Israel-Hamas War ‘Shatters’ India’s Dream; Modi’s Ambitious Project To Counter China’s BRI Jeopardized?

The Hamas attack on Israel and the declaration of war by Tel Aviv against the Iran-supported group has an unintended fall-out. It also has severe strategic consequences that have accentuated the geopolitical distrust among nations already caused by the Russia-Ukraine conflict.

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The armed conflict in the region has now jeopardized the ambitious India-Middle East-Europe Economic Corridor, announced on the sidelines of the G-20 summit hosted by Indian Prime Minister Narendra Modi in New Delhi in the second week of September.

The violence and resulting animosity between Israel and the Islamic nations in West Asia may also hurt the India-Israel-UAE-US grouping, also called the I2U2.

The India-Middle East-Europe Economic Corridor was signed into a Memorandum of Understanding between the European Union and seven countries: India, the US, Saudi Arabia, the United Arab Emirates (UAE), France, Germany, and Italy.

The future of this economic corridor lies in integrating other nations of the Middle East, such as Israel, into the grouping to connect thousands of kilometers from India to Europe.

The I2US economic cooperation grouping was set up two years ago, in 2021, when the foreign ministers of the four nations agreed on the possibilities for joint infrastructure projects in the fields of transportation, technology, maritime security, and economics and trade.

Though loosely described as the mini-quad focusing on the Middle East, the grouping has the scope for expanding and including the Gulf Cooperation Council, India’s largest trading bloc.

However, the present conflict that involves Israel and Hamas also threatens the peace initiatives in the region, with ties thawing between Tel Aviv and other Gulf countries. It also threatens the Abraham Accords, a series of agreements signed in 2020 between Israel and several Arab states, marking a historic shift in regional diplomatic relations.

The Israel-Hamas conflict primarily affects the Middle East and could indirectly affect the broader West Asian region. Ongoing conflicts and instability in the region can create an environment that discourages foreign investments and hinders the development of economic corridors. Investors and businesses often hesitate to commit resources to regions with ongoing security concerns.

Energy, Infrastructure Projects Under Threat

One of the critical aspects of any corridor in the Middle East is the transit of energy resources. The region is a central hub for oil and natural gas transportation. Any disruption caused by regional conflicts can potentially impact energy prices and global energy markets. India and Europe, as major energy importers, may be affected by such disruptions.

Geopolitical dynamics in the Middle East can influence India’s and Europe’s relationships with countries in the region. The stance taken by these regions on the Israel-Hamas conflict may affect their broader relationships with Middle Eastern nations. This, in turn, could impact potential economic cooperation and corridor development.

The development of economic corridors typically requires significant infrastructure investment, including roads, railways, ports, and more. Political instability and security concerns can lead to delays and increased costs for infrastructure projects. Moreover, investors may be cautious about participating in projects in regions with a history of conflict.

Economic and strategic interests are key factors that drive international partnerships and alliances. The impact of the Israel-Hamas conflict on any grouping involving these countries could be influenced by how the conflict affects trade, energy, security, and other mutual interests.

China May Try To Meddle

China’s economic interests in the Middle East, including energy imports and infrastructure projects, are significant. Regional instability, primarily if it affects energy supply routes or infrastructure projects, could impact China’s economic interests in the region. China may use its economic leverage to promote stability and security.

China has been working to strengthen its bilateral relationships in the Middle East, including with countries that may be involved in the Israel-Hamas conflict. How China navigates its relations with Israel, the Palestinian territories, and regional players like Egypt, Saudi Arabia, and Iran during and after the conflict can affect its standing and influence in the region.

China’s Belt and Road Initiative (BRI) includes infrastructure projects that traverse the Middle East. Any disruption due to conflict could impact the progress and viability of these projects. China may need to engage with regional stakeholders to mitigate risks and ensure the continued development of the BRI in the region.

India, Europe, and other international actors may engage in diplomatic efforts to mediate or resolve conflicts in the Middle East, including the Israel-Hamas conflict. Their involvement could lead to stability and create a more conducive environment for economic cooperation and corridor development.

US May Need To Put Pressure

Israel has recently normalized relations with the UAE and has long-standing close ties with the United States. These relationships have evolved significantly in recent years and are not solely defined by the Israel-Hamas conflict. However, any escalation or prolonged conflict in the region could strain these relationships, depending on how each country perceives the situation and their respective interests.

The United States has traditionally strongly supported Israel and its security interests. The impact of the Israel-Hamas conflict on its relationship with India and the UAE would depend on its approach to the conflict. The US may continue to support Israel while working with its partners to address regional stability and security concerns.

The UAE has sought to position itself as a mediator and peacemaker in regional conflicts. Its involvement in the Israel-Hamas conflict and its stance on the situation could influence its relations with other countries in the grouping.

The UAE may use its diplomatic efforts to seek de-escalation and peace in the region, potentially in coordination with India and the United States. UAE has already condemned the Hamas attack on Israel, which could significantly cause its differences with other West Asian nations.

India Has A Critical Role

Establishing an economic corridor between India, West Asia, and Europe would require smooth trade routes and connectivity. Ongoing conflicts can disrupt trade flows and make it challenging to ensure the reliable movement of goods along these routes.

Countries often explore alternate routes and diversify their trade and energy sources in response to conflicts or instability in a specific region. India and Europe may seek to reduce their reliance on routes passing through conflict-prone areas and look for alternative corridors and supply chains.

India has historically maintained a balanced approach in the Israeli-Palestinian conflict, advocating for a two-state solution while maintaining diplomatic relations with Israel and Palestinian authorities. However, Prime Minister Narendra Modi and his government’s condemnation of the Hamas attack as a “terror” act could harm the ties with nations in the region.

The impact of the Israel-Hamas conflict on India’s position within any grouping would depend on its ability to continue this balanced approach and pursue its national interests. India may prioritize its relationships with all parties involved and work to de-escalate regional tensions.

  • NC Bipindra is a 30-year veteran in journalism specializing in strategic affairs, geopolitics, aerospace, defense, and diplomacy. He has written extensively for the Times of India, New Indian Express, Press Trust of India, and Bloomberg News. He can be reached ncbipindra (at)
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