The India-Middle East-Europe Economic Corridor (IMEC) Project was signed at the G20 Summit in New Delhi. The project holds significant geopolitical and economic implications for India. Read here to learn more.
The IMEC project was launched by India, the U.S., UAE, EU, France, Italy, and Germany signed a memorandum of understanding to establish the India-Middle East-Europe Economic Corridor (IMEC), on similar lines to China’s BRI during India’s G20 presidency.
Many details are being ironed out and multiple route options are being considered. The war in Gaza is one of the biggest hurdles for the project as of today.
The project forms part of the Partnership for Global Infrastructure and Investment (PGII). PGII is a values-driven, high-impact, and transparent infrastructure partnership to meet the enormous infrastructure needs of low and middle-income countries.
India-Middle East-Europe Economic Corridor (IMEC) Project
The IMEC can be seen as part of a broader strategy to improve global trade links, reduce transportation costs, and diversify supply chains.
- It draws inspiration from historic trade routes like the Silk Road, adapting the concept to modern geopolitical and economic landscapes.
- The corridor seeks to leverage the strategic locations of India, the Middle East, and Europe to boost trade, economic growth, and political cooperation.
The proposed IMEC will consist of railroad, ship-to-rail networks (road and sea), and road transport routes (and networks) extending across two corridors:
- The East Corridor – connecting India to the Gulf, and
- The Northern Corridor – connecting the Gulf to Europe
The IMEC corridor will also include an electricity cable, a hydrogen pipeline, and a high-speed data cable.
- The ports that could be connected on the west coast of India are Mundra (Gujarat), Kandla (Gujarat), and Jawaharlal Nehru Port Trust (Navi Mumbai).
- In the Middle East, at least five ports have been shortlisted to be connected to the Indian ports which include Fujairah, Jebel Ali, and Abu Dhabi in the UAE as well as Dammam and Ras Al Khair ports in Saudi Arabia.
- Then onwards to Haifa [ort in Israel, and Europe, Piraeus port in Greece, Messina in South Italy, and Marseille in France.
- The onward rail route connectivity from five ports in UAE and Saudi Arabia stretching up to Haifa port in Israel will be a mix of already existing Brownfield projects and fresh Greenfield projects to connect missing links.
Significance of IMEC
Transportation of products and services from India to the United Arab Emirates, Saudi Arabia, Jordan, Israel, and Europe and back would be made possible by IMEC.
- Overall, it is anticipated that the corridor will improve economic unity, create employment, cut greenhouse gas emissions, lower expenses, and promote efficiency (concerning transit).
A transformative integration of Asia, Europe, and the Middle East is anticipated as a result.
- From Mumbai, Indian goods shipped by this route could arrive on the European mainland in as less as 10 days – 40% faster than through the Suez Canal maritime route.
Israel-Gulf relations: Because of divergent views on the Israel-Palestine issue, Saudi Arabia and Israel do not have official relations.
- Only Egypt, Jordan, the United Arab Emirates, Bahrain, and Morocco are officially recognized as diplomatic partners of Israel. This puts special emphasis on the transportation network, which aims for multifaceted integration.
India-Pakistan relations: IMEC bypasses Pakistan, breaking its influence over India’s overland connectivity to the West, a hurdle persistently faced in the past.
- It will help strengthen India’s engagement with the Arabian Peninsula and promote regional connectivity in the politically volatile region.
Why in the news?
At the Raisina Dialogue 2024 inauguration, the Greek Prime Minister said that India and Greece should persevere with the India-Middle East Economic Corridor (IMEC) despite the Israeli war in Gaza destabilizing the peace project plans.
The project was discussed amongst other plans to strengthen bilateral ties in trade, finalize a mobility and migration pact to regulate legal migration, as well as cooperate on the co-production and co-development of military hardware.
Challenges
The corridor passes through regions with complex geopolitical issues, including conflicts and rivalries. Navigating these challenges requires diplomatic skills and regional cooperation.
It is an extremely intricate program that will necessitate standardizing everything.
- For example, trains have to operate on the same gauge, engines ought to employ comparable technology, and containers ought to have comparable sizes.
- To ensure smooth traffic levels, crucial technical aspects have been identified and preliminary alignments are being completed. But doing this will need a lot of work.
Chinese presence cannot be wished away along the IMEC route, even though the initiative has been suggested as a response to China’s Belt and Road Initiative.
- The reason for this is that China Ocean Shipping (Group) Company, a state-owned enterprise in China, is in charge of the Piraeus port.
- Furthermore, many packages for Etihad Rail’s Phases One and Two have been approved for Chinese enterprises like as PowerChina, China State Construction Engineering Corporation, and others.
The all-sea route is convenient as it is assumed that the cargo will land from point to point. It moves seamlessly without any obstructions.
- However, in the alternatively proposed IMEC, the number of times the cargo will get offloaded as it changes hands from ship to rail will increase the handling costs which include terminal-handling charges, container yard charges, and so on.
Egypt, which could lose revenue if the Suez Canal is bypassed, could also raise objections to the plan.
- Although Egypt was one of the special invitees at the G-20, it was not among the countries that launched the Memorandum of Understanding (MoU).
Way forward
The India-Middle East-Europe Economic Corridor represents a vision for a more interconnected world that leverages geography for economic gain.
Its realization depends on collaboration between countries, international organizations, and the private sector.
If successful, the IMEC could become a pivotal economic artery in the global trade system, benefiting not just the regions it directly connects but also contributing to global economic stability and growth.
As this is a forward-looking project, continuous monitoring of geopolitical, economic, and environmental developments will be essential to assess its feasibility, progress, and impact over time.
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-Article by Swathi Satish
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