New Delhi: India, the US, the UAE, Saudi Arabia, European Union (EU), Italy, France and Germany came together Saturday to launch an ambitious infrastructure plan — the ‘India-Middle East-Europe Economic Corridor’ — that seeks to reshape the trade route between the Gulf, Europe and South Asia, connecting them by rail and sea links.
The project, announced by Prime Minister Narendra Modi on the sidelines of the ongoing G20 Summit here, is being viewed as a counter to China’s Belt and Road Initiative (BRI), which was rolled out in 2013 by Chinese president Xi Jinping. US president Joe Biden hailed the ‘India-Middle East-Europe Economic Corridor’ as “a big deal, a really big deal”.
Biden also thanked president Mohamed bin Zayed Al Nahyan of the UAE for his role in the conception of the project. Reports suggest that it was the UAE which brought up the idea of such an economic corridor during talks with the Biden administration a few months back.
Government sources, meanwhile, told ThePrint that the proposed infrastructure project is a collaborative effort and had come up for discussion during the National Security Advisors’ meeting in Saudi Arabia in May this year, which was also attended by India’s NSA Ajit Doval.
More countries, including Greece, could be included in this mega project going forward, sources said, adding that this is a historic and first of its kind infrastructure initiative involving India, the UAE, Saudi Arabia, EU, France, Italy, Germany and the US.
The project will involve transit by ship between India and Saudi Arabia, followed by a rail link to the UAE and likely to Jordan from where the shipment will move by sea to Turkey and further by rail.
Government sources told ThePrint that the India-Middle East-Europe Economic Corridor will consist of two separate corridors — the Eastern Corridor, connecting India to West Asia/Middle East, and the Northern Corridor, connecting West Asia/Middle East to Europe.
It will include a rail line which, upon completion, will provide a reliable and cost effective cross-border ship-to-rail transit network to supplement the existing multi-modal transport routes, while also enhancing transshipment of goods and services between South East Asia through India to West Asia/Middle East Europe, sources added.
Further, sources said the project places India firmly on the route of trade flows from South East Asia to the Gulf, West Asia and Europe, giving it significant strategic and economic advantage, besides creating huge opportunities in the logistics and transportation sector.
“It provides us with a faster and cheaper transit option compared to what we have currently, giving a boost to our trade and exports. It can be developed as a green corridor, enhancing our green transition objectives, strengthening our standing in the region and allowing our companies to participate on an equal footing in infrastructure construction. The corridor will also secure supply chains, generate jobs and improve trade facilitation and accessibility,” said one government source.
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‘Finer details to be worked out’
Officials in the Ministry of Ports, Shipping and Waterways said while finer details of the project will be worked out in the coming days, the project could entail Dubai port (Jebel Ali port) being the primary link between the UAE and India.
“Between India and Dubai, it will be a sea link likely through the Kandla and JNPT ports. Traditionally, both Kandla and JNPT ports have had a lot of trade movement with the Dubai port. Among the private ports, Mundra port in Gujarat has a lot of trade movement with Dubai port and can be part of the connectivity link,” said a senior ministry official who did not want to be named.
The official added that though there are other ports on India’s western coastline, such as the ones in Mumbai and Goa, they are small in size and are not used to handling large volumes of maritime traffic.
On the other hand, the Dubai port will also likely be the starting point for the rail link being proposed as part of the project, connecting the UAE to Saudi Arabia, Turkey, Israel and Europe, the official said.
“Once a formal announcement is made, the finer details of the project will be worked out,” added the official.
And though India is likely to provide help in the development of rail infrastructure as part of this massive project, officials in the Ministry of Railways are reluctant to share any details at this moment.
In response to a question about the project during an interaction with the media onboard Air Force One late Thursday night, US National Security Advisor Jake Sullivan, who is accompanying Biden to India for the G20 Leaders Summit, had said that Washington has “invested effort into with our partners”.
“We believe that connectivity from India, across the Middle East, to Europe is incredibly important and will bring a significant number of economic benefits, as well as strategic benefits, to all of the countries involved…”
The news portal Axios, which broke the story in May this year, had then quoted sources to report that the project would “include connecting Arab countries in the Levant and the Gulf via a network of railways that will also connect to India through seaports in the Gulf”. It added that If Saudi Arabia and Israel normalise relations in the future, Israel could also be part of the railway project and broaden its reach to Europe via Israeli seaports.
The idea for the project came up in a forum called the I2U2, which includes the US, Israel, the UAE and India. This forum was established in 2021 to discuss strategic infrastructure projects in the Middle East as a counter to China’s increasing forays into the region.
The US then roped in Saudi Arabia too.
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China, Middle East & BRI
Incidentally, Saudi Arabia and China have also expanded their bilateral relationship in recent years.
Chinese president Xi was in Riyadh on 7 December, 2022, where he took part in the first-ever China-Gulf Cooperation Council (GCC) Summit, besides holding bilateral talks with leaders of the host country and 22 Arab League member states — barring Syria.
As the Atlantic Council noted, “although all participants had their own reasons for overstating the trip’s significance, there is no denying how far China and other MENA countries have come in recent decades”. It added that over the last decade, China’s interests in the Middle East have “grown far beyond energy security”.
China has been the Arab world’s largest trading partner since 2020. Two-way trade between them surpassed $330 billion in 2021.
Further, while its investments in the region have declined, China is still the largest foreign investor in the Middle East. During Xi’s first visit to the region in 2016, Beijing had pledged to the region investments to the tune of $29.5 billion (including construction).
Sources said this project involving India, the US, the UAE and Saudi Arabia is a counter to China’s BRI (also known as One Belt One Road Initiative) and Beijing’s growing presence in the Middle East.
Sometimes referred to as the New Silk Road, the BRI is seen as one of the most ambitious infrastructure programmes ever undertaken. While it aims to link East Asia and Europe through physical infrastructure, it has also expanded to Africa, Oceania, and Latin America, broadening China’s economic and political influence, noted the Council on Foreign Relations.
(Edited by Amrtansh Arora)
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