In the midst of the ongoing conflict between Palestine and Israel, Union Finance Minister Nirmala Sitharaman addressed concerns about the India-Middle East-Europe Economic Corridor (IMEC) at the Indo-Pacific Regional Dialogue 2023.
The corridor, announced at the New Delhi Group of Twenty summit, is designed to enhance transportation efficiency, reduce logistic costs, and foster economic unity among the involved states.
Sitharaman emphasized the potential benefits of IMEC, including employment generation and a reduction in greenhouse gas emissions, contributing to a cleaner and safer world. However, she acknowledged the geopolitical challenges posed by the Israel-Hamas war, stating, “It is not without its geopolitical challenges, and the ongoing conflict in Israel and Gaza is a worrying manifestation of these.”
The ambitious multi-country corridor, announced in September, aims to connect Indian ports with West Asian ports, including those in the United Arab Emirates and Saudi Arabia. Recent tensions in West Asia, particularly the terrorist attacks in Israel and subsequent Israel-led attacks in Gaza, have raised uncertainties about the stability of the region and the feasibility of the corridor.
IMEC encompasses various components such as transportation, electricity cables, high-speed data cables, and a hydrogen pipeline. Plans are underway to identify optimal connectivity, with the central government playing a significant role in executing the Eastern corridor that establishes connectivity between West Asia and India.
In response to the challenges faced by Indian traders and logistics players due to Covid-19 and geopolitical tensions, Sitharaman highlighted the establishment of an Indian-owned and India-based protection and indemnity (P&I) entity. This entity aims to reduce India’s vulnerability to international sanctions, provide strategic flexibility in shipping operations, and resolve insurance issues for domestic shippers.
The Finance Minister also underscored India’s commitment to playing a greater role in the Indo-Pacific despite geopolitical shocks. She emphasized the need for India to transition from a ‘brown’ economic model to a ‘blue’ one and shoulder greater regional responsibilities in the Indo-Pacific.
While Sitharaman expressed the clarity that India cannot afford to be an inward-leaning power, she acknowledged the challenges in the Indo-Pacific, caught between two competing systems. Middle powers are exploring options for engagement that align with individual national interests and broader regional goals, according to Sitharaman’s insights at the Indo-Pacific Regional Dialogue 2023.