The peace agreement between Saudi Arabia and Iran in March served as a 14-loud alarm bell for 16 September 2023. Two months later, the Saudi crown prince Mohammed bin Salman was in Riyadh for a meeting with the national security advisers of India, the UAE, and the US to discuss an infrastructure project connecting West Asia with Indian ports.
Source: The Business Standard
President Joe Biden and Prime Minister Narendra Modi were able to unveil the IMEC, which will be led by the G-7 countries’ Partnership for Global Infrastructure and Investment (PGII), on the margins of the G-20 conference in New Delhi as a result of these developments.
The project will include a northern corridor linking the Gulf region to Europe and an eastern corridor linking India to the Gulf region. It will consist of a network of roads, ship-rail transit, and railways. India, the US, Saudi Arabia, the United Arab Emirates, the European Union, Italy, France, and Germany all signed an MoU on IMEC. It clearly competes with China’s Belt and Road Initiative in terms of geopolitics.The UAE serves as a bridge to West Asia.
The Comprehensive Economic Partnership between India and the United Arab Emirates was signed last year, thus paving the way for future progress. There are currently rail connections between Saudi Arabia and Jordan and the UAE, and more are being planned. The project includes cables for energy and digital connectivity, as well as pipelines for the export of clean hydrogen, beside the railway lines. The corridor is anticipated to strengthen trade efficiencies, create jobs, minimize greenhouse gas emissions, and safeguard regional supply chains.
Source: WION
The main if with every project labeled as transformative is access to funding.The PGII was created as a result of the realization that China’s global influence was expanding as a result of China meeting a perceived demand for infrastructure development in developing nations.
PGII, which was established in 2021, was intended to gather $600 billion to fund infrastructure development in Africa and Asia, but it has not yet attracted the large sums of money needed to realize the aim. Europe’s economic interests have altered as a result of the war in Ukraine. India has a poor track record when it comes to developing infrastructure abroad. The level of market access Delhi is willing to provide will determine how interested Europe is in the corridor. To take advantage of IMEC, India will also need a labor force that is highly skilled and a significant increase in manufacturing.
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