India is reassessing its trade corridors to Europe in light of the escalating U.S.–Israel war with Iran, which has introduced significant uncertainty into the region's logistics and trade routes [1]. New Delhi had been developing two major corridors: the International North–South Transport Corridor (INSTC), which connects India to Russia, Europe, and Central Asia via Iran's Chabahar Port, and the India–Middle East–Europe Economic Corridor (IMEC), linking India to Europe through Gulf ports and Israel's Haifa Port via a railway corridor [1].
Experts cited in the article suggest that only the IMEC corridor has a realistic future to support India's export ambitions, given the current geopolitical climate. Rafiq Dossani, an economist at RAND, stated, "If Israel and U.S. win, IMEC will likely be Israel's preference over the revival of Chabahar," highlighting the shifting priorities in regional connectivity [1]. IMEC has strong backing from key leaders: U.S. President Donald Trump called it "one of the greatest trade routes in history" during a meeting with Indian Prime Minister Narendra Modi, and Israel's Prime Minister Benjamin Netanyahu described it as the "largest cooperation project in our history" [1].
The uncertain future of Iran is central to the equation. Dossani noted that if Iran does not lose the war, it will remain under sanctions, and if it does lose, the benefits will be captured by the winners, making India's route through Iran a "dead end" [1]. Structural realities are reinforcing pessimism around the Chabahar route, with Chietigj Bajpaee of Chatham House pointing out that the Chabahar-Zahedan railway, a key component of INSTC due for completion in 2026, will likely face "indefinite delays" [1]. This uncertainty is compounded by doubts surrounding India's more than $120 million investment in the Shahid Beheshti terminal at Chabahar Port, as the U.S. waiver allowing India to operate the terminal despite sanctions is set to expire in April [1].
Bajpaee further stated that "IMEC may gain momentum now that the INSTC has stalled," suggesting that the crisis destabilizing the INSTC is making a case for India to double down on IMEC [1]. Goods trade between India and Europe typically transits via the Suez Canal, but disruptions caused by the conflict in the Middle East are prompting India to seek alternative routes [1].
CONCLUSION
The ongoing U.S.–Israel war with Iran is forcing India to reconsider its trade routes to Europe, with experts and policymakers increasingly favoring the IMEC corridor over the INSTC due to geopolitical instability and logistical delays. The shift could have medium market impact, particularly for trade flows between India and Europe, as India seeks to secure more reliable and efficient connectivity amid regional disruptions.