FM reaffirms commitment to Middle East-EU corridor
Notwithstanding the turmoil in West Asia, Finance Minister Nirmala Sitharaman on Thursday reaffirmed New Delhi’s commitment to the India-Middle-East-Europe Economic Corridor, which was launched last year.
Sitharaman, who presented the interim budget for 2024-25 in the Lok Sabha, said that the corridor would be a strategic and economic game changer for India and others.
She also quoted Prime Minister Narendra Modi saying that the corridor would “become the basis of world trade for hundreds of years to come”, and “history would remember that this corridor was initiated on Indian soil”.
Sitharaman proposed to allocate Rs 22,154 crore for the Ministry of External Affairs (MEA) for the 2024-25 financial year, raising it from Rs 18,050 crore in 2023-24.
Despite escalating tension between New Delhi and Malé, she proposed to allocate Rs 600 crore as India’s development assistance for the Maldives, against Rs 770 crore earmarked for the infrastructure projects in the neighbouring country in 2023-24. Sri Lanka will get Rs 75 crore and Mauritius will receive Rs 370 crore as development aid from India in 2024-25, according to the interim budget proposed by the finance minister, who also proposed to allocate Rs 250 crore for Myanmar. The largest share of India’s development aid has been proposed for Bhutan with an allocation of Rs 2,068 crore, lower than the 2400 crore earmarked last year.
The ambitious India-Middle-East-Europe Economic Corridor or the IMEEEC was formally launched on the sideline of the 18th G20 summit, which the prime minister hosted at Bharat Mandapam in New Delhi on September 9 and 10 last year.
Though the Israel-Hamas conflict in the Gaza Strip and the wider turmoil in West Asia cast a shadow on the fate of the proposed corridor over the past few months, Sitharaman on Thursday signalled that New Delhi was still relying on the project.
The proposed corridor will comprise an eastern corridor connecting India to the Gulf region and a northern corridor connecting the Gulf region to Europe. It will include a railway and ship-rail transit network and road transport routes.
India will be linked to Europe by a railway line and existing ports through the UAE, Saudi Arabia, Jordan, and Israel. It will generate economic growth while incentivizing new investments and the creation of quality jobs. The corridor will connect the two continents to commercial hubs and facilitate the development and export of clean energy. It will support existing trade and manufacturing synergies and strengthen food security and supply chains.
It will also link energy grids and telecommunication lines through undersea cables to expand reliable access to electricity, enabling innovation of advanced clean energy technology and connecting the communities to secure and stable Internet.
The finance minister said that geopolitically, global affairs were becoming more complex and challenging with wars and conflicts. She noted that globalization was being redefined with reshoring and friend-shoring, disruption and fragmentation of supply chains, and competition for critical minerals and technologies. “A new world order is emerging after the COVID-19 pandemic,” she said, presenting the interim budget in the Lok Sabha.
The minister stated that India had assumed G20 Presidency during very difficult times for the world. She highlighted that the global economy was going through high inflation, high interest rates, low growth, very high public debt, low trade growth, and climate challenges. She said that the pandemic had led to a crisis of food, fertilizer, fuel and finances for the world, while India successfully navigated its way. India, however, showed the way forward and built consensus on solutions for those global problems, she added.