On the sidelines of the recently held G20 summit in Delhi, India along with Saudi Arabia, the European Union and the United States, unveiled the India-Middle East-Europe Economic Corridor, a planned infrastructure project aimed at boosting connectivity between the three regions.
Observers consider the project to be highly consequential, especially for India. Moreover, amid an intensifying great power competition between the United States and China, they are also viewing it as a counter to China’s Belt and Road Initiative.
However, some have raised questions about the economic viability of this proposed corridor. It is also being viewed by some nations with suspicion due to geopolitical considerations.
India to Europe via West Asia
The multimodal corridor comprises rail and shipping routes, undersea cables for electricity and telecommunications, and pipes for clean hydrogen exports.
While the final alignment has not been confirmed, the corridor is expected to link India, the United Arab Emirates, Saudi Arabia, Jordan, Israel and some of the European Union’s member states. This will improve connectivity and enhance economic integration across these regions, the participating nations’ agreement read.
This comes amid strengthening of India’s strategic ties with West Asia, especially Saudi Arabia and the UAE. Meanwhile, the historically frosty ties between Israel and some Arab states such as the UAE have normalised in recent years. A more significant truce between Israel and Saudi Arabia is also reportedly in the works.
‘Highly consequential’
This is a significant development, observers say. “It has the potential to unlock several opportunities that these geographies haven’t been able to tap into because of connectivity issues,” Harsh V Pant, vice president for studies and foreign policy at the Observer Research Foundation, told Scroll.
Pant noted that the corridor will bring together investments by various stakeholders and economic synergies of several geographies.
Navdeep Suri, a former Indian diplomat, said that the project having a connectivity corridor for data and green hydrogen pipelines besides a transport corridor makes it “highly consequential”. “From an Indian perspective, [the Gulf Cooperation Council] is our largest trading partner and the EU is the second largest,” Suri highlighted.
The corridor will also help boost India’s strengthening strategic engagement with West Asia, C Raja Mohan, a senior fellow at the Asia Society Policy Institute, wrote in The Indian Express. “The Modi government, which had rapidly elevated political and strategic links with the United Arab Emirates and Saudi Arabia in the last few years, now has an opportunity to build enduring connectivity between India and Arabia,” Mohan wrote on Saturday.
Michael Kugelman, director of the Washington-based Wilson Center’s South Asia Institute, concurred. “We have seen, through growing energy and broader commercial relations, deepening strategic partnerships, and the I2U2 quad, that Delhi is heavily invested in a deep connect with the Middle East,” Kugelman told Scroll. “Outside its immediate neighbourhood and broader Indo-Pacific, the Middle East is likely the region that Delhi views as the most strategically significant. This new project will bring India even closer to this key region.”
The I2U2 is a grouping comprising India, Israel, the UAE and the United States for cooperation on issues including transportation and energy.
Countering China’s BRI?
Observers are also viewing it as a counter to China’s Belt and Road Initiative. “This scheme clearly is about countering the BRI, which currently bypasses India,” Ian Hall, deputy director for research at Griffith Asia Institute, told Scroll. “The [corridor’s] benefit for Europe and the US clearly lies in ensuring China does not dominate the trans-regional trade.”
This is one of the two projects backed by the Partnership for Global Infrastructure and Investment, a funding initiative the Group of Seven nations had launched in July 2022. The partnership itself is widely seen as the West’s attempt at countering the BRI.
Pant highlighted how the economic corridor project is being presented. “The way it has been framed is also in terms of the values it espouses: financial accountability, transparency, environmental sustainability, capacity building and not letting low and middle income countries fall under debt,” Pant said. “All these principles have been enunciated keeping in mind some of the challenges the Chinese projects are facing. In that sense, it is about providing an alternative to China’s approach to connectivity.”
China has been accused of using the BRI for so-called debt trap diplomacy with developing nations.
Kugelman said that while Washington will want the project to counter BRI, some Gulf participants, and perhaps even some European states, may not want to project it that way because they value their commercial links with Beijing. “It may be better to view it as an alternative to China’s infrastructure investments,” Kugelman added. “US officials have already described the project as transparent and non-coercive, a clear contrast with how the US views BRI. So, at least from a US perspective, the goal of the project in part will be to provide an alternative infrastructure investment model.”
The viability debate
But this has triggered a debate – with some saying that they are unsure about the concept. “I do not pretend to be an expert in freight or logistics but I’m struggling to wrap my head around the economics of this corridor,” Christopher Clary, a non-resident fellow at Stimson Center’s South Asia programme, said on social media on Sunday.
Some social media users similarly claimed that the Suez Canal route remains more viable.
In a similar vein, Chinese government-backed Global Times newspaper raised suspicion about what necessitated the project. “There is convenient maritime transport among India, the Middle East and Europe,” it said on Monday. “So it is highly questionable whether the region needs to build a rail network for the limited trade volume.”
Responding to Clary’s query, Michael Tanchum, a non-resident scholar at the Washington-based Middle East Institute, pointed to the corridor’s concept he wrote in 2021 to claim that it will be 40% faster than the existing Suez Canal maritime route. The European Union has also claimed that it will be 40% faster.
Suri, who served as India’s ambassador to the UAE between 2016 and 2019, told Scroll that the new corridor will help cut dependence on the Suez Canal. “Currently, the only way to connect to Europe is via the Suez Canal and that takes 17 to 18 days,” Suri said. “If you can cut it down to 10, and create green alternatives for the transport, then you’re facilitating something important.”
Suri added, “Rather than being dependent on the Suez Canal for our trade with Europe, this creates a very handy alternative that could even be more efficient and faster.”
Geopolitical considerations
Yet, not everyone is enthusiastic about the project. On Sunday, Turkish President Recep Tayyip Erdoğan opposed the corridor because it bypasses Turkey. “We say that there is no corridor without Turkey,” Erdogan said. “Turkey is an important production and trade base. The most convenient line for traffic from east to west has to pass through Turkey.”
Turkey shares complicated ties with some of the corridor’s participants such as Saudi Arabia and Israel. Cyprus and Greece, two other nations along the proposed corridor, are Turkey’s long-time rivals. Moreover, Ankara is already involved in the proposed Iraq Development Road Project – an alternative rail and road corridor connecting the Gulf to Europe through Iraq and Turkey.
China welcomed the project on Tuesday, but cautioned that it should not become a “geopolitical tool”.