The road beyond Hormuz: Time for India to revive IMEC

The dust has settled from US President Donald Trump’s meeting with his Chinese counterpart Xi Jinping. That the summit failed should be no surprise. Trump’s goal was neither a grand bargain nor even strategic; rather, he sought a diversion. In Washington, criticism mounts from the Epstein files and his mishandling of the Iran war. Trump likes pomp and ceremony. In Beijing, he could have both without dealing with the democratic press.

While American critics of Trump and proponents of Taiwan feared Trump might bargain away the island’s rights and US defence commitments, Trump did not come prepared to bargain on anything so grand.

Xi, meanwhile, also fumbled the summit. While he likes to command a position of strength, his recent purge of People’s Liberation Army generals conveys the opposite: his own growing paranoia and unease in Chinese society. China’s population is rapidly ageing and now declines due to the legacy of the now-defunct one-child policy. As China’s population shrinks, its economy might also teeter. Xi might still have stage-managed a show, empty as it might have been, but the foibles of autocracy – trampling an American journalist and a standoff with a US Secret Service member accompanying the president – stole the headlines.

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For most Americans, Indians, and residents of other industrialised societies, the main issue that mattered—energy security—remained unresolved. The Islamic Republic’s efforts to toll international shipping remain in force. Even as word spreads about a possible deal, the details suggest Iran’s continued insistence on controlling shipping. Nour News, an outlet close to the regime’s Supreme National Security Council, reports that Tehran’s position first requires the return of $11 billion frozen in Qatar. Iranian officials then say they will set a quota for trips to transit the Strait of Hormuz, implying the continuation of their toll scheme.

The Iran war has already changed global shipping routes. Countries now abandon the Bab el-Mandeb and Red Sea for the long route around the Cape of Good Hope in South Africa. This is not necessarily a safe remedy; however, with piracy again surging off the coast of Somalia, the failure by India, the United States, and other countries to recognise the independence of Somaliland and use it to consolidate maritime security comes at a huge cost.

Still, there is a way forward with the revitalisation of the India-Middle East Economic Corridor, first unveiled on 9 September 2023 by Prime Minister Narendra Modi at the G20 summit in New Delhi. The Hamas invasion of southern Israel and the slaughter of 1,200 civilians created a crisis in the region that derailed work on the India-Middle East-Europe Economic Corridor (IMEC) and ultimately culminated in the current US-Israel war with Iran. With both the International North-South Transit Corridor channelling trade from India through Iran to Russia unlikely in the near and medium term due to war damage at Chabahar and uncertainty in the future of both Iranian and Russian politics, and the route around Africa increasingly vulnerable to piracy off the coast of Somalia and also in the Gulf of Guinea, IMEC becomes the most logical path forward.

Here, India, as the soon-to-be world’s third-largest economy, can play an outside role. Prime Minister Narendra Modi and United Arab Emirates President Mohamed bin Zayed are not only allies but also increasingly strategic partners and friends. The Emiratis and the Saudis both seek to channel their trade away from Persian Gulf vulnerabilities. The Jordanian truckers union remains a problem as they resist rail schemes, but New Delhi, Abu Dhabi, and Riyadh all have the diplomatic and economic capital to force King Abdullah II to make difficult and unpopular choices in Jordan that he has so far resisted.

The Trump-Xi summit was the last gasp for the status quo; its failure buries any hope that the international community can return to the status quo ante. It is now up to PM Modi to shape the future of regional trade. For too long, traditional Indian diplomatic culture has led India to punch far below its potential weight; that must change.

(Michael Rubin is director of policy analysis at the Middle East Forum in Washington, DC, and a distinguished fellow at the Usanas Foundation in Udaipur, India. The views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)