G20: New US-backed Europe-Middle East-India transit link takes shape

A US-backed broad alliance of nations has unveiled an ambitious plan to build a new economic corridor that links India to Europe through the Middle East as an alternative to China’s Belt and Road Initiative (BRI).

Plans for the India-Middle East-Europe Economic Corridor were outlined by the leaders of the US, India, Saudi Arabia, the United Arab Emirates, France, Germany, Italy, and the European Union on the sidelines of the G20 Summit on Saturday.

The special session on Partnership for Global Infrastructure and Investment (PGII) and India-Middle East-Europe Economic Corridor (IMEC) was “aimed at unlocking greater investment for infrastructure development and strengthening connectivity in its various dimensions between India, Middle East, and Europe,” a statement issued by India’s ministry of external affairs said. 

PGII is a developmental initiative aimed at narrowing the infrastructure gap in developing countries as well as helping toward accelerating progress on SDGs globally, the statement said. 

The IMEC comprises an ‘Eastern Corridor’ connecting India to the Middle East, and a ‘Northern Corridor’ connecting the Middle East to Europe. It will include a railway and ship-rail transit network and road transport routes. This will enhance the transshipment of goods and services from Southeast Asia, through India, to the Middle East and Europe.

The participant nations also plan to lay cables for electricity and digital connectivity and pipelines for clean hydrogen export along the railway route. This corridor aims to secure regional supply chains, enhance trade accessibility, improve trade facilitation, and address environmental, social, and governance impacts.

Prime Minister Narendra Modi said that an important and historic partnership had been achieved with this corridor. 

“It will give a new sustainable direction to connectivity and development in the entire world,” Modi said, while emphasizing the importance of respecting the sovereignty and territorial integrity of all nations. 

He also emphasized the significance of financial viability over burdensome debt and the importance of adhering to environmental guidelines in connectivity projects. He noted that India’s vision for connectivity extends beyond regional borders, believing that it plays a crucial role in building mutual trust.

“India does not limit connectivity into regional borders. It has been India’s priority to increase connectivity with all regions. We believe that connectivity between various countries is not only a source of increasing trade but also for strengthening mutual trust,” he added.

Later, in a post on X, Modi said, “Charting a journey of shared aspirations and dreams, the India-Middle East-Europe Economic Corridor promises to be a beacon of cooperation, innovation, and shared progress. As history unfolds, may this corridor be a testament to human endeavor and unity across continents.”

President Biden hailed the finalization of a “historic agreement” for the new India-Middle East-Europe Economic Corridor, emphasizing its focus on sustainable and resilient infrastructure investments.

‘Really big deal’

“This is a big deal. This is a really big deal,” Biden said.

“As a key part of this corridor, we are investing in ships and rails, that extend from India to Europe connected by the UAE, Saudi Arabia, Jordan, and Israel. It will make it far easier to trade. I want to thank sponsors and particularly Prime Minister Modi and (Saudi Crown Prince) Mohammed bin Salman,” he said. 

Biden said the partnership was focused on building a sustainable, resilient infrastructure, making quality infrastructure investments, and creating a better future.

“This project is about more than just laying tracks. This is a game-changing regional investment,” Biden said in a post on X. 

The Saudi Crown Prince expressed anticipation for the economic corridor’s integration, while European Commission President Ursula von der Leyen called the agreement historic, noting the significant reduction in trade duration between India, the Arabian Gulf, and Europe.

French President Emmanuel Macron highlighted the project’s green aspects, including hydrogen, and German Chancellor Olaf Scholz pledged Germany’s commitment to its successful implementation.

Italian Prime Minister Giorgia Meloni celebrated the milestone, expressing Italy’s readiness to contribute and build bridges between the Mediterranean and Indo-Pacific regions, thereby enhancing global integration and economic growth.

Analysts said that it is clear that the corridor is an alternative to China’s BRI. However, it has other strategic and economic advantages.

‘Boosts India’s ties with Middle East’

Foreign policy analyst C. Raja Mohan wrote in The Indian Express that the new corridor breaks Pakistan’s veto over India’s overland connectivity to the West. 

It will deepen India’s strategic engagement with the Arabian Peninsula and mark the mobilization of Europe into the infrastructure development in the region, Mohan, a Senior Fellow at Delhi’s Asia Society Policy Institute, said.

As the corridor seeks to improve comprehensive connections spanning regions, it inherently harbors the potential to redefine diplomatic and economic relations on a large scale, said analysts. 

“There are several aspects to this rail link. One, it gives India an additional transit route to the Middle East to Europe through the Middle East. India already has one route through the Suez Canal. But this rail link gives Europe an additional route and access to India,” independent analyst Niranjan Marjani told Press Insider.

“Secondly, one can consider this development from the point of view of India’s overall relations with the Middle Eastern countries, particularly with the Arabian Peninsula that India has consciously developed over the last 10 years,” he added. 

Earlier, India’s relations with the Gulf were limited to oil trade, but India has expanded its engagements into strategic partnerships, Marjani said. 

“We are seeing the Middle Eastern countries are also increasingly engaging with India and are interested in investing in India. India and the Middle Eastern countries cooperate on security, climate change, and trade, as we saw in the Comprehensive Economic Partnership Agreement between India and UAE. So now their relationship with the Middle East is comprehensive, and this route is an extension of this relationship,” he added.

Rajesh Mehta, a senior expert at the New Delhi-based European Business and Technology Centre called the economic corridor a potential game-changer.

“It would not only boost infra development but serve in strengthening innovation and economic cooperation across continents and also serve as a rival to Chinese silk route,” Mehta said.