Israel-Hamas Conflict To Impact The India-Middle East-Europe Corridor?

The India-Middle East-Europe Corridor was one of the biggest agendas during the no less than Festive G20 Summit held in New Delhi in September. The ambitious IMEC project, although could face some consequences as tensions in West Asia between Israel and Hamas. The war till date has claimed over two thousand lives and nearly 8,000 people have been injured on both sides.

During the highly talked about G20 Summit in New Delhi, India brought the US, UAE, Saudi Arabia, European Union, Italy, France, and Germany to the economic corridor agreement to foster connectivity and economic integration between the region.

The new economic corridor is seen as an alternative to China's controversial Belt and Road Initiative (BRI). The entire success of the proposed corridor project was based on relations between Saudi Arabia and Israel. But as tensions Escalate between Tel Aviv and Gaza the possibility on the ambitious project becoming a reality seems blurred.

The recent West Asia conflict could complicate the matters among the groups as the Arab and western states have different stands on the issue. In a recent statement by Saudi Arabia's Crown Prince Mohammed bin Salman told Palestinian President Mahmud Abbas that he is with them and working to prevent 'an expansion' of conflict.Following the statement, the country's Ministry of Foreign Affairs said, 'Saudi Arabia recalls its repeated warnings of the dangers of the situation exploding as a result of the continued occupation, the deprivation of the Palestinian people of their legitimate rights, and the repetition of systematic provocations against their sanctities.'

In the meanwhile, the United States has openly backed Israel and planned to send a carrier strike group in the Eastern Mediterranean. US President, Joe Biden in a tweet said, 'We stand with Israel. And we will make sure Israel has what it needs to take care of its citizens, to defend itself, and to respond to this attack.' The President further added, 'The brutality of Hamas, the blood-thirstiness, brings to mind the worst rampages of ISIS. This is terrorism.'

On the other hand, the European Union also issued a statement in support of Israel and said, 'EU stands in solidarity with Israel which has the right to defend itself in line with international law, in the face of such violent and indiscriminate attacks.'

As of now, the entire plan of the India-Middle East-Europe Corridor has not been revealed yet. But, if the conflict continues for a long period, the construction of the corridor could be a question. The MoU of the project suggests that it would be funded by G7's partnership for Global Infrastructure Investment (PGII) initiative.

In what was seen as a step towards normalisation of relationships between the Arab powers and Israel, the US helped broker the Abraham Accords under former President Donald Trump. The Accord established diplomatic ties between Israel and the Gulf States of Bahrain and the United Arab Emirates. Israel later signed agreements with Morocco and Sudan as well.

India has been left in a tough diplomatic spot as we share significant trade ties with several Arab nations as well as Israel. Amidst a continued slowdown in several economies, the new conflict can have an impact on external trade. In the last fiscal, India's exports to Israel grew by 76% as per Ministry of Commerce and Industry data.