IMEC will take time to become viable : The Tribune India

Join Whatsapp Channel

IMEC will take time to become viable

It is difficult to miss the geopolitical imperatives behind the US-helmed economic corridor

IMEC will take time to become viable

SELF-INTEREST: By involving India in the IMEC, the US would undercut our links with Iran and Russia. AP



Manoj Joshi

Distinguished Fellow, Observer Research Foundation, New Delhi

THE India-Middle East-Europe Economic Corridor (IMEC) is the latest entrant to the arcane world of multi-mode transportation networks. It was announced in the form of an MoU during the recent G20 summit by the US, India, Saudi Arabia, the UAE, the EU, Italy, Germany and France as a connectivity scheme aimed at boosting the economic integration of South Asia, the Middle East (West Asia) and Europe. The corridor would involve ports, rail lines, shipping network and roads.

The corridor is unlikely to offer any threat to the BRI as China’s ties with three of its principal backers — the UAE, Saudi Arabia and Israel — are sound.

Considering that there already exists a corridor, one that goes through the Suez Canal, it is reasonable to ask what value addition will take place through this new network. The IMEC’s aim is to link Indian ports such as Mumbai with the likes of Jebel Ali in the UAE, and thereafter trans-ship containers by rail or road across Saudi Arabia to the Israeli port of Haifa and from there send them by sea to the Greek port of Piraeus for their onward journey to other parts of Europe.

In theory, the IMEC will compete with the Chinese Belt and Road Initiative (BRI) as well as the India-backed International North-South Transportation Corridor (INSTC) and the Iraq Development Road Project supported by Turkey. But the IMEC will take time to come up. There are major missing links in the railway system in the Saudi peninsula — some 1,100 km between the Fujairah port in the UAE, closest to India, and Haifa in Israel, as well as hundreds of kilometres between other UAE ports such as Jebel Ali and Khalifa.

We are all familiar with the BRI, which has already made significant investments in West Asia to construct and operate industrial parks in Egypt, Oman, Saudi Arabia and the UAE. China has a major contract for the development of the railways in Saudi Arabia and a 35-year concession to develop and operate a container terminal in the Khalifa port. Another major port project is the $10.7-billion development of the port of Duqm in Oman, along with a special economic zone.

Israel, too, has BRI connections. Originally, the Chinese had the Haifa concession, but under US pressure, the Israelis took it back and now it is with the Adani Group. Another Chinese company has developed the new container terminals in the port of Ashdod, now run by a Swiss company.

China has huge commitments in Iran for a slew of infrastructure projects, ranging from ports to free trade zones and high-speed trains. Then there is the China-Pakistan Economic Corridor, which terminates at Gwadar at the mouth of the Strait of Hormuz.

The INSTC was aimed at linking western Indian ports to northern Europe through Iran, Azerbaijan and Russia. Dry runs have been conducted to prove its viability; in 2017, a Russian company shipped goods from India to Russia through this corridor. A study by the Freight Forwarders Association in India found that the corridor was 30 per cent cheaper and took 40 per cent less time than the Suez Canal route.

In terms of viability, the arithmetic is daunting. Currently, it takes some 17 days for a ship to go from Mumbai to Piraeus through the Suez. It would take five days from Mumbai to Fujairah (UAE) and another 3-4 days from Haifa to Piraeus. Add to this the time taken for loading and unloading the containers in four ports as well as its trans-shipment through a railway system which has yet to come up and which would have to go through various countries, such as the UAE, Saudi Arabia, Jordan and Israel. We would be lucky if the time taken to pass through the IMEC will match the duration via the time-tested Suez Canal route.

It is difficult to miss the clearly geopolitical imperatives behind the IMEC. It is being helmed by the US, which is unlikely to actually put any money into it. But it is seeking to construct a layer of sorts over its recent geopolitical positions, reflected in the Abraham Accords of 2020, the current efforts to promote an Israel-Saudi rapprochement and the India-Israel-UAE-US (I2U2) mini-lateral grouping of 2021. By getting India to participate in the IMEC, the US would undercut our links with Iran and Russia that could have benefited from INSTC, even while binding Israel closer to the UAE and Saudi Arabia.

There are regional counter-currents that the US is not entirely comfortable with. Among these are the Iran-Saudi rapprochement brought about under Chinese auspices. Ties between Turkiye and Saudi Arabia, too, are improving and the two sides have even signed a major defence cooperation deal.

The IMEC is unlikely to offer any threat to the BRI. China’s relations with three of its principal backers — the UAE, Saudi Arabia and Israel — are sound. Indeed, Chinese expertise may even be called on to complete some of the missing rail links. Incidentally, the port of Piraeus being spoken of as the terminus is owned by Chinese company Cosco.

India, as the eastern terminus of the deal, is in a sweet spot due to its relations with the US as well as the UAE, Saudi Arabia and Israel. It is unlikely to be called on to contribute much to the IMEC, but it could benefit from the requirement for upgrading the Saudi and UAE railway networks and digital infrastructure. The Adani Group is now running the Haifa port and the group’s ports in Kandla and Mundra are likely to be at the India end of the IMEC. However, for reasons outlined above, it will be some time before the IMEC alternative becomes viable.

#Europe #France #G20 #Germany #Saudi Arabia


Top News

Kanwar Yatra: Supreme Court imposes interim stay on order asking eateries to display names of owners

Supreme Court stays UP Government’s order to eateries to display names of owners along Kanwar Yatra route

Top court was hearing pleas filed by NGO Association for Pro...

No case made out for granting special category status to Bihar: Govt in Lok Sabha

No case made out for granting special category status to Bihar: Govt in Lok Sabha

JD(U) leader Sanjay Kumar Jha had voiced his party's demand ...

Union Finance Minister Nirmala Sitharaman tables Economic Survey 2023-24 in Lok Sabha

India’s GDP to grow at 6.5 per cent to 7 per cent in 2024-25, says Economic Survey tabled in Parliament India’s GDP to grow at 6.5 per cent to 7 per cent in 2024-25, says Economic Survey tabled in Parliament

The growth projected for 2024-25 is lower than the economic ...

YouTube down in India; users face problem while uploading videos, accessing app

YouTube down in India; users face problem while uploading videos, accessing app

Hashtag YouTubeDown has started trending on social media as ...


Cities

View All