The extraordinary level of hostilities between Israel and Hamas are expected to cast a shadow on two of the major initiatives that the country has launched with India and other stakeholders. A highly placed source here said that both the I2U2 (India, Israel, US. .and United Arab Emirates) and IMEC (India Middle East EU Economic Corridor) that were aimed at creating new partnerships for India’s post-COVID economic plans are expected to suffer because of the Hamas attack on Israel.
“Both I2U2 and IMEC are expected to be impacted. We are carefully observing the situation,” said an official when asked whether the attack by Hamas had placed a question mark on Israel’s ability to provide stable conditions for mega infrastructure and financial initiatives. I2U2 was started in October 2021 and it found concrete expression when leaders of the four participating countries issued a joint statement in July 14, 2022 prioritising areas like digital connectivity, energy, agriculture and infrastructure.
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The I2U2 was planning to begin food parks in Gujarat and Madhya Pradesh and was expected to focus on a hybrid renewable energy project in Gujarat. The July 2022 statement mentioned that the US would invest $2 billion in Indian projects that are backed by Israeli technology. The ambitious initiative was being viewed as an outcome of the Abraham Accords of September 15, 2020 that was aimed at creating conditions of cooperation between Israel and Arab states like the United Arab Emirates and Bahrain. Fives weeks after that, the Donald Trump administration brokered another agreement between Israel and Sudan that is also part of the Abraham Accords. These accords were historic as they were the first agreements between Israel and Arab states in over quarter of a century.
These accords however did not address the issue of Palestine and it was felt that the long simmering cause would adjust with the changing dynamics between Israel and other Arab countries. Following the latest flare up, Palestnian Authority’s ambassador Adnan Abu Alhaijaa has called upon India to intervene and ensure the “two-state solution” is implemented for the conflict to end. “Palestinians want a normal life like others. Our people will not live like slaves while Israelis continue to push foreing settlers into our territory,” said Ambassador Alhaijaa.
Israel’s future hazy
The senior Indian official did not go into details but confirmed that New Delhi is concerned about the way the future of Israel will shape up after the surprise attack by Hamas left hundreds of Israelis dead and wounded. The official pointed out that the IMEC agreement that was launched on September 10 on the sidelines of the G-20 summit here is also being reevaluated in the current backdrop. While IMEC has just been announced and has not led to any major step, the I2U2 has seen some meetings and exchanges.
It is understood that attracting private investment to mega regional initiatives may become difficult if widespread conflict and destruction continue in Israel and Gaza Strip. This has the potential to jeopardise Israeli relations with Arab countries, including those within the Abraham accords. Israel has been a solid security partner of India during the recent years but more importantly it has become economically equally attractive which even drew the Adani group which became the owner of the Haifa port.
After Saturday’s attack, shares of Adani Ports fell 5% amid concerns about the vulnerabilities of the Haifa Port. “We are closely monitoring the action on ground which is concentrated in South Israel, whereas Haifa port is situated in the North. We have taken measures to ensure safety of our employees and all of them are safe. We remain fully alert and prepared with a business continuity plan that will enable us to respond effectively to any eventuality,” said a spokesperson for Adani Ports and SEZ Limited. Expanding economic ties with Israel prompted India to reach out to other Mediterranean powers like Greece that recently hosted Prime Minister Narendra Modi.
