Calev’s Newsroom: Israel, India and UAE forge a new trade route

At the end of 2021, Dubai’s DP World stepped back from a bid to operate the newly privatised port in Israel’s Mediterranean coastal city of Haifa. The move actually helped pave the way for a more significant development in the economies of Israel, the UAE and a third nation, India: the creation of a new trade route and commercial corridor linking South East Asia with the Middle East and Europe.

India’s Adani Group stepped in, and together with Israel’s Gadot Group paid $1.18bn to acquire the operating lease of the original Haifa port facility until 2054. That investment reflected the growing commercial ties between Israel and India, which reached $6.3bn in trade in 2021.

And something more as well: Adani’s deal was announced the same day that the leaders of Israel, the UAE and India held a virtual summit in Jerusalem with the visiting US President Joe Biden, to inaugurate the I2U2 Group – a new global bloc comprised of those four nations aimed at promoting “joint investments and new initiatives in water, energy, transportation, space, health, and food security.’’

As the I2U2 statement indicates, there are many facets of economic integration and growth contained within the Israel-India-UAE triangle. For example, all three are global leaders within the tech industry, but wherein Israel and the UAE are dynamic hubs of innovation and R&D, India’s population offers those relatively small nations a vast pool of potential manpower and the opportunity to develop there back-office and manufacturing centres.

An International Federation of Indo-Israel Chambers of Commerce was launched last year, headquartered in Dubai, with estimates that trilateral trade between the three countries could reach $100bn by 2030.

The Abraham Accords opened up the possibility of extending that India-UAE trade route further west, right to the shores of the Mediterranean and the doorstep of European markets. One of the projects under discussion between the Israeli and Emirati governments is a train line extending from the UAE to Israel. Such a project could be done by revitalising and extending historic track-routes already existent in Jordan and Saudi Arabia. The upside would be major, significantly cutting the shipping times of Asian freight across the Middle East to Europe that currently has to rely on passage through the Suez Canal.

From this perspective, India’s investment at Haifa port makes perfect sense as a forward-looking move in its trade policy. In recent years China has used its Belt-and-Road-Initiative, funding global infrastructure projects, to create a modern Silk Road servicing its own economic interests. Now the constellation of Israel, India and the UAE has the opportunity to put a modern spin on the southern half of that ancient trade route, linking its ports together in a caravan of goods fit for the 21st century.