First Round of Talks on India-Middle East-Europe Economic Corridor

General Studies Paper-2

Context: The Indian delegation concluded its first round of talks with UAE officials on developing the ambitious India-Middle East-Europe Economic Corridor (IMEEC).

India-Middle East-Europe Economic Corridor (IMEC)

• Participants: During the Delhi G20 Summit, India, USA, UAE, Saudi Arabia, France, Germany, Italy and the European Union signed a Memorandum of Understanding (MoU) to establish the India-Middle East-Europe Economic Corridor.
• Objective: The corridor will encourage and provide impetus to economic development through enhanced connectivity and economic integration between Asia, West Asia, the Middle East and Europe.

Components

• The India-Middle East-Europe Economic Corridor will consist of two separate corridors,
  • The East corridor connecting India to West Asia/Middle East and
  • The Northern corridor connecting West Asia/Middle East to Europe.
• The project would involve the building of a railway line across the Arabian Peninsula through the United Arab Emirates and Saudi Arabia and develop shipping connectivity to India and Europe on either end of this corridor.
• The corridor could be further developed to transport energy through pipelines and data through an optical fiber link.

Ports Which are Part of IMEC

• India: Ports in Mundra (Gujarat), Kandla (Gujarat), and Jawaharlal Nehru Port Trust (Navi Mumbai).
• Europe: Piraeus in Greece, Messina in Southern Italy, and Marseille in France.
• Middle East: Ports include Fujairah, Jebel Ali, and Abu Dhabi in the UAE, as well as Dammam and Ras Al Khair ports in Saudi Arabia.
• Israel: Haifa port.
• Railway Line: The railway line will link Fujairah port in the UAE to Haifa port in Israel, passing through Saudi Arabia (Ghuwaifat and Haradh) and Jordan.

Significance

• Economic Development: By linking Asia, West Asia, the Middle East and Europe through enhanced connectivity and economic integration, the corridor aims to give a boost to economic development in the regions.
• Connectivity: The corridor will include a rail line, which, upon completion, will provide a reliable and cost-effective cross-border ship-to-rail transit network.
  • The rail line will supplement the existing multi-modal transport routes enhancing trans-shipment of goods and services from South East Asia through India to West Asia/Middle East and Europe.
• Eco-friendly Infrastructure: It places emphasis on developing environmentally friendly infrastructure.
• Transformative Integration: It intends to increase efficiency, reduce costs, secure regional supply chains, increase trade accessibility, enhance economic cooperation, generate jobs and lower greenhouse gas emission, resulting in a transformative integration of Asia, Europe and the Middle East (West Asia).

Opportunities for India

• Alternative to BRI: It is an alternative to China’s Belt and Road Initiative (BRI), which seeks to establish trade and infrastructure networks connecting Asia, Europe, and Africa.
• Bypassing Pakistan: IMEC breaks Pakistan’s veto over India’s overland connectivity to the West. Since the 1990s, India has sought various trans-regional connectivity projects with Pakistan. But Pakistan was adamant in its refusal to let India gain access to land-locked Afghanistan and Central Asia.
• Indo-US collaboration in the Middle East: This project has broken the myth that India and the United States might work together in the Indo-Pacific but not in the Middle East.

Hurdle before IMEC

• The Israel-Palestine conflict has put a pause on the normalization of Arab-Israel relations which is a key element of the multi-nation initiative.
• Vulnerability of the Strait of Hormuz: The entire trade of the IMEC architecture flows through the Strait of Hormuz and with Iran’s proximity and control over the strait, the risk of disruptions remain very high.
• The security challenges in the region have made other partners reluctant to invest in the project.

Way Forward

• The geopolitical concerns need to be managed by striking a delicate balance in accommodating the geopolitical interests of the participating nations and addressing potential political sensitivities.
• There is also a need to maintain the required security apparatus as the project passes through certain unstable regions of the world.