Israel, Hamas conflict casts shadow on ambitious economic initiatives

Subject :IR

Section: International Grouping

Context: Israel, Hamas conflict casts shadow on ambitious economic initiatives

More about the news:

The recent escalation of hostilities between Israel and Hamas is expected to impact two major economic initiatives involving India, Israel, and other stakeholders.
The I2U2 i.e India, Israel, US, and United Arab Emirates and IMEC i.e India Middle East EU Economic Corridor initiatives, aimed at creating new partnerships for India’s post-COVID economic plans, may suffer due to the conflict.
I2U2 had plans for food parks in India and a hybrid renewable energy project in Gujarat.
The IMEC agreement, launched during the G-20 summit, is also under evaluation.
The conflict has the potential to jeopardize Israeli relations with Arab countries, impacting economic ties and investments, such as the Adani group’s ownership of the Haifa port.

What is India-Middle East–Europe Corridor (IMEC):

India Middle East Europe Corridor is a network of transport corridors comprising railway lines and sea lanes to promote economic integration between Asia, the Arabian Gulf, and Europe.
It was signed at the G20 Summit in New Delhi and holds significant geopolitical and economic implications for India.
It has 8 signatories i.e India, the US, Saudi Arabia, UAE, the EU, Italy, France, and Germany.
The proposed IMEC will consist of Railroad, Ship-to-Rail networks and Road transport routes extending across two corridors, that is,
- The East Corridor – connecting India to the Arabian Gulf,
- The Northern Corridor – connecting the Gulf to Europe.
Ports to be Connected:
- India: Mundra (Gujarat), Kandla (Gujarat), and Jawaharlal Nehru Port Trust (Navi Mumbai).
- Middle East: Fujairah, Jebel Ali, and Abu Dhabi in the UAE as well as Dammam and Ras Al Khair ports in Saudi Arabia.
- Railway line will connect Fujairah port (UAE) to Haifa port (Israel) via: Saudi Arabia (Ghuwaifat and Haradh) and Jordan.
- Israel: Haifa port.
- Europe: Piraeus port in Greece, Messina in South Italy, and Marseille in France.
It is part of the Partnership for Global Infrastructure Investment (PGII) which is a collaborative effort by G7 nations to fund infrastructure projects in developing nations.
PGII is the G7 bloc’s counter to China’s Belt and Road Initiative.
PGII is part of G7’s vision of Build-Back-Better framework.