IMEC: a trade corridor derailed by geopolitics

IMEC and the New Reality of Geopolitical Risk

The unfolding military confrontation between US/Israel and Iran introduces significant Geopolitical challenges to the commercial realization of the India-Middle East-Europe Economic Corridor (IMEC). Earlier in 2023, some of the anticipated challenges evident, were namely the paramount need for security and stability in the Middle East, which hasn’t been the case.

As the US/Israel-Iran conflict deepens following Israel’s multi-pronged air operation against Iran’s infrastructure, regional security dynamics has manufactured a new phase of capriciousness. This new outlook not only threatens maritime and land-based supply chains amid Iran’s retaliations but also emerging strategic partnerships—particularly the India–UAE segment of IMEC and decoupling of Saudi-UAE partnership due to events in East Africa.  For regional policymakers and security officials, the moment calls for a sober reassessment of IMEC’s rollout pace, security safeguards, and diplomatic frameworks.

However, the sharp escalation between Iran and US/Israel jeopardizes this initial implementation phase.

Iran possesses a wide spectrum of asymmetric maritime capabilities, including naval mines, drone boats, coastal missile batteries, and sympathetic proxy actors such as the Houthis in Yemen. Tehran has repeatedly demonstrated its capacity and willingness to create chaos in maritime traffic in the Strait of Hormuz, the Bab el-Mandeb Strait, and the Gulf of Oman—choke points that directly impact the UAE’s shipping infrastructure and India’s west coast export lanes.

In the wake of Israel’s June 2025 strikes and US/Israel’s February 2026 strikes, the Iranian leadership vowed a “strategic and extended retaliation,” suggesting the likelihood of military and trade threats. A campaign targeting commercial shipping, particularly vessels associated with the GCC ports or Indian cargo, drove up insurance premiums, deter private sector investment, and delay or reroute foundational maritime flows along the IMEC corridor.

Strategic Changes Driven by Geopolitical Risk

All of this serves to erode the political feasibility of commencing IMEC operations in the current geopolitical climate, especially if India and the UAE are forced to recalibrate their maritime logistics toward alternative routes—such as via Oman or East African ports.

Background

Unveiled at the G20 Summit in September 2023 with initiations of the United States (US), the IMEC corridor was envisioned as a transformative new trade route linking India to Europe via UAE, Saudi Arabia, Jordan, and Israel. The project would serve as a counterweight to China’s Belt and Road Initiative (BRI), fostering economic connectivity and consolidating strategic trust between regional and global powers.

The India–UAE segment forms IMEC’s foundational leg, enabling maritime goods to flow westward to Gulf ports like Jebel Ali, Fujairah, and Khalifa before transitioning to overland transport across the Arabian Peninsula toward Europe.

Another view suggests, Inherently, this idea grew up in the minds of people advocating the greater Israel project as it would make Israel a key dependable piece.

UAE’s Strategic Dilemma: Growth or Deterrence

The UAE, a central IMEC player and host of world-class ports and duty-free zones, finds itself in a precarious position. On one hand, the UAE seeks to accelerate its role as a logistics, trade, and innovation hub aligned with India and Israel. On the other hand, the UAE and KSA have maintained relatively stable diplomatic and partial economic ties with Iran since their rapprochement in 2022.

The latest Iran-Israel conflict heightens the UAE’s geopolitical risk, particularly considering its proximity to potential Iranian or Houthi maritime aggression. Emirati critical infrastructure—ports, energy terminals, and airports—have come under threat from Iranian response. It is now further aggravated as Tehran interprets IMEC as part of a US-aligned strategic encirclement. The threat level increases further as, Iran views regional US-Arab allies as potential targets to pressure Washington. The February 28^th strikes could not diminish Iran’s naval, air force, and ballistic missile capabilities so as to blunt the threat.

Hence, this threat matrix overall may force the UAE to slow its IMEC commitments, at least in visible coordination with Israel, to avoid heavy retaliatory costs in future. The current war has established Iran as a global military power, which needs to be respected and not confronted directly.

Instead, the UAE may have to choose to pursue a quiet balancing strategy, advancing IMEC logistics with India while delaying explicit operationalization of the land and rail links beyond the Saudi territory.

Though, the UAE exit from OPEC suggests doubling down on its relationship with Israel. UAE leadership has remained astute, pragmatic and visionary since its establishment in 1971, however, Israel political class is known to use muddy covert leverages in its relationships and has always been an alarmingly selfish player. Opinion makers suspect of certain leverage against UAE leadership, may be forcing it to adopt an irrational strategic mistake and adopting a antagonistic approach with both of its bigger neighbours namely Iran and Saudi Arabia

Saudi Arabia and Its Complex Israeli Relationship

Saudi Arabia’s role is indispensable and the most important piece in the IMEC corridor as it hosts the land bridge connecting UAE ports with Jordan and Israel. Yet, Saudi-Israeli normalization remains incomplete because of the unresolved conflict in Gaza, and Israel maneuver with UAE in East Africa creating rift and the current Israel-Iran conflict risks freezing IMEC progress entirely.

Riyadh has no strategic interest in being pulled into a binary confrontation. If the conflict expands or becomes prolonged, KSA may condition its IMEC participation on security priority, sequencing the project in phases that prioritize intra-Arab cooperation and regional stability first – an unlikely outcome in the short-term. The defence ties with Pakistan again discourages Saudi to adopt a more independent outlook than be an active party in the IMEC.

