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India-Middle East-Europe Economic Corridor (IMEC): A new

model of globalisation
By IASToppers | 2023-09-23 14:00:00

Introduction:

The India-Middle East-Europe Economic Corridor (IMEC) can cut the time for economic
exchanges between India and Europe by 40%.
America and Europe observe IMEC as part of the G7 group’s Partnership for Global
Infrastructure and Investment (PGII), announced in 2022.
It will accelerate the development and integration of Asia, the Arabian Gulf, and Europe as a
new locus of global power.

About India-Middle East-Europe Economic Corridor (IMEC):

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[Ref - dailynewsegypt]

It comprises an Eastern Corridor connecting India to the Gulf region and a Northern Corridor
connecting the Gulf region to Europe.
Both ends have robust port, rail, and road infrastructure.
It will include a railway and ship-rail transit network and road transport routes.
India, USA, Saudi Arabia, UAE, European Union (EU), Italy, France, and Germany have signed
the Memorandum of Understanding (MoU) on IMEC.
It provides faster trade, transport, and infrastructural growth and for building a regional
architecture with strategically aligned nations.

Importance of IMEC for India:

The IMEC will generate economic growth while incentivising new investments in the region.
It is expected to increase efficiencies, reduce costs, generate jobs, and lower greenhouse gas
emissions.
It aims to connect the two continents (Asia and Europe) with commercial hubs and facilitate
development.
It will work for the export of clean energy, and strengthen food security and supply chains.
It will help link energy grids and telecommunication lines through undersea cables to expand
access to electricity and, Internet.
It could help India to reduce its reliance on China for trade and investment.
It will boost trade and reduce costs between the UAE, Saudi Arabia, India, and Europe.
India’s engineering exports will get boosted as its destinations are primarily the Middle
East and Europe.
India has the opportunity to create green hydrogen and green ammonia hubs near the coasts.
It will make export deliverables more efficient and less costly, thus adding to their
competitiveness.
If India’s free trade agreements with the Gulf Cooperation Council (GCC) and the EU come
through, IMEC will be a massive institutional catalyst for the economic fortunes of all the
partners.

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Role of United States of America (USA) in IMEC:

Geographically, the USA does not fall in IMEC’s area of operation.

However, diplomatically, it is a crucial driver of IMEC by bringing together a range of its
formal allies and strategic partners across Europe, the Middle East/West Asia, and
South Asia.
Investment by the USA is important for carrying out the project further.
The pre-existing India-Israel-UAE-US (I2U2) group and the US’s strategic goal of getting Saudi
Arabia to formally recognise Israel are tied to the idea of IMEC.

IMEC vs. Belt and Road Initiative (BRI):

Both IMEC and BRI are mega transnational projects. However, China’s new silk route is larger
in terms of scale.
IMEC is a multilateral cross-border and cross-oceanic connectivity, unlike unilateral BRI of
China.
China has signed BRI cooperation documents with more than 150 countries and over 30
international organisations.
It has galvanised nearly $1 trillion and created over 3,000 projects.
Some of the IMEC signatories such as Italy, Saudi Arabia and the UAE are also part of BRI.
The IMEC policy does not mention the BRI or China but it is parallel to BRI that linked China and
the West.
IMEC is seen as a more transparent and sustainable alternative to the BRI.

Issues with BRI:

BRI has issues such as allegations of it being a “debt trap” for developing countries.
Sri Lanka, which joined BRI is facing an economic crisis.
The Italian Prime Minister shared their intentions to pull out of the BRI on the sidelines of the G20
Leadership Summit in India.

Challenges in implementing IMEC:

Planning: The first and foremost challenge is to create a firm plan to establish the corridor.
Geopolitical challenges: The corridor also passes through Jordan and Israel which brings
geopolitical challenges, which would require a fine balance of economic and diplomatic
manoeuvring.
Committed countries to BRI: Italy, Saudi Arabia and the UAE are part of the BRI and keeping
balance between both will be crucial.
Economic challenges: Huge investments will be required to finalise and implement the project.

Conclusion:

The enhanced infrastructure from IMEC would boost economic growth, provide employment, and foster
relations between the participant countries. it will help bring countries in the Middle East together and
establish that region as a hub for economic activity instead of as a “source of challenge, conflict or crisis"

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as it has been in recent history.

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