Economic corridor

ONE of the biggest outcomes of the G20 summit in New Delhi was the announcement of the India-Middle East-Europe Economic Corridor (IMEC). India, the USA, the UAE, Saudi Arabia, France, Germany, Italy and the European Union have signed a memorandum of understanding (MoU) to establish the IMEC, which will include the eastern corridor connecting India to West Asia and the northern corridor linking West Asia to Europe. Various stakeholders have hailed the initiative, with Prime Minister Narendra Modi describing it as a ‘major medium of economic integration between India, West Asia and Europe’ and US President Joe Biden calling it a ‘game-changing regional investment’.

The IMEC is unmistakably a counter to China’s multi-billion-dollar Belt and Road Initiative (BRI), which was launched with fanfare by President Xi Jinping a decade ago. The BRI ambitiously envisages connecting China with Southeast Asia, Central Asia, the Gulf, Africa and Europe with an extensive network of land and sea routes. However, it has drawn flak from various quarters, especially for imposing an unsustainable debt burden on smaller nations. It is significant that Italy, a signatory to the IMEC MoU, plans to pull out of the Chinese initiative.

China has every reason to be jittery about the new intercontinental connectivity project. In a typically ambivalent response, Beijing has stated that it welcomes the IMEC, so long as it doesn’t become a ‘geopolitical tool’. For India, which is basking in the success of the G20 summit, the IMEC might prove to be an engine of economic growth and a means to enhance its geopolitical influence. The new corridor can spur multilateral cooperation, particularly in the energy sector. With India and Saudi Arabia deciding to expedite implementation of the $50-billion West Coast refinery project, New Delhi is making the right moves to bolster its energy security amid the upheaval caused by the prolonged Russia-Ukraine war.