This geopolitical fragmentation undermines IMEC’s original vision and complicates the India–UAE pipeline, as the route’s viability becomes contingent on downstream linkages that are increasingly uncertain.

India’s Strategic Options

India, a principal driver of IMEC, faces a difficult strategic calculus. As the eastern anchor of the corridor, India benefits from expanded access to Gulf and European markets, energy trade diversification, and greater geopolitical stature. 

However, India must now account for the growing regional security volatility, especially concerning maritime exposure in the Arabian Sea, its historic relationship with Iran and potential Iranian covert activity. India could explore several contingency tracks:

• Diplomatic neutrality: Avoid overtly aligning IMEC rhetoric with US or Israeli objectives to preserve working relations with Iran. Although theoretically this is a possible pathway, it is highly unlikely that India will go in this direction.
• Security partnerships: Strengthen naval and overall military cooperation with the UAE and KSA to safeguard shipping lanes and infrastructure. This pathway represents one of the benefits of IMEC, as it enhances regional integration among the involved nations, including strategic security cooperation. However, due to defence alignment of Pakistan with KSA , this option is practically redundant.
• Diversification: Invest further in alternative trade corridors, such as INSTC (International North-South Transport Corridor) via Iran-Russia, or pursue temporary expansion via Chabahar Port, which enjoys significant Indian investment and Iranian support. However, this pathway remains vague given how Iran will already be preoccupied with its increasing risk of full-scale war, as well as an already preoccupied Russia in Ukraine.

The Endpoint – Israel

The intention behind Israel’s inclusion in the IMEC Corridor was to establish a link to European ports, utilizing its rail connectivity and the Haifa Port. However, its deepening confrontation with Iran, in addition to instabilities surrounding in Gaza, Syria, and Lebanon, now places its infrastructure and logistics systems at direct threat from missile attacks and cyber strikes.

Iran-backed militias in Lebanon and Syria may launch sustained attacks on Israel’s northern transport corridors. At the same time, the viability of rail transit across Jordan to Haifa becomes politically and logistically uncertain in the face of growing Jordanian public opposition.

This undermines the European-facing end of IMEC and may prompt a decoupling, necessitating firm steps in the execution of IMEC on different fronts until security conditions stabilize in the region. That, in turn, reduces the attractiveness of immediate India-UAE activation, as goods may reach a dead end in Jordan or KSA.

IMEC – Advantage Israel

For Israel, this serves as a strategic opportunity to become a key logistics hub, forcing normalizing ties with Arab nations and creating an ambitious “peace triangle” that links the regions economically.

Key Benefits for Israel:

• Geopolitical Integration: IMEC could initiate and solidify Israel’s Middle East/regional integration, building upon the Abraham Accords and creating closer economic ties with Gulf States. It aims to achieve some business and Trade by bypassing Abraham Accords, specially with Saudi Arabia, which otherwise may not be possible because of Palestinian -Gaza and West Bank occupational issues. The perpetual Israeli aggression in Lebanon, Syria etc. and Greater Israel project, has created a pariah’s image within Arab world and otherwise, without a trade angle, will find it difficult to integrate within the West Asia world.
• Logistical and Economic Hub: By linking the port of Haifa to the Gulf, Israel would become a key transit point between Asia and Europe, facilitating trade that could bypass the Suez Canal. Haifa aims to replace Jebel Ali port and Jeddah port and hurt Egypt economically and hence, controlling Egypt’s defensive expansion.
• Energy and Technology Cooperation: The corridor facilitates cooperation in green energy infrastructure, including hydrogen and solar projects, supporting Israel’s energy goals.
• Economic Growth: The project is expected to boost infrastructure investments, reduce, accordingly, logistics costs, and diversify Israel’s trade partnerships beyond traditional partners. 

Challenges:
IMEC project is currently hampered by significant instability from the Gaza war and the confrontational stance towards Iran, which pose threats to the infrastructure. Other major interest to destabilise IMEC are Yemen, Levant region, Iraq and Egypt, directly and Turkey, China, Oman indirectly.

Israeli END Goal

The corridor’s success will make normalisation with Arab world easier as it would be heavily reliant on Israel for regional & trade stability and would force a diplomatic normalization between Israel and its neighbors

Conclusion

The vision of IMEC remains compelling, but its realization is now subject to the shifting sands of the West Asia geopolitics. The escalating US/Israel-Iran conflict introduces security dilemmas that could end the corridor’s intended integration, particularly in its early phase between India and the UAE. For security strategists, the challenge is to preserve strategic momentum while managing volatility—through adaptability, diplomacy, and phased execution. IMEC’s future now depends less on ambition and more on calibrated resilience and the tectonic shift after the end of war between US/Israel and Iran. It will be determined more by Iran’s strategic interest over that of its Gulf neighbours.

Above all, the impression IMEC in many opinions. was to primarily conceive to benefit Greater Israel project and therefore, will not go down well with the Arab street. Further, it does not offer any significant strategic advantage to major players like India and Saudi Arabia.  Europe needs a peaceful middle east more than US & Israel and needs to prioritise its own selfish economic and energy interest over any political alignment.

Picture credits: Al Majalla / Nash Weerasekera