The recently concluded G20 Summit proved to be a positive dialogue for the members present there, they made important economic and political strategies to enhance the growth of their respective nations. To fulfil the motto “one planet, one family, one future” of this conference the State Heads of India, Saudi Arabia, UAE, France, Germany, Italy, EU, and the USA signed a MoU on the India-Middle East-Europe economic corridor. It is a planned economic corridor that aims to boost financial development by fostering connectivity and economic integration between Asia, the Arabian Gulf, and Europe. Indian Prime Minister Narendra Modi announced this grand economic corridor from the stage of the historical 18th summit of G20.
The project seems to be the biggest win from the G20 Summit for India and the involved members, as they are cautiously utilising every possible opportunity to counter the growing influence of China in the global economy. The icing on the cake is that Italy, which is a member of the China Belt and Road Initiative, is hinting to walk out from the initiative. The placement of Italy in the plan was a crucial step by the leaders because it helped in joining the maritime and road belts.
This rail and shipping corridor is part of PGII. PGII is a collaborative project of the G7 countries to provide monetary aid for infrastructure projects in developing countries. This project is also known as a green and digital bridge across continents and civilizations. This aims to boost trade between India, the Middle East and Europe. It creates a modern spice route that connects regions that account for about a third of the world’s economy. The economic route has a rail connection as well as an electrical cable, a hydrogen tube and a high-speed data cable. The proposed project would link rail and port facilities in the Middle East, including the United Arab Emirates, Saudi Arabia, Jordan and Israel. The corridor will boost trade between India and Europe by up to 40 per cent.
IMPORTANCE for INDIA
India has been concerned about China’s connectivity projects in the region under the decade-old Belt and Road Initiative. For India, the refusal of Pakistan to leave the overland access in the country is also frustrating. India’s attempt to create a reliable link through Iran with Eurasian countries did not yield much result. Tehran is more open to Bharat, but its confrontation with the West has overshadowed the commercial benefits of Iran’s corridors to Eurasia. Finally, India found a formula to connect with both the Arabian Gulf and Europe.
The proposal comes at a time when Saudi Arabia and the United Arab Emirates, both longtime US allies, have strengthened their ties with China. Middle Eastern countries are trying to strengthen relations with the rapidly growing economies of the far East. Beijing has also recently strengthened ties with the Middle East, helping broker a deal between Saudi Arabia and Iran earlier this year. At the BRICS summit in 2023, oil-rich Gulf states announced their intention to join the group, where China plays a leading role. The plan is likely to be an ambitious attempt by Washington to counter China’s Belt and Road Initiative, which aims to connect more of the world with the country’s economy. Recently, China’s BRI has faced some problems due to rising loan defaults and slowing investment.
Foreign Relations experts believe that this plan holds the collective importance of old silk and spice routes together. Every leader is aware of the global opportunities as well as the challenges they face. If India wants to win the next two decades, then this export-driven manufacturing and trade route is the important thing for Bharat.