia, Italy, France, Germany, and the European Commission).
At the moment, it is reasonable to suggest that IMEC is more conceptual than concrete. Meeting its lofty goals requires extensive planning and cooperation. The Trump administration’s leadership on this matter could enhance his legacy on the international stage. By supporting IMEC, the U.S. and India can establish a compelling alternative to China’s Belt and Road Initiative (BRI), creating a more balanced global economic architecture that aligns with western democratic values and market principles.
IMEC was never destined to be a straightforward endeavour. Each participating nation faces a complex calculus of investment, political will and economic strategy. The corridor demands substantial infrastructure investments that directly compete with other national priorities. Moreover, private sector engagement introduces another layer of complexity. Corporate investors require clear pathways to return on investment; and without active engagement from the private sector, it is unlikely that the project could succeed.
Several countries, such as Greece and Italy, have shown substantial initiative on IMEC. France has distinguished itself by appointing a special envoy in Gérard Mestrallet, who is not a traditional diplomat. France’s President Emmanuel Macron has chosen a proven business leader from France to head this geopolitical and economic initiative, as he recognises its economic potential for France. The UAE and Saudi Arabia appreciate the role IMEC can play in advancing relationships with the West, and have spearheaded efforts for its implementation. Without regular, strategic engagement, there is a significant risk of creating an uneven economic landscape that could breed tension and political friction among participating nations. The corridor offers transformative economic opportunities not just for coastal regions and primary ports but also for inland areas that could become crucial nodes in this expansive trade network. Even within the region, we have already seen countries such as Iraq and Türkiye initiate trade agreements to compliment IMEC.
As an alternative to China’s BRI
IMEC promises substantial economic advantages for India by dramatically reducing trade costs and transforming maritime logistics. This strategic network reduces vulnerability to potential disruptions such as those that might occur in the Suez Canal, but also creates compelling opportunities for increased foreign direct investment. By positioning itself as an alternative to the BRI, the corridor allows India to strengthen diplomatic ties with West Asian and European countries.
Better for the environment
There are implications to this deal that could impact the earth’s climate health. India has emerged as a significant player in green hydrogen development, positioning itself as a potential global leader in this emerging clean energy technology. The country has launched ambitious initiatives to develop green hydrogen as a strategic component of its energy transition and decarbonisation efforts.
India is collaborating with international partners such as Germany and Japan, and developing infrastructure for green hydrogen production, storage, and transportation. This will help reduce carbon emissions, decrease dependence on fossil fuel imports and create new job opportunities in emerging green technology sectors.
The Trump administration’s role in facilitating the Abraham Accords proved instrumental in creating the diplomatic conditions that made IMEC possible. Former U.S. President Joe Biden has been a strong proponent of IMEC. Looking ahead, questions remain about IMEC’s future under potential new U.S. leadership. One intriguing factor is Mr. Trump’s warm personal relationship with Indian Prime Minister Narendra Modi. This rapport could prove significant to ongoing relations. Now that there is a peace agreement between Israel and Hamas, both leaders could facilitate the much needed (and required) meeting of IMEC participants to discuss the next steps.
This endeavour transcends traditional infrastructure development; it represents a fundamental reimagining of regional economic cooperation that requires unprecedented levels of coordination among diverse stakeholders. The U.S. and India, as key architects of the corridor, must work closely to shepherd this project to completion, recognising both its economic significance and environmental implications for all participating countries.
Sanjeev Joshipura is Executive Director of Indiaspora. Kapil Sharma is Principal at Kapstone Strategies and Non-Resident Fellow, Atlantic Council
Published – January 21, 2025 12:08 am IST