The Indian rupee fell to its weakest-ever closing level on 11 May, the day Narendra Modi called for energy conservation, fewer gold purchases and reduced travel abroad as measures of domestic austerity. Shares tumbled across Mumbai’s exchange.
Days later, Modi boarded a plane to Abu Dhabi, the first stop on a six-day tour covering a transcontinental arc: the United Arab Emirates, the Netherlands, Sweden, Norway and Italy.
The contradiction dissolves once you account for the price the Iran war has exacted from India. Since 28 February, Iran’s closure of the Strait of Hormuz has largely withheld roughly 20% of the world’s seaborne oil from global markets.
India, the world’s third-largest oil importer, spent $123 billion on crude in the last financial year. The International Monetary Fund projects the country’s current account deficit at $84 billion in 2026. Modi’s tour traces transcontinental energy and technological partnerships as elements of a single programme, with the IMEC threading through the whole.
Abu Dhabi’s New Room to Navigate
The UAE’s departure from OPEC and its allies (OPEC+) proved advantageous for New Delhi. Abu Dhabi can now negotiate bilateral energy terms with India under unencumbered commercial arrangements. India’s ambassador to the UAE, Deepak Mittal, described the opening in explicit words: “OPEC exit opens new opportunities for UAE to deepen role in India’s energy security.”
Bilateral trade between India and the UAE has crossed $100 billion twice since the Comprehensive Economic Partnership Agreement of 2022, and over 4.5 million Indians call the UAE home. Taken together, both facts give negotiations a firm commercial foundation, reinforcing IMEC’s transcontinental maritime connection of Indian ports to Emirati terminals ahead of the overland European route.
The Corridor That War is Testing
The corridor has carried the aspirations of multiple governments. Researchers at the Italian Institute for International Political Studies reached a conclusion few in New Delhi would dispute: “No party to IMEC had more comprehensively oriented its regional strategy around the corridor’s success than India.”
The war has unmasked IMEC’s foundational assumption, as its architects presumed an enduring American readiness to secure the Gulf. The Gulf financial hubs of Abu Dhabi, Dubai and Riyadh that form IMEC’s capital engine lie within range of active military threat. The Gaza war violently bottlenecked IMEC’s accelerating maritime momentum between India and the UAE at the Arabian and Levantine overland stretches.
Fujairah’s geographic bypass of the strait gives it a notable structural advantage. Maritime traffic reaching Fujairah remains accessible during periods of maritime restriction, and Indian and Emirati officials have been developing port connectivity on that coastline with precisely that resilience in mind.
Europe Waits With a Deal Already Signed
The four European stops build on a concluded India–European Union Free Trade Agreement, signed in January after nearly two decades of intermittent negotiations. European Commission President Ursula von der Leyen described the agreement as “the mother of all trade deals”, spanning roughly two billion people and amounting to around a quarter of global gross domestic product.
Modi’s European agenda seamlessly integrated Dutch semiconductor acquisitions, Nordic green energy initiatives, and Italian Mediterranean defence engagements to reinforce the tour’s overall rationale.
The Architecture Work Remaining
The India–EU FTA commits both sides to advancing IMEC through connectivity in energy, green mobility and digitalisation. That commitment, alongside the corridor’s commercial reasoning, weathers the present disruption.
A resilient alignment of European supply-chain diversification, genuine Indian manufacturing ambitions, and formidable Gulf financial reserves mutually reinforces this foundation.
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