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India-Middle East-Europe Economic Corridor at G20
Several nations, including India, the US, Saudi Arabia, the European Union, the United Arab Emirates, France, Germany, and Italy, signed a Memorandum of Understanding (MoU) to build the India-Middle East-European Economic Corridor (IMEC) on the sidelines of the G20 Summit 2023 in New Delhi. Concerns about unsustainable debt and the geopolitical ramifications of China’s Belt and Road Initiative (BRI) projects led to the decision.
India-Middle East-Europe Economic Corridor (IMEC)
In order to encourage economic integration between Asia, the Arabian Gulf, and Europe, IMEC is envisioned as a network of transportation corridors made up of rail lines and sea lanes. This initiative is a part of the Partnership for Global Infrastructure Investment (PGII), a BRI substitute that seeks to finance infrastructure projects in underdeveloped nations through public and private contributions.
This corridor will connect Europe, the Middle East, and Asia through railways and the sea. The key objectives of this ambitious project are to connect commercial hubs, support the development and export of clean energy, and expand undersea cables, energy grids, and telecommunication lines.
India-Middle East-Europe Economic Corridor Member Countries
Other participants besides India will be Saudi Arabia, the United Arab Emirates, France, Germany, Italy, the United States, and the European Union.
India-Middle East-Europe Economic Corridor Map
The India-Middle East-Europe Economic Corridor (IMEC) will be comprised of two separate corridors:
- The east corridor connecting India to the Arabian Gulf and
- The northern corridor connecting the Arabian Gulf to Europe.
India Middle East Europe Economic Corridor Significance
A railway route will be a part of the arrangement, and once it is finished, it will offer a cross-border ship-to-rail transit network that is dependable and affordable to add to the current maritime and road transport networks. The movement of products and services to, from, and between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe will be made possible by this. The members plan to install a cable for digital connectivity and energy together with a pipe for clean hydrogen export along the train track.
This corridor will protect local supply chains, improve trade accessibility, and allow for a greater focus on the effects on the environment, society, and government. It will be created to boost economic cohesiveness, cut greenhouse gas emissions, create jobs, and increase efficiency, resulting in a dramatic integration of Asia, Europe, and the Middle East.
By bridging a dangerous global gap, the corridor “enables greater prosperity and better connectivity for key regions around the world.” The initiative will give the participating nations the chance to play a significant part in the “global connective tissue of commerce, digital communications, and energy.”
India Middle East Europe Economic Corridor Benefits
The India-Middle East-Europe Economic Corridor will aid in fostering global supply chains and food security among emerging nations. In accordance with the MoU, this corridor will connect Europe to the Arabian Gulf via a North Corridor and India to the Arabian Gulf via an East Corridor. A railway network will be included in the proposal to supplement the current marine and road links.
This railway route, which primarily travels across the Middle East, also includes plans for the installation of power cables and clean hydrogen pipes. The project aims to facilitate increased trade, notably in energy products, among the participating nations. This initiative is viewed as a substitute for China’s massive Belt and Road Initiative Project. With the Belt and Road Initiative, China sought to integrate the majority of the world’s economies.
Geographical Advantage for India
India stands to gain greatly from the ‘India-Middle East-Europe Shipping and Railway Connectivity Corridor’ (IMEE EC), which firmly places it along the commercial route spanning South East Asia to the Gulf, West Asia, and Europe. This strategic location provides India with significant strategic and economic advantages and creates significant opportunities for the logistics and transportation sector.
Additionally, it provides a transit option that is more effective and affordable, supporting India’s commerce and export activities. This corridor can be built with an emphasis on sustainability, coinciding with India’s objectives for its “green transition,” enhancing its regional influence and enabling Indian businesses to contribute fairly to infrastructure development. Additionally, the corridor claims to safeguard supply chains, create jobs, and improve accessibility and trade facilitation.
India Middle East Europe Economic Corridor & Countering China
This initiative is being undertaken as Saudi Arabia and the United Arab Emirates, two longtime US allies, are deepening their ties with China. These nations want to strengthen their ties to the east, where economies are expanding quickly. China has recently improved relations with the Middle East as well, aiding in the negotiation of an agreement between Saudi Arabia and Iran early this year.
The oil-rich Gulf states declared their intention to join the organization during the BRICS Summit 2023, with China taking the lead in this action. The strategy is viewed as a bold attempt by Washington to compete with China’s Belt and Road initiative, which aimed to link more of the world to that nation’s economy. Recent issues with China’s BRI have been brought about by an increase in loan defaults and a slowdown in investment.
Partnership for Global Infrastructure Investment (PGII)
The G7 (or Group of Seven) conference in the UK in June 2021 was the first public announcement of the infrastructure plan. The United Kingdom, the United States, Canada, France, Germany, Italy, Japan, and the European Union (EU) make up the G7 Countries. The concept was dubbed the Build Back Better World (B3W) initiative by US Vice President Joe Biden. However, little progress was noted.
The PGII was formally introduced in 2022 during the G7 conference in Germany as a joint initiative to aid in funding infrastructure projects in underdeveloped countries through public and private investments. “We aim to collectively mobilize nearly $600 billion from the G7 by 2027 to invest in critical infrastructure that enhances lives and yields tangible benefits for all of our people,” the United States stated.
In essence, the G7 resolved to provide an alternative mechanism for it in response to the infrastructure projects being carried out and sponsored by China under the Belt and Road Initiative (BRI) on a global scale. The PGII and the BRI both have the explicit goal of assisting nations in obtaining money for the construction of vital infrastructure, like as roads, ports, bridges, communication systems, etc., in order to increase international trade and cooperation.
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