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Interim budget reiterates commitment to IMEC Corridor
Finance Minister calls it a ‘strategic and economic game changer’
India Middle East Europe Corridor / Screengrab from YouTube video by World Geopolitics
The interim budget presented on February 1 put to rest speculation that the bold scheme first proposed during the G20 summit to create an economic corridor connecting India to the Middle East and Europe had been pushed to the back burner.
In her budget speech, Union Finance Minister Nirmala Sitharaman stressed that the “India-Middle East-Europe Economic Corridor is a strategic and economic game changer for India and others," adding that “(it) will become the basis of world trade for hundreds of years to come, and history will remember that this corridor was initiated on Indian soil”.
On September 10 last year in Delhi, a memorandum of understanding was signed during the G20 summit by the governments of India, the US, UAE, Saudi Arabia, France, Germany, Italy and the European Union, endorsing theIMEC corridor proposed to run from India to Europe via the United Arab Emirates.
rime Minister Narendra Modi addresses the Partnership for Global Infrastructure and Investment & India-Middle East-Europe Economics Corridor event during G20 Summit, in New Delhi on September 9, 2023 where the MOU on IMEC was signed. / India PMOThe corridor will have both sea and land (rail) routes with two components: the Eastern Corridor linking India to West Asia and the Middle East, and the Northern Corridor linking West Asia and the Middle East to Europe. However, just four weeks after the MOU was signed, the Israel-Hamas war broke out, casting doubt on when, if at all, the IMEC corridor could take off.
But the budget announcement firmly commits India to taking the project forward. Moreover, as it was the only international-related announcement in the budget, it will be seen as providing opportunities for overseas Indian infrastructure and logistics enterprises to participate, among others.
The routing also now appears prescient, since it avoids the Suez Canal and simultaneously provides an alternative Asia-Europe link, while not demanding the lengthy sea route around the African continent.
The recent disruption in maritime traffic through the Suez Canal, due to piracy in the nearby seas, underlines why all the signatories to the IMEC MoU might view the India-led initiative as an idea whose time has come, rather than something made impractical by the current conflict in the region.
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