Context:

India has launched the Vladivostok-Chennai shipping route and intends to connect at least two more east coast ports—Paradip and Vizag—to this maritime corridor.

Vladivostok-Chennai Shipping Route

The shipping route connects India's southeastern coast with Russia's Far East. It is expected to cut travel time between the two countries by 50%.

The main products shipped from Russia to India via this route are petroleum and LNG (liquefied natural gas). It allows India to export textiles, engineering goods, and machine parts to Russia.

The Red Sea route now takes about 48 days, while the Vladivostok-Chennai route takes up to 15 days. The shorter travel time on the Vladivostok route may result in cost savings for exporters.

The Red Sea route is critical to India's trade, accounting for 50% of exports and 30% of imports and connecting India to Europe, North America, Africa, and the Middle East.

India is also searching for alternative shipping routes like the INSTC (International North-South Transport Corridor) and the India-Middle East-Europe Corridor (IMEEC).

India-Middle East-Europe Economic Corridor (IMEEC)

It was announced during the G20 summit in New Delhi in September 2023.

It is a transcontinental project that aims to boost economic growth by improving connectivity and integration between Asia, the Persian Gulf, and Europe.

It is expected to cut transit time by 40% and costs by 30% compared to the traditional Suez Canal route.

It also includes the construction of undersea data cables and long-distance hydrogen pipelines to aid in climate and decarbonization goals.

Countries involved in the Project

India, the United States, the United Arab Emirates (UAE), Saudi Arabia, France, Germany, Italy, and the European Union signed the IMEEC Memorandum of Understanding (MoU).

Proposed Route

It aims to improve transportation and communication between Europe and Asia through rail and shipping networks, providing an alternative trade route to the Suez Canal and countering China's Belt and Road Initiative.

It is made up of two corridors:

The east part connects India to the Gulf
The northern part connects the Gulf to Europe.

The shipping route connects Mumbai and Mundra (Gujarat) with the UAE.

The rail network connects the UAE, Saudi Arabia, and Jordan to Haifa, an Israeli port with access to the Mediterranean Sea.

Haifa will be connected by sea to Greece's Piraeus port, connecting Europe via existing transportation networks.

Progress of the Projects

The eastern section of the IMEEC, which connects the UAE and Indian ports, is moving faster due to strong economic ties between India and the UAE. The Comprehensive Economic Partnership Agreement (CEPA) has increased trade between the two countries.

The main challenge on the western part of IMEEC is the ongoing Israel-Palestine conflict, which has disrupted plans and impacted Saudi Arabia and Jordan's participation in the project because they must collaborate closely with Israel.

Way Forward

India should improve its port infrastructure, establish economic zones near connectivity nodes, and improve its digital and logistics capabilities to reduce export costs and time, increasing competitiveness.

India wants to use IMEEC to position itself as an important part of the global supply chain hub. To achieve this, India must improve its manufacturing competitiveness and deepen its integration into global value chains.

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Source:

The Hindu

PRACTICE QUESTION

Q.Critically analyze the significance of the India-Middle East-Europe Economic Corridor (IMEEC) in enhancing India's trade and connectivity. (150 words)