New India-EU trade route: Bringing the Gulf states closer?

The new planned trade route between Europe and India is also an attempt to bring Saudi Arabia and the UAE closer to the West. But those countries see the project differently

Saudi Arabia's Crown Prince, PM Narendra Modi and US President Joe Biden  at the recent G20 summit (photo: DW)
Saudi Arabia's Crown Prince, PM Narendra Modi and US President Joe Biden at the recent G20 summit (photo: DW)


For the Saudi Arabian investment minister, it's a project deserving of superlatives. The new trade route, which will go from India to the Middle East, via Europe, will be just as important as the Silk Road or the Spice Route were historically, Khalid al-Falih enthused in September while at the first India-Saudi Arabia Investment Forum in New Delhi.

It was at the G20 summit earlier in the month, that the US, the European Union, India, Saudi Arabia, the United Arab Emirates and other member states declared they wanted to create an India-Middle East-Europe Economic Corridor, or IMEC, which will include a rail link, as well as an electricity cable, a hydrogen pipeline and a high-speed data cable, according to a document prepared by the European Commission.

The planned corridor would run around 4,800 kilometers (2,982 miles) and will have two separate wings: The eastern wing will connect India with the Gulf states and the northern one will go from the Gulf states into Europe.

Aligning nations of 'same mind and same vision'?

The plan is a historic one, according to Saudi investment minister al-Falih. "People talk about the silk route, the spice route of India through the Arabian Peninsula, but this is going to be more significant and relevant because it's going to be about new energy, data, connectivity, human resources, aviation routes and it's about aligning countries that are of the same mind and same vision," he said at the G20 meeting.

Al-Khalil's words are optimistic. The reality is that, as much as the economic interests of the involved nations may be similar, they still differ in important areas — and especially in political terms.

The US' deputy national security adviser, Jon Finer, spoke in more realistic terms about the project. It would benefit low- and middle-income countries in the region and also enable the Middle East to play an important role in global trade, he said during the G20 summit. But of course, there was more to the new trade corridor than trade, he noted.

The plan is "a huge opportunity, building on our broader efforts over the last couple of years, to turn the temperature down across the region, increase connectivity within the region, and address a conflict where we see it," Finer said. His words likely apply to the US' relationship with Saudi Arabia in particular, which has only just recovered from the reputational damage done by the 2018 murder of the Saudi government critic, Jamal Khashoggi, inside the Saudi consulate in Istanbul, Turkey.

Countering China

On one hand, in promoting this trade corridor, the White House is trying to counter China's own ambitious Belt and Road Infrastructure initiative, said Christian Hanelt, an expert on the Middle East at the Bertelsmann Foundation. On the other hand, the US is also trying to bring its partners in the Gulf closer. "The US is trying to establish a new kind of geostrategic order through this transport corridor, into which the Middle East will be integrated," Hanelt told DW.

But this is likely to be a tricky undertaking, he added. Because the countries that are to be signatories to the IMEC — other than the Gulf states, Israel will also apparently be involved — are not really working according to the old geopolitical order which lined the US' allies up against other groups headed by, for example, China or Russia.

Instead, Hanelt said, "they are looking out for any advantages they could have themselves from the confrontation between the West and Russia and China. That's why the Western nations have to make significant offers in order to keep them on their side."

A rumored rapprochement between Saudi Arabia and Israel can also be seen in this context. The Saudis would anticipate political benefits from that as well as further positives in the economic, technological and security sectors.

Can the West compete?

However, truly aligning the Gulf states with the West will be a lot harder. Senior representatives in those countries have said they don't want to be part of either "side."

This can be seen in the fact that both Saudi Arabia and the UAE are still cooperating with Russia, despite the war in Ukraine, and that they say they want to become part of the BRICS group of emerging economies — the group is named for its primary members, Brazil, Russia, India, China and South Africa, and looks likely to welcome new members from next year.

It's clear that these actions are part of the Gulf states' wish to diversify their international relationships and not to end up taking one side or another, Hanelt explained.

"For example, Saudi Arabia wants to work more closely with the US on military issues and more closely with Israel on technology," Hanelt argued. "At the same time, the country wants to strengthen — and above all, maintain — its oil exports to China and India."

Saudi Arabia is also happy to see more investment from China, particularly when it comes to alternative energy sources. "Any Western offers to Saudi Arabia should be just as attractive," Hanelt noted. The same goes for Israel, usually a strong US partner: Over the past few years, China has invested intensively in Israeli start-ups and other innovative sectors there.

Riyadh and Abu Dhabi haven't been thinking about geo-political blocs for some time now and have relationships all over the place, agreed Marcus Schnieder, the Lebanon-based project director for the Regional Peace and Security Project at Germany's Friedrich Ebert Foundation. "They're taking care of their contacts with Washington just as much as they're taking care of those in Beijing," he told DW. "Now they're also bringing India closer and simultaneously promoting better connections to Europe."

The goal for the Saudis and Emiratis is to bring the world's major powers to the point where they all have to compete for the Gulf states' favor, but without getting too tied to any single one of them, Schnieder said. In particular, Saudi Crown Prince Mohammed bin Salman is trying to become a "central figure in world politics. In a sense, the only one in the world who's able to keep equally good relations with Biden, Xi, Modi, Putin and von der Leyen," Schneider said.

Gulf states also navigating economic challenges

What appears to be the open nature of the planned IMEC will make it simpler for interested nations to join in and therefore also easier for them to be integrated into the community of participating countries, according to an analysis by Mohammed Soliman, director of the strategic technologies program at the Middle East Institute, that was published in the Middle East online magazine Al Monitor earlier this month.

Such openness "represents a success for Washington, which, along with Brussels, has grappled with the challenge of presenting a viable alternative to [China's Belt and Road Initiative] that doesn't force partners like the Gulf and India into an either-or choice, as such a choice was highly unlikely," Soliman wrote.

The latter is likely due to the fact that the Gulf states have become accustomed to a higher degree of geopolitical uncertainty. "In the Gulf states' capital cities, people really don't know whether they can ultimately rely on the White House," the Bertelsmann Foundation's Hanelt said. For example, if somebody like former US President Donald Trump moves back into the White House, then Washington's course might change again. And, Hanelt explained, "they want to be prepared."

In addition to political considerations, there are also the economics to think of. "The move towards renewable energies is a huge challenge for them," Hanelt said. "For one thing, they want to ensure their oil exports for the next 20 or 30 years. And at the same time, they want to be leaders in the transformation towards new energies. For this, they need to cooperate with the Europeans," he concluded.

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Published: 23 Sep 2023, 3:00 PM