20 January 2026: MAINS CURRENT AFFAIRS

MAINS Current Affairs includes IMEC’s Relevance to India and its Chokepoints & President of UAE Visit to India

International

1. IMEC’s Relevance to India and its Chokepoints

Context

The ongoing reciprocal tariff measures and rising protectionism by the US pose challenges for developing a multi-country, multimodal transport and trade network such as the India–Middle East–Europe Economic Corridor (IMEC).

About

For nearly all participating countries except the US, IMEC is not a geopolitical contest.
Instead, it acts as economic insurance to safeguard global trade amid supply-chain disruptions, geopolitical fragmentation, and climate-related vulnerabilities.

India–Middle East–Europe Economic Corridor (IMEC)

Background: A proposed 4,800 km trade route announced during the 2023 G20 Summit.
Members: India, EU, France, Germany, Italy, Saudi Arabia, UAE, and the US.
Aim: To integrate Asia, Europe, and the Middle East.

Structure:

East Corridor: Connects India to West Asia/Middle East.
Northern Corridor: Links West Asia/Middle East to Europe.

Ports Under IMEC

India: Mundra, Kandla (Gujarat), and Jawaharlal Nehru Port Trust (Navi Mumbai).
Europe: Piraeus (Greece), Messina (Southern Italy), Marseille (France).
Middle East: Fujairah, Jebel Ali, Abu Dhabi (UAE); Dammam and Ras Al Khair (Saudi Arabia).
Israel: Haifa port.
Railway Link: A line from Fujairah (UAE) to Haifa (Israel) via Saudi Arabia (Ghuwaifat, Haradh) and Jordan.

IMEC’s Relevance to India and Its Chokepoints

Suez Canal Blockage (2021):
- A massive container ship blocked the canal, stranding vessels and disrupting nearly 12% of global trade until clearance.
Red Sea Crisis (2023–24):
- Houthi attacks exposed the vulnerability of congested trade routes.
- Nearly 25% of India’s cargo using the Red Sea was delayed.
- Ships rerouted via Cape of Good Hope added 3,500 nautical miles, over a week of transit time, and nearly $1 million in extra fuel cost per trip.
Impact on India–EU Trade:
- With major India–EU trade depending on the Red Sea–Suez corridor, Indian exporters withheld shipments in late 2023–24, causing a trade decline.
- Since the EU accounts for 12% of India’s merchandise trade, the vulnerability is significant.
Strategic Role of IMEC:
- IMEC mitigates these structural risks—not by replacing the Suez or North-South (via Russia) routes, but by complementing them.
- For India, IMEC is a risk-diversification strategy, not a geopolitical provocation.

Significance of IMEC for India

Economic Growth:
- Enhances connectivity across Asia, West Asia, the Middle East, and Europe, boosting regional development.
Improved Connectivity & Trade:
- Provides India a faster, safer route to Europe via the Arabian Peninsula and Mediterranean.
- Cuts shipping time by up to 40% and costs by 20–30%, reducing reliance on the Suez route.
Stronger Strategic Partnerships:
- Deepens India’s engagement with the US, EU, Saudi Arabia, UAE, and Israel.
- Supports India’s Act West Policy.
Creates a triangular economic system:
- India: manufacturing & services
- Gulf: logistics, energy, capital
- Europe: technology & consumption
Boost to Energy Security:
- Allows integration of pipelines and green hydrogen networks linking India, Gulf producers, and European consumers.
- Supports energy diversification and cooperation in renewables.
Eco-friendly Infrastructure:
- Focuses on developing sustainable, climate-friendly infrastructure.

Concerns

Security Issues:
- Regional instability makes partners hesitant to invest, delaying implementation and affecting India’s regional aspirations.
Lack of Political Consensus:
- The 2023 G20 MoU is non-binding, relying on voluntary alignment.
- Divergent member priorities hinder progress.
Economic & Financial Challenges:
- High costs for ports, rail, pipelines, and digital systems across multiple states.
- Financing mechanisms—multilateral, PPP, or state-led—remain unclear.
Infrastructure & Technical Gaps:
- West Asia faces deficits in cross-border railway connectivity.
- Differences in railway gauges, standards, and customs procedures remain unresolved.

