The Indian government wants to develop the India-Middle East-Europe Economic Corridor (IMEEC) on the principles of GatiShakti, India’s blueprint for nationwide multi-modal connectivity, Special Secretary Sumita Dawra said in an exclusive interaction with Moneycontrol.
“GatiShakti principles would be suitable for planning this kind of economic corridor, especially when it comes to the logistics division. We have all the ingredients required for this kind of a plan,” Dawra added.
At the G20 Summit, India, along with the US, the UAE, Saudi Arabia, the European Union, Italy, France, and Germany launched an economic corridor pact that is being perceived as an answer to China's Belt and Road Initiative (BRI) launched in 2013. The IMEEC aims to foster connectivity and economic integration between South Asia, the Arabian Gulf region, and Europe.
It will consist of two distinct corridors — the eastern corridor linking India to the Arabian Gulf, and the northern corridor connecting the Arabian Gulf to Europe.
This proposed Economic Corridor will connect eight countries through a range of seaports, rail roads, roads, as well as undersea power and telecom corridors using cables, all of which can be planned on the principles of GatiShakti, Dawra said.
The Department for Promotion of Industry and Internal Trade (DPIIT) will work closely with the Ministry of External Affairs for effective implementation of this project, she added.
“We need to see where the demand is and we need to see how this will be worked out. We have to work closely with MEA on this as this will also mean working across the border, which we have started with Nepal,” Dawra added.
However, the corridor has just been announced and its implementation will depend on a lot of factors.
“How to do this, within what protocols, and within what agreements will be looked at before we come up with a plan,” she said.
According to government officials, so far feasibility studies on the economic corridor have been conducted by the governments of Saudi Arabia, the UAE, and Oman, which will be shared with the Indian government in due course.
The announcement comes at a time when New Delhi has been attempting to increase its exports as it aims to take the country's economy from the current $3.5 trillion to $35 trillion in the next 25 years
While the US and the EU are already India’s biggest export markets, the country’s trade with UAE & Saudi Arabia is set to rise with several bilateral trade agreements signed.
The India-Saudi Investment Forum held soon after the G20 summit was over, brought together policymakers, business leaders, and innovators from both countries and concluded with the signing of over 50 Memoranda of Understanding (MoUs) and agreements in sectors including renewable energy, power, telecom, petrochemicals among others.
The UAE is already India’s third largest trading partner after China and the US. It is the second largest export destination for India (after the US) with a total export value of nearly $31.61 billion for the year 2022-23. The UAE’s first-ever comprehensive economic partnership agreement (CEPA) was signed with India, in February last year, and came into force in May 2022. The two nations are launching a new era of economic and trade collaboration with an agreement over Dirham-Rupee Trade.
“With the FTAs (free trade agreement) with UAE and the new economic corridor being announced, DPITT will also be looking at more investments coming from the private space (as foreign investment) in developing warehouses and multimodal logistics parks,” Dawra said.
Also Read: India aims to improve Logistics Performance Index ranking to top 25 by 2030
What is Gati Shakti?
To achieve the goal of a $5 trillion economy by 2025, Prime Minister Modi, on October 13, 2021, launched PM GatiShakti to transform India’s infrastructural landscape.
GatiShakti works on the principles of integrated development through multimodal infrastructure, and envisages last-mile connectivity, reduced ecological impact, expedited land acquisition, and minimised clearances for projects.
Through integrated planning and synchronised project implementation across all the ministries concerned and state governments, PM GatiShakti’s objective is to improve multimodal connectivity, logistics efficiency and address critical infrastructure gaps for seamless movement of people, goods, and services within the country.
Meanwhile, Turkey has been engaged in "intensive negotiations" to find a substitute for the India-Middle East trade corridor proposal as it wants to maintain its long-standing position as a major transit hub for commodities travelling from Asia to Europe.
The projected India-Middle East line, which would transport goods from the subcontinent to European markets via the United Arab Emirates, Saudi Arabia, Jordan, and Israel, has received no backing from Turkey.
Also Read: Turkey proposes alternative to India-Middle East trade corridor
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