Israel-Hamas War: India's G20 led trade deals likely under threat

Israel-Hamas War: The Israel-Hamas war might affect the plans to build the India-Middle East-Europe Economic Corridor (IMEEC) that was announced during the G20 meet under India's presidency.

India-Middle East-Europe Economic Corridor

For now, the war has put a lid over the Economic Corridor project that was announced with such hopes and pomp. This has also cast a shadow over India's ambition to play a bigger role in global trade.

On Monday, Railway stocks including IRCON, Jupiter Wagons, RVNL and IRFC saw a fall of around 5-6% each on fears that the war could impact India's plan of building the IMEC. Shipping stocks also saw a fall as Shipping Corporation fell about 5% on Monday.

Also Read: Israel-Hamas War: Adani's Haifa port staff on high safety alert

Delay in Middle East Normalisation

The success of IMEEC depends on the establishment of normalisation ties in the Middle East which is now expected to be delayed.

The US in 2020 brokered the Abraham Accords, which led to the normalisation of relations between Israel and both the United Arab Emirates and Bahrain. The US has also been working with Saudi Arabia and Israel to achieve the same feat.

Israel PM Benjamin Netanyahu in late September informed the United Nations General Assembly that a historic breakthrough was not far away.

The IMEEC brings great opportunities to Saudi Arabia as it would get Western assistance to develop a rail network and obtain access to Israel's Haifa port through Jordan. The plan was to link Middle Eastern countries by rail and to India through shipping lanes from ports in the region, extending on to Eastern Europe.

The route of the plan was expected to be announced two months after the announcement. However, the rising geopolitical tension may have put a stop to the U.S, Israel and Saudi Arabia's efforts to bring peace.

The Saudi Press Agency has reported that the Crown Prince told Palestinian President Mahmud Abbas the Gulf kingdom continued "to stand by the Palestinian people to achieve their legitimate rights to a decent life, achieve their hopes and aspirations, and achieve just and lasting peace."

Meanwhile, social media posts supporting Palestinians have also emerged from countries like Lebanon, Bahrain, Kuwait, and others.