India-Europe rail, power, hydrogen link to beat China

NEW DELHI: India, the United States, Saudi Arabia, the United Arab Emirates and the European Union, unveiled an ambitious plans to create a modern-day Spice Route linking Europe, West Asia and India, that could rival China’s Belt and Road Initiative (BRI) — boosting trade ties with potentially wide-ranging geopolitical implications.

The new initiative would link railways, ports, electricity and data networks and hydrogen pipelines and was evolved on the sidelines of the Group of 20 summit in New Delhi.

Although heavily trade-focused, the scheme could have wide-ranging implications — including developing contacts between long-time foes Israel and Saudi Arabia.

Speaking at a special event to announce the project that was co-chaired by Prime Minister Narendra Modi and United States President Joe Biden and attended by leaders of Saudi Arabia, the UAE, France, Germany, Italy and the European Commision, PM Modi termed it a “historic and important agreement” and said it would be a “medium of economic integration and global connectivity in a sustainable direction”.

Taking a veiled dig at China, Modi said the need was for projects that followed international rules and respect for the territorial integrity of nations, adding that it should also have financial viability and not create a debt burden. He also said the need was for reducing the infrastructure gap in the Global South.

Signatories hope it can help integrate India's vast market of 1.4 billion people with countries to the west, offer a counterbalance to lavish Chinese infrastructure spending, boost Middle Eastern economies and help normalise relations between Israel and Gulf Arab states.

“This is a real big deal,” said Biden at the launch event, calling the plan “historic,” and a “game-changer.”

European Commission President Ursula von der Leyen said the so-called India-Middle East-Europe economic corridor was “much more than 'just' a railway or a cable.” She said: “It is a green and digital bridge across continents and civilisations.”

One proposed project would link railway and port facilities across West Asia — including the UAE, Saudi Arabia, Jordan and Israel — potentially speeding trade between India and Europe by up to 40 per cent.

Pramit Pal Chaudhuri, South Asia practice head at the Eurasia Group, told AFP that a shipping container that travels from Mumbai through the Suez Canal to Europe could in the future go by rail from Dubai to Haifa in Israel and on to Europe, saving both money and time.

At present, the Suez Canal is a major bottleneck to world trade, handling roughly 10 percent of global maritime trade but often beset by disruptions.

The plan neatly aligns with several of Washington's goals in West Asia, and officials say the United States is keen to see the projects take flight.

AFP reported Michael Kugelman, South Asia Institute director at The Wilson Centre, as saying the plan could be a significant response to China's much-vaunted Belt and Road Initiative. The so-called BRI has spread Chinese influence, investments and commerce across Europe, Africa, Asia and Latin America.

“If finalised, it would be a game changer that strengthens connectivity between India and the Middle East and would aim to counter BRI,” Kugelman posted on X, formerly known as Twitter.