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India-Middle East-Europe Economic Corridor (IMEE-EC)

GS2/ GS3 Paper 

 Syllabus: Multilateral Initiatives/ Impact of LPG

 

Source: TOI, IE,

 Context: On the sidelines of the G20 Summit in New Delhi, an MoU was signed between India, the US, Saudi Arabia, the European Union, the UAE, France, Germany, and Italy to establish the India-Middle East-Europe Economic Corridor (IMEE-EC).

 

What is IMEC?

The India-Middle East-Europe Economic Corridor (IMEE-EC) is an infrastructure development project that aims to create connectivity through rail and shipping networks, energy cables, and data links.

  

More about IMEC EC:

India-Middle East-Europe Economic Corridor (IMEE-EC)
Participating CountriesIndia, Saudi Arabia, UAE, France, Germany, Italy, USA, EU
ObjectivesIMEC seeks to boost trade, clean energy, and economic growth while providing an alternative to China’s Belt and Road Initiative (BRI)
Part of It is part of the Partnership for Rail and Shipping Corridors Global Infrastructure Investment (PGII) and focuses on enhancing global trade and cooperation through critical infrastructure development.
Corridor ComponentsRailway lines (make trade between India and Europe 40% faster).

 

Electricity cable and a clean hydrogen pipeline to foster clean energy trade.
High-speed data cable to link innovative digital ecosystems in the world and create business opportunities
Corridor SegmentsEastern Corridor connecting India to the Arabian Gulf, Northern Corridor connecting Arabian Gulf to Europe

 

Benefits for IndiaEnhancing food security, regional supply chains, trade accessibility, environmental considerations, economic cohesion, job creation, and reduces greenhouse gas emissions.
Reliable cross-border ship-to-rail transit network connecting India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.
It offers India a crucial role in global commerce, digital communication, and energy networks vis-à-vis China’s BRI
Geographical Advantage: It firmly positions India along the trade route spanning South East Asia to the Gulf, West Asia, and Europe.

 

What is the PGII initiative?

The PGII (Partnership for Global Infrastructure Investment) initiative (announced in 2021 during the G7 summit in the UK) is a collaborative effort by G7 countries to fund infrastructure projects in developing nations.

  • It serves as an alternative to China’s Belt and Road Initiative (BRI) and aims to mobilize funds for critical infrastructure development, focusing on transparency, sustainability, and gender equality.
  • PGII emphasizes loans over charity, benefiting both lending and receiving countries.

 

 

Other initiatives under PGII announced previously are:

PGII InitiativesDescription
Trans-African CorridorIt will connect the port of Lobito in Angola with Katanga province in Congo and the copper belt in Zambia
Clean Energy Projects in IndonesiaThe PGII announced clean energy projects in Indonesia to support sustainable energy sources and infrastructure development.
Investments in India’s Health InfrastructureThe US government’s International Development Finance Corporation (DFC) pledged over $15 million to invest in India’s health infrastructure, including eye clinics and women’s hygiene products.
EU’s Global Gateway ProgramThe European Union (EU) committed to activating 300 billion USD in investments for critical connectivity projects, with a focus on Africa and various regions around the world.

 

About the BRI project:

China began the Belt and Road Initiative in 2013 under its President Xi Jinping. It aims to revive the ancient trade routes crossing to and from China–from Rome in Europe to East Asia. Under this, the Chinese government helped in providing loans for infrastructure projects to various countries, and in many cases, Chinese companies were awarded contracts for carrying out the work.

Issues with BRIDescription
Unsustainable DebtsAccording to a 2019 World Bank report, among the 43 corridors, 12 could face a situation where debts were not sustainable
Environmental ConcernsBRI projects have raised concerns about environmental degradation and their impact on ecosystems.
CorruptionThere have been allegations of corruption in some BRI projects, affecting their credibility.
Critics argue that the BRI lacks transparency in agreements and financing, making costs unclear.
Territorial DisputesE.g., BRI included the China-Pakistan Economic Corridor, which connected Kashgar in China with the Gwadar port in Pakistan via Pakistan-occupied Kashmir
Varying BenefitsDifferent countries have varying opinions on the benefits of enhanced trade connectivity through BRI.
G7 AlternativeThe G7’s PGII initiative aims to provide a more transparent and sustainable alternative to the BRI.

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Mains Links:

The newly tri-nation partnership AUKUS is aimed at countering China’s ambitions in the Indo-Pacific region. Is it going to supersede the existing partnerships in the region? Discuss the strength and impact of AUKUS in the present scenario. (UPSC 2021)

China is using its economic relation and positive trade surplus as tools to develop potential military power status in Asia” In the light of this statement. Discuss its impact on India as her neighbour. (UPSC 2017)