India’s Trade Route Gamble: Why the IMEC Corridor is Winning
India, traditionally non-aligned in its foreign policy, finds itself at a critical juncture. The escalating conflict between the U.S., Israel, and Iran is forcing a reassessment of its ambitious trade corridor plans aimed at streamlining access to Europe – a key trading partner following the recent trade deal finalized in January 2026.
The Two Corridors: A Tale of Shifting Fortunes
New Delhi has been quietly developing two major routes. The first, the International North–South Transport Corridor (INSTC), utilizes Iran’s Chabahar Port to connect India to Russia, Europe, and Central Asia. The second, the India–Middle East–Europe Economic Corridor (IMEC), aims to link India to Europe via Gulf ports and Israel’s Haifa Port through a railway network.
An aerial view of the USS Abraham Lincoln Carrier Strike Group while operating at the Arabian Sea, escorted by two military replenishment ships and two U.S. Coast Guard vessels, as fighter jets from Carrier Air Wing Nine conducted flight operations overhead in the Arabian Sea, on Feb.6, 2026.
US CENTCOM | Anadolu | Getty Images
IMEC Takes the Lead
Experts now believe that only one of these corridors has a realistic future: the IMEC. “If Israel and U.S. Win, IMEC will likely be Israel’s preference over the revival of Chabahar,” stated Rafiq Dossani, an economist at RAND. The IMEC corridor enjoys strong backing from U.S. President Donald Trump, who called it “one of the greatest trade routes in history,” and Israeli Prime Minister Benjamin Netanyahu, who described it as the “largest cooperation project in our history.”
The uncertain future of Iran is central to this shift. Dossani argues that even if Iran avoids defeat, sanctions will likely remain, and any benefits from the region will accrue to the victors. The ongoing U.S. Aerial attacks on Tehran are reinforcing this pessimism regarding the Chabahar route.
Delays Plague the INSTC
The Chabahar-Zahedan railway, a crucial component of the INSTC, is facing “indefinite delays,” according to Chietigj Bajpaee, senior research fellow at Chatham House. This comes on top of existing concerns surrounding India’s $120 million investment in the Shahid Beheshti terminal at Chabahar Port, with the U.S. Waiver allowing its operation set to expire in April.
The Economic Case for IMEC
“IMEC may gain momentum now that the INSTC has stalled,” Bajpaee noted. The current disruptions to shipping via the Suez Canal, due to the conflict in the Middle East, are forcing ships to take a longer route via the Cape of Good Hope, increasing transit times by 10–20 days and freight rates by 40–50% on key India–Europe routes.
This situation underscores the necessity of IMEC. Harsh Pant, vice president of studies at the Observer Research Foundation, emphasized on CNBC’s “Inside India” that the conflict’s outcome will significantly shape the trajectory of IMEC. IMEC is projected to reduce logistical costs by up to 30% and transportation time by 40% compared to traditional routes, as stated by India’s commerce and industry minister Piyush Goyal last year.
Rick Rossow, senior adviser at CSIS, highlighted that IMEC “tracks geographically” with India’s key trade deal partners, making it a strategically advantageous route.
Regional Stability: The Key to IMEC’s Success
While IMEC is poised to emerge as the frontrunner, its success hinges on regional stability – a commodity currently in short supply.
Require to Know
LPG Supply Concerns: India’s Ministry of Petroleum and Natural Gas has prioritized cooking gas supply to households, potentially impacting over 3 million businesses that rely on LPG for commercial purposes.
India-China Ties: India is easing rules on Chinese investments, signaling a potential reset in economic ties after six years of friction.
U.S. Refinery Investment: President Trump announced a new oil refinery in the U.S., funded by investments from Reliance Industries.
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March 12: India consumer inflation data for February.
March 13: Weekly RBI update on India FX reserve.
March 16: Wholesale inflation data for February.
March 16: India unemployment rate for February.
