Interim budget reiterates commitment to its key international infrastructure outreach: the IMEC Corridor

03rd February 2024
  • New Delhi
Interim budget reiterates commitment to its key international infrastructure outreach: the IMEC Corridor
1. India Middle East Europe Corridor. Graphic credit: Screengrab from YouTube video by World Geopolitics

The Interim budget presented on February 1, has set at rest  suggestions that the bold scheme first mooted during the G20 summit, to create an economic corridor linking India to the Middle East and Europe,  might have been relegated 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, “(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 2023 G20 summit by the governments of India, the US, UAE, Saudi Arabia, France, Germany, Italy and the European Union, endorsing the   IMEC corridor proposed to run from India to Europe, via the United Arab Emirates. The 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  a Northern corridor linking West Asia and the Middle East to Europe.

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 take the project forward. And as the only announcement in the budget that had international ramifications, it will be seen to  provide opportunities for  the  participation among others, of overseas Indian infrastructure and logistics enterprises.

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 infructuous by the current conflict in the region.

This has appeared in New India Abroad