GS 2 | International Relations

Why in the news?

  • India and Italy are agreeing to work jointly in implementing the ambitious India-Middle-East-Europe-Economic Corridor (IMEEC).

India-Middle East-Europe Corridor (IMEC)

  • What is it?: IMEC is a transcontinental project to enhance connectivity and trade routes from India to Europe via the Middle East
  • Launch: Announced during the G20 Summit in New Delhi in 2023.
  • Objectives
    • Reduction in transit time by 40% and costs by 30% (though actual benefits might vary).
    • Creation of a seamless trade route connecting India, the Middle East, and Europe, which is anticipated to reshape international maritime trade.
  • Current Progress:
    • The eastern part of IMEC, linking India and the UAE, is progressing well, facilitated by strong economic ties.
    • Bilateral trade between India and UAE has grown significantly, supported by the 2022 Comprehensive Economic Partnership Agreement (CEPA), and now includes non-oil trade diversification.
    • The Virtual Trade Corridor between India and UAE has been launched to streamline trade processes, lowering logistics costs and administrative burdens.
  • Challenges
    • The western segment faces uncertainty due to the Israel-Palestine conflict, which has disrupted regional cooperation, especially with stakeholders like Saudi Arabia and Jordan.
    • Implementation in the western corridor may be delayed until regional stability improves, affecting overall IMEC timelines.
  • Future Prospects
    • For now, only the connectivity aspect is moving forward, while other components like energy grid linkages and clean energy technology cooperation are on hold.
    • India and other eastern stakeholders should use this period to enhance internal logistics, port readiness, and capacity-building .

India’s Role

  • Infrastructure Development: Upgrading Indian ports, creating economic zones, and digitizing logistics for improved efficiency.
  • Integration into Global Value Chains: Enhancing manufacturing competitiveness to position India as a global supply chain alternative.
  • Institutional Support: Establishing an IMEC Secretariat for streamlined management and governance, which could encourage neighboring countries to join the initiative.

 

Source: Indian Express