An India-Israel Corridor Is the Biggest Middle East Story Nobody Is Talking About

The wars that have since consumed the Middle East have put the project essentially on ice – but the disruption to maritime trade in the Persian Gulf and the Red Sea have, if anything, also made it more urgently needed by all parties.

The logic is indisputable. India is emerging as the world’s principal engine of economic growth. Europe, increasingly wary of its reliance on Russia since it invaded Ukraine in 2022, is trying to diversify critical economic and energy relationships. And governments increasingly view supply chains not merely as instruments of commerce, but as matters of national security.

Recent studies estimate that a completed corridor could reduce transit times between India and Europe by as much as 40 percent while cutting logistics costs by roughly 30%, lowering the cost of shipping a standard container to roughly $4,200 from around $6,000. Even at relatively modest volumes of 1.5 million containers annually, that would save approximately $2.7 billion every year in freight costs alone.

History suggests those savings are only the beginning, as great trade corridors create ecosystems. A corridor linking Indian manufacturing, Gulf capital, Israeli technology and European markets could attract new business spanning three continents.

For Israel, this is far more than an opportunity to collect transit fees at Haifa. IMEC could place the country inside the physical and digital architecture joining India, the world’s fastest-growing major economy, to Europe’s single market. It could turn Israel from a smallish, politically exposed endpoint into a necessary junction for Asian-European trade, data, energy and investment. That status would give Europe, India and the Gulf a durable material stake in Israel’s stability and regional integration, while directing infrastructure, capital and employment toward Haifa, the Jezreel Valley and logistics hubs in the north.

Moreover, a Saudi-Israeli normalization attached to a corridor of ports, railways, cables and energy links would become harder to reverse than a ceremonial agreement. Every train, customs arrangement, data connection and private investment would create constituencies with something concrete to lose from renewed estrangement. So normalization would be upgraded from a fragile political event into a structure of shared interests.

Such a normalization deal was widely believed to be imminent in the fall of 2023. But the Hamas invasion put the kibosh on that, sparking three years of war that scared Saudi Arabia off from any notion of cooperation with Israel.

There also lies a huge irony: The wars that derailed IMEC also underscored its indispensability.

The Houthi campaign against commercial shipping exposed the vulnerability of the Bab el-Mandeb, the narrow strait that connects the Red Sea to the Arabian Sea and ultimately to the Indian Ocean. Iran’s repeated threats against Gulf shipping reminded the world that the Strait of Hormuz remains one of the planet’s most sensitive choke points at a time when Russia’s invasion of Ukraine had already accelerated Europe’s search for more resilient trading relationships. Taken together, these crises have underscored the dangers of concentrating global commerce along a handful of vulnerable sea lanes or through politically unstable transit states.

Which means that even if theoretically Israel can be cut out of the deal, practically it’s not so easy.

Continuing to rely primarily on the Suez Canal leaves global trade exposed to exactly the vulnerabilities that the past three years have laid bare. Overland corridors through Iraq or Syria pass through states whose security remains fragile and whose politics remain heavily influenced by armed militias or outside powers. Lebanon, perpetually unstable, offers no realistic route at all. Turkey presents possibilities, but also geopolitical complications that many of the corridor’s participants would rather avoid. If democratic countries seek a reliable bridge between Asia and Europe, geography leaves remarkably few attractive alternatives.

Avital argues that the project should be understood less as a transportation route than as the backbone of a new economic ecosystem. Like the commercial arteries that transformed Singapore, Rotterdam and Dubai, it could attract investment in artificial intelligence, advanced manufacturing, digital infrastructure, energy, logistics and venture capital. Around major arteries, he says, economies grow.

It’s a prospect Israel’s government relishes. “If you look at the map you will see that it is possible to move gas by land from those countries, Saudi Arabia, Bahrain, Kuwait, to the Mediterranean via Israel en route to Europe,” the energy minister, Eli Cohen, said this week on Israel Radio. “The card of the Iranians on Hormuz and the Houthis in Bab-el-Mandeb will not be relevant in four or five years.”

Seen that way, Saudi-Israeli normalization becomes something larger than another Middle Eastern diplomatic achievement. It is one of the missing political links connecting India, Asia’s fastest-growing major economy with Europe’s largest integrated market. For Israel, missing that connection would mean watching other states design the region’s next economic architecture while it remains confined to a narrower security relationship with the United States and episodic trade with the rest of the world.

That broader strategic picture has been almost entirely obscured by war.

Israel has understandably focused on immediate security threats. Yet among what Avital says are the current government’s many failures has been its inability to preserve Israel’s place in this emerging economic architecture. While several European governments have appointed senior officials dedicated to advancing their role in the corridor, Israel has lacked a comparable national effort. That absence carries a concrete risk of being bypassed – for example, by moving the route north, through a perhaps stabilized post-war Syria.

If that occurs, Israel’s current geographical leverage could be lost for decades. Once ports, railways, industrial zones and data infrastructure are built elsewhere, capital rarely returns simply because politics improve.

Meanwhile, everyone is awaiting the end of the wars, and the project today resembles a compressed spring: immense strategic and commercial energy waiting for the political conditions that will allow it to be released. The economic logic has only grown more compelling, and every disruption in the Red Sea or the Gulf reinforces it.

Every crisis that threatens one of the world’s maritime choke points strengthens the case for diversifying trade routes, reducing dependence on maritime trade by shifting much of the journey over land enroute to Europe.

What may release this built-up energy is the election of a moderate Israeli government on Oct. 27. Rebuilding relations with Europe, restoring a credible political process with the Palestinians and reviving the possibility of Saudi normalization all would then enter the realm of possibility, Avital says.

And they would no longer be merely diplomatic goals but the missing ingredients in one of the most consequential economic projects of the 21st century – one that could anchor Israel permanently within the economic architecture linking Europe, the Gulf and India.

“The emphasis has to be on Europe as Israel’s anchor,” Avital says. “Israel is essentially a European country that should behave like a bridge to the East. This is the only vision for Israel that is alive. Any other vision is a ghetto where people fly from here to Miami.”

Dan Perry is the former chief editor of The Associated Press in Europe, Africa and the Middle East, the former chairman of the Foreign Press Association in Jerusalem, and the author of two books about Israel.