A new multicontinental trade deal has the potential to shape the global mobility industry’s future. At the G20 meeting in New Delhi this September, a new trade corridor was announced, called the India-Middle East-Europe Corridor (IMEC), which would connect India to the Middle East and Europe via a railway with connecting ports across participating countries.
The project is a partnership among the U.S., India, Saudi Arabia, the United Arab Emirates, France, Germany, Italy, and the European Union. The White House has said that this trade corridor will usher in a “new era of connectivity." The connection would revolutionize several industries within the global mobility space, including energy providers, commercial shipping and manufacturing, and extending out to business travel and assignments. The White House fact sheet on the trade corridor states that the trade corridor will include rail connectivity, shipping lines, high-speed data cables, and a clean-energy hydrogen-based pipeline.
A 2020 report conducted by the World Bank found that regional integration and trade within the region and outside of the region will be crucial to “igniting economic growth in the post-COVID era." According to a 2023 report by the World Economic Forum, economic fragmentation threatens to wipe 7% of GDP from the global economy. This new trade corridor will not only be an unprecedented fostering of international relations among Middle Eastern, European, and South Asian countries, but it sets the stage for steadily fueled economic growth. This trade corridor would streamline existing regional and international supply chain systems, offer better trade accessibility and facilitation, and add jobs. European Commission President Ursula von der Leyen described IMEC as “nothing short of historic," and emphasized that IMEC “could slash transit time between India and Europe by 40%."
This trade corridor is also considered to be a competing trade corridor with China’s Belt and Road (BRI) infrastructure initiative that was created in 2013 and expected to connect China with Central Asia and Europe via a revitalization of the Silk Road trade routes and initiatives that spread as far as Kenya and Sri Lanka. However, the project has been under criticism lately. Italy, the first G7 country to join, has since bowed out, citing “unmet promises." India had objected to the BRI, as the China-Pakistan Economic Corridor would run through territories that are claimed by India.
Fostering a relationship with the United States, the European Union, Israel, Saudi Arabia, and other countries to build a viable alternative such as IMEC would diminish China’s continued power in international trade. The development of these two trade routes will have big consequences for both China and the U.S. and their place on the world stage, with the ripples affecting every aspect of the mobility industry.
While details on the specific locations have yet to be announced, ports in Haifa, Abu Dhabi, and the state of Gujarat are currently being explored. The countries in the memorandum of understanding are expected to start lining up details as soon as November.