Red Sea Crisis & Importance of IMEC

Syllabus: GS 2/International Relation

  • The Red Sea crisis has caused economic implications like the surge in container ship costs, highlighting the need to revisit alternate routes for global trade.
Do you know ?
– The Red Sea is a semi-enclosed, inlet (or extension) of the Indian Ocean between the continents of Africa from Asia. 


– It is connected to the Arabian Sea and the Indian Ocean to the south through the Gulf of Aden and the narrow strait of Bab el Mandeb.
– The countries of Yemen and Saudi Arabia border the Red Sea to the east.
– The Red Sea is bordered by Egypt to the north and west, and by Sudan, Eritrea, and Djibouti to the west. 
  • Houthi rebels in Yemen have significantly stepped up attacks on commercial shipping vessels travelling through the lower Red Sea since mid-November 2023 in response to Israel’s bombardment of Gaza.
  • The Red Sea owes its strategic importance for global trade to the Bab el-Mandab Strait which lies between Yemen and Djibouti.
  • It is one of the world’s busiest cargo and oil transit points with almost 12% of international merchandise trade passing through it.
  • Major container and oil carriers have been forced to re-route shipments via the Cape of Good Hope. 
  • The re-routing has led to rising ocean freight, inflated insurance costs, and longer voyage times leading to delays and shortage of products.
  •  It has also driven up transportation costs. 
  • The higher shipping costs will be passed onto consumers in the form of increased commodity prices.
  • As global supply chains are battling delayed shipments and rising costs, China is actively projecting China-Europe freight trains, which are part of the Belt and Road Initiative (BRI), as an alternate route.
  • India’s trade with European and North African countries flows entirely through the Red Sea route which is almost 24% of its exports and 14% of its imports.
  • In the year 2022-23, India’s bilateral trade with Europe and North Africa stood at $189 billion and $15 billion respectively
  • The rising fears among traders have already seen a drop in Indian shipments. As per the Federation of Indian Export Organisations (FIEO), rising threats have prompted Indian exporters to hold back around 25% of their cargo ships transitioning through the Red Sea.
  • The India-Middle East-Europe Economic Corridor (IMEC) was announced during the G-20 summit in 2023.
  • It will comprise two separate corridors, the east corridor connecting India to the Gulf and northern corridor connecting Gulf to Europe.

  • It aims at integration of Asia, Europe and the Middle East.
  • It will provide a reliable and cost-effective cross-border ship to rail transit network to supplement existing maritime routes. 
  • It is estimated to cut the journey time from India to Europe by 40% and slash transit costs by 30%.
  • IMEC also provides an opportunity to counter the growing Chinese geopolitical influence.  
  • This Corridor will help to bring countries in the Middle East together and establish that region as a hub for economic activity instead of as a “source of challenge, conflict or crisis” as it has been in recent history. 
  • The initiative aims to address the insufficient infrastructure required for development in lower and middle-income countries.
  • It is not receiving much attention  and there have not been any investments or operations regarding the corridor. 
  • Furthermore, the Israel-Palestine conflict has put a pause on the normalisation of Arab-Israel relations which is a key element of the multi-nation initiative. 
  • Another major challenge is the vulnerability of the Strait of Hormuz.
    • The entire trade of the IMEC architecture flows through the Strait of Hormuz and with Iran’s proximity and control over the strait, the risk of disruptions remain very high. 
  • The growing crisis in the Red Sea poses a significant global concern, necessitating a united response from the international community.
  • An empirical study on the economic benefits of the IMEC  needs to be conducted.
  • There are speculations that multiple handling of cargo and multi-nation transit would increase carriage and compliance costs.
    • Therefore, it is critical to quantify the economic advantages of the corridor to attract more stakeholders.
  • A robust financial framework needs to be in place.
    • Since there are no binding financial commitments on any of the signatories of the corridor, investments will have to be attracted from governments, international organisations, and private sector entities.
  • A comprehensive multi-nation operational framework is needed.
    • As the corridor involves facilitating trade across different legal systems, a multi-national framework is necessary. 
  • A forum for the corridor needs to be constituted to undertake the aforementioned activities.
Mains Practise Question 
[Q] The ongoing disruptions along the Red Sea route is devastating for global trade and supply chains. In light of above statements, analyse the importance of India-Middle East-Europe Economic Corridor (IMEC).