In an interview with Hindustan Times (HT), G20 Sherpa Amitabh Kant said that the India-Middle East-Europe Economic Corridor (IMEC), announced on the sidelines of the recently concluded G20 leaders’ summit in New Delhi, is likely to have far reaching global economic implications.
The IMEC project, if completed, is being looked at by analysts as a foil to China’s Belt and Road Initiative (BRI), a massive infrastructure project that has fueled concerns about Beijing’s increasing global footprint.
IMEC is a transnational rail and shipping route spread across two continents, which is expected to energize economic development through improved connectivity and economic integration between Asia, the Arabian Gulf and Europe.
It will include two separate corridors the eastern corridor connecting India to the Arabian Gulf and the northern corridor connecting the Gulf to Europe.
Many believe the IMEC will place India at the heart of trade flows from Southeast Asia to the Middle East and Europe, giving it both strategic and economic advantages.
The corridor will also secure supply chains, generate jobs and improve trade facilitation and accessibility.
‘This will give the whole world connectivity and development a sustainable direction,’ Indian Prime Minister Narendra Modi said when announcing the project. ‘It will drive sustainable development for the entire world.’
It will also go some way into adhering to the major geopolitical goals of policymakers in the US and Europe ,indirectly, to compete with China’s global infrastructure initiatives.
Mr Kant told HT about the IMEC that, ‘it has the potential to have a long term impact to deepen physical connectivity, unlock tremendous commercial opportunities, set new standards in infrastructure financing and development, and reshape global trading routes.’
Speaking of the enormous possibilities, The G20 Sherpa said, ‘The IMEC is also likely to have far reaching global economic implications,’ as quoted by HT.
According to Mr Kant, about half of the global economy and 40 percent of the world’s population are represented by the eight IMEC signatories of India, the US, UAE, Saudi Arabia, France, Germany, Italy and the European Union, some of whom also are part of the BRI agreement.
It remains to be seen how geopolitical equations change in a complex region such as the Middle East.
The initiative’s comprehensive approach encompasses connecting the key commercial hubs, supporting the development and export of clean energy, expanding energy grids and telecommunication networks, promoting clean energy technologies and enhancing Internet access for communities.
‘The project can be labelled as a green and digital bridge connecting continents and civilizations, designed to enhance efficiency, reduce costs, promote economic cohesion, create general jobs and cut greenhouse gas emissions,’ Mr Kant noted, as quoted by HT.
Bilateral meeting between India and Saudi Arabia after a G20 Success
Prime Minister Narendra Modi held a bilateral meeting with Saudi Crown Prince and Prime Minister Mohammed bin Salman Bin Abdulaziz Al-Saud, known as MBS, who was on a day-long State visit on Monday after the conclusion of the G20 Summit.
‘I am very glad to be here in India. I want to congratulate India for the G20 Summit a lot of announcements were made that will benefit both our countries, the G20 countries and the whole world. So I want to say to India, well done, and we will work to create a future for both countries,’ MBS said, on his visit.
India and Saudi Arabia on Monday signed eight agreements, days after the G20 summit, to boost cooperation in a range of areas, from energy to interconnectivity, digitalization and electronic manufacturing to finance and security.
At a media briefing later, Secretary in the Ministry of External Affairs (MEA) for Saudi Arabia, Ausaf Sayeed, said the two sides signed eight agreements, including on upgrading their hydrocarbon energy partnership to a comprehensive energy partnership for renewable, petroleum and strategic reserves.
‘The Crown Prince congratulated India for a very successful G20 meeting with a lot of major outcomes in the meeting The two sides expressed their happiness at the launching of the India-Middle East-Europe Corridor The PM also congratulated the Kingdom on becoming a full member of the BRICS,’ said Mr Sayeed.
The two sides also agreed to create a joint task force for US$100 billion in Saudi investment, half of which is earmarked for a delayed refinery project along Indias western coast, Mr Sayeed added.
The agreements include cooperation between Indias Central Vigilance Commission and Saudis anti-corruption unit, between investment entities, small and medium enterprises banks, between the National Archives of the two countries, and on desalination and renewable energy.
The two sides also discussed the possibility of trading in local currencies and expediting the negotiations for a free trade agreement between India and the Gulf Cooperation Council of which Saudi Arabia is a member.
Russia’s reaction to the IMEC announcement
Meanwhile, Russian President Vladimir Putin also said that the IMEC will in no way affect Russia, however, he added that it will benefit the country. Putin was responding to whether the IMEC initiative will affect the implementation of Russia’s and Chinese projects and what it means for Russia in general.
Putin who did not personally attend the G20 summit because of his ‘busy schedule’ noted ‘I think it is for our good; it will help us develop logistics.’
‘First, this project (IMEC) has been discussed for a long time, maybe for the past several years. Truth be told, the Americans joined it at the last minute. But I do not really see why they would want to be part of it, except maybe in terms of some business interest,’ Putin said as quoted by PTI.
In the meantime, the additional traffic of goods along this corridor will be in fact an addition to our NorthSouth project. We do not see anything here that could harm us in any way,’ he added.
‘The NorthSouth corridor goes to the Persian Gulf and then to India. If there is another route, I believe it includes Israel, we will be able to reach the Mediterranean through the Black Sea and use this corridor,’ he said.
‘I do not know, the colleagues who presented this project need to consider it carefully. This is only a memorandum of intent so far,’ he added.
Apart from this, the Russian President also praised PM Modi’s promotion of the “Make in India” programme, highlighting the importance of using domestically-made product and commended India’s policies under PM Modi’s leadership as a ‘positive example.’