Way Forward

Given the varied fiscal capacities and credit strengths across IMEC regions, traditional public or standalone PPP funding models are inadequate.
IMEC requires a composite financing strategy blending public funds, multilateral guarantees, sovereign wealth investments, and private capital to reduce costs and attract long-term institutional investors.

International Relations

2. President of UAE Visit to India

Context: The President of the UAE, Sheikh Mohamed bin Zayed Al Nahyan, paid an official visit to India.

Major Outcomes

Defence

A Letter of Intent was signed between India and the UAE for a Strategic Defence Partnership.

Energy

India signed a $3 billion LNG purchase deal, making it the UAE’s top liquefied natural gas customer.

Bilateral Trade

Both countries agreed to double bilateral trade to over $200 billion by 2032.
Nuclear Cooperation
They agreed to collaborate on advanced nuclear technologies, including large reactors, SMRs, advanced systems, and nuclear plant operations and maintenance.

Investment

A Letter of Intent was signed for Investment Cooperation between Gujarat and the UAE for developing the Dholera Special Investment Region.

Supercomputing Cluster

C-DAC India and the UAE’s G-42 will jointly establish a supercomputing cluster in India.
Space Cooperation
A Letter of Intent was signed between IN-SPACe (India) and the UAE Space Agency for a Joint Initiative on Space Industry Development and Commercial Collaboration.

Significance of the Visit

Strategic & Geopolitical Importance
- The visit comes amid worsening UAE–Saudi tensions over Yemen.
- It reflects the UAE’s backing for India as a net security provider in the Indian Ocean Region.
Economic & Trade Cooperation
- Strengthens momentum from CEPA.
- The UAE remains one of India’s top trade partners and key investors.
Regional Security Realignments
- With rising speculation of an “Islamic NATO” involving Saudi Arabia, Pakistan, and Turkey, the UAE seeks independent security engagement with India.

Concerns Over Iran

The UAE aims to prevent further escalation involving Iran.
India’s balanced regional diplomacy provides stability and de-escalation.
Invitation to “Board of Peace”
- The US has invited India to join the Gaza reconstruction body.
- The UAE, already on the Board, is seen as encouraging India to reconsider its stance.
People-Centric Engagement
- With 3.5 million Indians in the UAE, the visit highlights labour mobility, skills cooperation, and cultural ties.
- Bilateral Ties Between India and UAE

Political

Diplomatic relations began in 1972.
Upgraded to a Comprehensive Strategic Partnership (CSP) in 2017.
Economic & Commercial

CEPA was signed in 2022.

Merchandise trade rose from $43.3 billion (2020–21) to $83.7 billion (2023–24).
UAE is India’s second-largest export destination ($31.61 billion in 2022–23).
Bilateral trade is expected to cross $97 billion, with plans to reach $100 billion in non-oil trade.

Defence Cooperation

Guided by the Joint Defence Cooperation Committee (JDCC) since the 2003 Defence Cooperation Agreement (effective 2004).
Includes extradition and mutual legal assistance agreements.

Space Cooperation

ISRO and the UAE Space Agency signed a 2016 MoU for peaceful space exploration.

Indian Community

About 3.5 million Indians reside in the UAE, forming 35% of the population.

Multilateral Platforms

India and the UAE collaborate in IMEC, I2U2, and the UAE–France–India trilateral.

Challenges

Trade Imbalance
India’s deficit persists due to heavy oil imports from the UAE.
Regional Geopolitical Instability
Middle East tensions affect India’s interests and bilateral cooperation.

Labour & Migration Issues

Welfare concerns for the large Indian migrant workforce remain significant.
Divergent Foreign Policy Priorities
UAE’s positions on Iran or Pakistan can at times diverge from India’s diplomatic approaches.

Way Ahead

The visit aims to enhance cooperation in trade, defence, energy, technology, and people-to-people ties.
Both countries intend to deepen defence collaboration, training exchanges, and industrial linkages.
A strong Indian diaspora base will continue to drive cultural exchange and strengthen bilateral engagement across sectors.