India-Middle East-Europe Economic Corridor (IMEE EC)

India-Middle East-Europe Economic Corridor (IMEE EC)

News: The Memorandum of Understanding (MoU) for IMEE EC was unveiled during the 2023 G20 New Delhi summit by the governments of India, the United States, the UAE, Saudi Arabia, France, Germany, Italy; and the EU.

What is IMEE EC?
• The IMEC is being envisioned as a network of transport corridors, including railway lines and sea lanes, that is expected to aid economic growth through integration between Asia, the Arabian Gulf, and Europe.
• It is a part of the Partnership for Global Infrastructure Investment (PGII) — a West-led initiative for funding infrastructure projects across the world, seen as a counter to China’s Belt and Road Initiative (BRI).
• It is being positioned as modern-day spice route.

What are the key components of corridor?
• Railway lines – It will make trade between India and Europe 40% faster
• Electricity cable and a clean hydrogen pipeline to foster clean energy trade
• High-speed data cable to link innovative digital ecosystems in the world and create business opportunities

What is the significance for India?
• Firstly, the talk of this corridor comes at a time when India is closer to agreeing Free Trade agreements with EU and UK.
• It will help enhance food security, regional supply chains, trade accessibility, job creation, and reduces greenhouse gas emissions.
• Use of land route in Arabian Peninsula means it could help bypassing the congested Suez Canal that cargo ships currently take.
• The corridor is in line with India’s vision of pathbreaking initiatives such as Make in India, Sagarmala and Atmanirbhar Bharat.
• It offers India a crucial role in global commerce, digital communication, and energy networks vis-à-vis China’s BRI.
• It will help in joining forces in petrochemicals manufacturing by integrating India’s hydrocarbon value chain and creating an innovation corridor for green energy and innovative tech manufacturing value chains.

What is the PGII initiative?
• The Partnership for Global Infrastructure Investment initiative (announced in 2021 during the G7 summit in the UK) is a collaborative effort by G7 countries to fund infrastructure projects in developing nations.
• It emphasizes loans over charity, benefiting both lending and receiving countries.
• PGII initiatives include - Trans-African Corridor, Clean Energy Projects in Indonesia, Investments in India’s health infrastructure and EU’s Global Gateway program.
• The US government’s International Development Finance Corporation (DFC) pledged over $15 million to invest in India’s health infrastructure, including eye clinics and women’s hygiene products.