With the future of key connectivity projects at stake, India must step up as a reliable mediator as the war in the Middle East escalates
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This article is part of the essay series “Sagarmanthan Edit 2024”
On 7 October 2023, Hamas launched the “al Aqsa Storm” operation against Israel, triggering a series of retaliatory military actions from both sides. Iran-backed groups such as Hezbollah in Lebanon and militias in Yemen also became involved, further escalating the conflict. With rising regional tensions and direct involvement from both Israel and Iran, instability across the Middle East has intensified. This conflict will also impact the future of economic corridors in the region in which India invests.
In this context, the future of two important corridors—the International North–South Transport Corridor (INSTC) and the India-Middle East-Europe Corridor (IMEC)— is at stake. India initiated both corridors, emerging as a rising power in Eurasia. The INSTC aims to connect India to Central Asia and Russia via Iran, while IMEC aims to bridge India and Europe via the Persian Gulf states and Israel. Thus, stability in the Middle East aligns with Indian interests. To achieve stability, India can leverage its economic influence with the conflicting parties to initiate a ceasefire.
The INSTC aims to connect India to Central Asia and Russia via Iran, while IMEC aims to bridge India and Europe via the Persian Gulf states and Israel.
The INSTC was initiated by Russia, Iran, and India in 2000 to link Russia to the Indian Ocean via Central Asia, South Caucasus and Iran. Analysts argued that bilateral trade volumes will increase by improving north-south transport connectivity. Through this corridor, Russia aims to consolidate its position in the South Caucasus while bringing Iran and Azerbaijan closer to each other. India is investing in the Iranian Chabahar port to integrate it into INSTC projects. Positioned as an alternative and shorter route to the Suez Canal, the INSTC aims to not only facilitate trade and connectivity in Eurasia but also bypass United States (US) sanctions. India also aims to use the INSTC as a geoeconomic tool to balance China’s Belt and Road Initiative (BRI) projects in Central Asia. However, any escalation between Tehran and Tel Aviv may jeopardise this project, as the risk of Israeli airstrikes will prevent investors from investing in key infrastructural projects in Iran.
The US-backed MoU aimed to boost a project that would bolster regional communication and transport networks, linking the Indian Ocean to the Persian Gulf, Israeli ports, and Europe.
In September 2023, during the G20 summit in New Delhi, a Memorandum of Understanding (MoU) was signed between India, the US, the United Arab Emirates (UAE), Saudi Arabia, Jordan, France, Germany, Italy, and the European Union (EU) to form the IMEC. The US-backed MoU aimed to boost a project that would bolster regional communication and transport networks, linking the Indian Ocean to the Persian Gulf, Israeli ports, and Europe. Many analysts viewed the launching of the IMEC as a counterweight to China’s BRI in the Middle East. The significance of IMEC also lies in the fact that it competes with the current trade route passing via the Suez Canal, and it bypasses the coasts of Yemen and the Red Sea where Yemeni Houthi militias have targeted ships. The US initiated this project to counter the growing Chinese influence in the region and facilitate reconciliation between Israel and Arab nations, mainly Saudi Arabia. Türkiye opposed this project as it bypassed its territories. The Arab states of the Persian Gulf viewed this project positively since it aligns with their broader economic vision to maximise their geopolitical influence in the region. Israel also welcomed this initiative. During the 79th session of the United Nations General Assembly (UNGA), Israel’s Prime Minister, Benjamin Netanyahu, called this corridor a “blessing” for the region. He also mentioned that this project would open the path towards creating a “New Middle East”, which would bring peace and instability. However, this project has been delayed due to the ongoing war.
Both the INSTC and IMEC hold geoeconomic and geopolitical significance for India. The rising instability in the Middle East is not in India’s best interest. In case the situation escalates further, New Delhi will find itself isolated since its trade with Russia and Europe is threatened by the ongoing war in Ukraine. Moreover, a direct clash between Tel Aviv and Tehran would destabilise the Persian Gulf and increase oil prices, further placing India in a difficult position as it is the fifth-largest crude oil importer globally.
A direct clash between Tel Aviv and Tehran would destabilise the Persian Gulf and increase oil prices, further placing India in a difficult position as it is the fifth-largest crude oil importer globally.
To prevent this, India can use its economic leverage with both Israel and Iran to de-escalate the situation in the Middle East and push forward both its INSTC and IMEC projects. Having neutral relations with Iran (economic ties) and Israel (economic and security ties), while also being concerned about a possible power vacuum and increasing religious radicalisation in Afghanistan and Kashmir, India can emerge as a reliable power broker in the region. With the US being reluctant or unable to reshape the regional order, other Eurasian actors, such as India, with no expansionist ambitions in the region, can serve as a bridging role, facilitating indirect talks and creating diplomatic platforms between conflicting parties.
Yeghia Tashjian is the Regional and International Affairs Cluster Coordinator at the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut.
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Yeghia Tashjian is the Regional and International Affairs Cluster Coordinator at the Issam Fares Institute for Public Policy and International Affairs -American University of Beirut. ...
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