Progress and challenges of the India-Middle East-Europe Corridor (IMEC)

Source: The post progress and challenges of the India-Middle East-Europe Corridor (IMEC) has been created, based on the article “A mixed report card for the IMEC” published in “The Hindu” on 13th November 2024

UPSC Syllabus Topic: GS Paper 2 – International Relations – Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.

Context: The article discusses the progress and challenges of the India-Middle East-Europe Corridor (IMEC). It highlights delays in the western segment due to conflicts in West Asia and steady progress in the eastern segment, driven by India-UAE trade relations and connectivity efforts. India-Middle East-Europe Corridor.

What is the IMEC and why is it important?

1. The India-Middle East-Europe Corridor (IMEC) was announced at the G20 Summit in September 2023.
2. It aims to reduce transit time by 40% and costs by 30% compared to the Suez Canal route.
3. The corridor is expected to boost international trade significantly.

For detailed information on India Middle East Europe Corridor read this article here

What progress has been made on the IMEC?

1. Western Segment Challenges

• Progress in the western part, including Saudi Arabia and Jordan, is delayed.
• The Israel-Palestine conflict since October 2023 has slowed collaboration in the region.
• Geopolitical tensions make joint work with Israel difficult for Arab nations.

2. Eastern Segment Developments

• The eastern segment, connecting India and the UAE, is progressing well.
• India-UAE trade has grown significantly post the 2022 CEPA agreement: Total trade increased from $43.3 billion (2020-21) to $83.64 billion (2023-24). Non-oil trade grew from $28.67 billion (2020-21) to $57.81 billion (2023-24).

3. Virtual Trade Corridor

• India and the UAE have launched the Virtual Trade Corridor to streamline trade by reducing administrative processes and costs.
• This initiative is expected to serve as a model for other countries in the IMEC to enhance cross-border trade efficiency.

For detailed information on Challenges faced by IMEC read this article here

What Can India Do During the Delay?

1. India can use the current delays in the western segment to enhance its infrastructure.
2. This includes preparing ports, developing economic zones along the corridor, and improving domestic logistics.
3. Enhancing digital infrastructure in logistics can reduce costs and time, making Indian exports more competitive.
4. Moreover, setting up an IMEC secretariat could help organize the corridor’s structure and promote its benefits to potential new members.

Question for practice:

Evaluate the progress and challenges of the India-Middle East-Europe Corridor (IMEC) and suggest what steps India can take to address the delays.