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The G20 summit, hosted by India over the weekend, saw the development of an ambitious intercontinental transport programme to boost cross-border trade between India, the Middle East and Europe, paving the way for more integrated and swifter global supply chain solutions.
The proposed India-Middle East-Europe Economic Corridor (IMEC) – arguably designed to counter China’s Belt and Road Initiative (BRI) – will involve sea-rail connectivity links, which industry pundits believe have the potential to make India-Europe cargo flows significantly faster – an overall 40% transit improvement according to anecdotal estimates.
“The IMEC is expected to stimulate economic development through enhanced connectivity and economic integration between Asia, the Arabian Gulf, and Europe,” said a joint statement signed by India, the UAE, Saudi Arabia, the EU, France, Italy, Germany and the US.
“It will provide a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes.”
The project will feature a two-pronged connectivity strategy: an eastern corridor connecting India to West Asia and the Middle East and a northern corridor linking West Asia and the Middle East to Europe.
Between India and the Middle East, cargo will move by sea, most likely via connections between Jebel Ali (Dubai) and West India (Nhava Sheva/Kandla/Mundra).
The corridor will broadly be a multimodal network, somewhat mirroring the International North South Transport Corridor (INSTC) set up between India, Russia, Iran, Europe and Central Asia, which has grabbed headlines in recent months after western sanctions on Russia disrupted supply chains.
And it could be expanded, with Greece as a prospective bet to join in, according to sources.
“The IMEC would help promote economic integration between India and Europe,” said Indian prime minister Narendra Modi, while US president Biden described it as “a big deal; a really big deal”.
And Indian logistics stakeholders sounded bullish. Adarsh Hegde, MD of 3PL Allcargo Logistics, told The Loadstar: “The investments in rail and shipping route capacities will bring down costs and transit times and position India well for meeting global product demands. This corridor is more robust than other initiatives.”
Amar More, CEO of Mumbai-based Kale Logistics Solutions, said cargo flows between India and Europe that currently take between 20 and 30 days over the Suez Canal could become considerably quicker.
“This is also a step towards regional collaboration, boosting trade ties with potentially wide-ranging geopolitical implications,” Mr More told The Loadstar. “It’s undeniably historic.”
On the other hand, rolled out in 2013, the BRI network or New Silk Road already aims to connect Asia with Europe and Africa, but a slowing Chinese economy has had an impact on its pace of development. There are also reports that Italy is considering exiting the BRI network, reportedly concerned over unrealised target goals.
New Delhi has, in recent years, demonstrated heightened regional trade ambitions to checkmate Beijing’s growing influence in the Indo-Pacific region at multiple levels. With the buzz around trade corridors heating up, it remains to be seen how geopolitics will play out.
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