G20 : Economic Cooperation ahead

India-Middle East-Europe Economic Corridor


From UPSC perspective, the following things are important :

Prelims level: India-Middle East-Europe Economic Corridor

Mains level: Not Much

economic corridor

Central Idea

  • PM’s recent announcement at the G20 Leaders’ Summit regarding the India-Middle East-Europe Economic Corridor signifies an ambitious project aimed at enhancing physical and digital connectivity across a vast expanse of the Eurasian subcontinent.

India-Middle East-Europe Economic Corridor

  • The India-Middle East-Europe Economic Corridor aims to establish connectivity across India, West Asia, and Europe, leveraging railway networks and shipping routes.
  • The project was jointly unveiled by PM Modi, US President Biden, Saudi Arabia’s Crown Prince Mohammed bin Salman Al Saud, and European Commission President Ursula von der Leyen during the G20 Summit in New Delhi.

Key Highlights of the project

  • Scope and Ideology: This initiative, championed by the US and India, encompasses connectivity and infrastructure spanning India, Saudi Arabia, the UAE, Jordan, Israel, and the European Union. It is hailed as a sustainable alternative to existing global connectivity initiatives.
  • Extension to PGII: Additionally, it is part of the broader Partnership for Global Infrastructure Investment (PGII), introduced by G7 countries to provide a sustainable alternative to BRI and address global infrastructure needs.
  • Congestion Mitigation: The corridor may potentially bypass the congested Suez Canal, offering a more efficient route for cargo ships.
  • Trade and Economic Integration: The Memorandum of Understanding (MoU) signed by India, the US, UAE, Saudi Arabia, France, Germany, Italy, and the European Union Commission underscores the project’s commitment to enhancing connectivity, logistics, clean energy production, and economic cooperation.
  • Historical Significance: European Commission chief Ursula von der Leyen described the corridor as “historic” and expressed enthusiasm about its potential.

Need for such project

  • Transformative Infrastructure: The project envisions a railway line across the Arabian Peninsula, with rail and shipping connectivity between India and Europe. Future expansions could include energy pipelines and optical fiber links.
  • Geopolitical Shifts: This initiative reflects emerging geopolitical trends, including India-US collaboration in the Middle East, breaking Pakistan’s veto, and evolving relations with Iran.
  • Deepening Arabian Engagement: The corridor provides an opportunity to strengthen India’s strategic ties with the Arabian Peninsula, notably with the United Arab Emirates and Saudi Arabia.
  • Historical Perspective: India’s historical role as a connector between Arabia and Europe is revitalized through this project.
  • Promoting Intra-regional Connectivity: The corridor aims to reduce tensions in the Arabian peninsula by fostering intra-regional connectivity, contributing to the concept of “Infrastructure for peace.”
  • Alternative to BRI: Positioned as an alternative to China’s BRI, the corridor’s success will depend on implementation speed and sustainability, both financial and ecological.
  • European Engagement: European Union’s involvement in the project makes it a major stakeholder, enhancing India’s integration with Arabia and Europe.
  • Trans-African Corridor: India’s growing engagement with Africa aligns with US and EU plans to create a Trans-African corridor, opening avenues for future collaboration.

Challenges and Uncertainties

  • Official timelines for project completion and details regarding funding remain undisclosed.
  • Clarity on the project’s alignment and the use of existing railway and port infrastructure in West Asia is awaited.

Global Implications

  • The initiative aligns with US-led efforts to scale the Partnership for Global Infrastructure Investment (PGII) and address infrastructure financing needs in low- and middle-income countries.
  • The project presents an alternative to China’s Belt and Road Initiative and could significantly strengthen connectivity between India and the Middle East.

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