New Delhi, September 12, 2023 – In a significant move on the sidelines of the G20 Summit in New Delhi, India has orchestrated a strategic partnership with key allies, including the United States, UAE, Saudi Arabia, European Union (EU), Italy, France, and Germany, to establish the India-Middle East-Europe Economic Corridor (IMEC). This initiative is widely viewed as India’s response to China’s Belt and Road Initiative (BRI), launched in 2013.
The IMEC project aims to promote connectivity and economic integration spanning South Asia, the Arabian Gulf, and Europe. Indian Railway Minister Ashwini Vaishnaw emphasized that IMEC will distinguish itself from the BRI, emphasizing its financial viability and ability to generate revenue without plunging host nations into a debt crisis. He stated, “Compared to the Chinese project that has pitched some of its host nations into a debt trap, the G20 project will bring in revenue and be bankable. The PM’s vision of taking everyone along is an important part of this corridor.”
The BRI has faced growing concerns over its debt sustainability, particularly amid China’s economic slowdown and rising debt levels. Reports have even indicated Italy’s desire to exit the project. Vaishnaw assured that the IMEC project would be so financially sound that multiple multilateral institutions are willing to fund it. He added, “Transportation will bring in so much revenue that it will be able to pay for itself without subjecting the host country to a debt trap.”
Unlike the BRI, which encompasses six corridors, IMEC consists of two distinct corridors: the east corridor linking India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe. This includes a railway network designed to offer cost-effective cross-border ship-to-rail transportation. IMEC’s primary objectives include enhancing economic efficiency, reducing costs, and fostering economic unity among participating nations, all while aligning with sustainable development goals.
The BRI, which aimed to stimulate shared growth through policy coordination, connectivity, unimpeded trade, financial integration, and people-to-people connections, has faced criticism from the United States. President Joe Biden referred to it as the “debt and noose” project due to concerns regarding its lending practices.
IMEC enjoys strong support from both the United States and the EU. President Biden described the corridor as offering “endless opportunities” for the involved countries, facilitating trade and the export of clean energy, as well as enhancing communication infrastructure. European Commission President Ursula von der Leyen hailed the project as “historic” and highlighted its potential to make trade between India and Europe 40 percent faster through the newly established rail link.
