NEW DELHI: India, US, Saudi Arabia and the European Union on Saturday announced a multinational rail and ports deal on the sidelines of the G20 summit with an aim to counter China’s ambitious Belt and Road Initiative (BRI).
The mega joint infrastructure deal, which has been in the works for awhile, is a major highlight of the ongoing G20 meeting in Delhi.
The deal was announced by Prime Minister Narendra Modi with US President Joe Biden, Saudi crown prince Mohammed bin Salman and leaders of EU.
“Today we all have reached an important and historic partnership. In times to come, it will become effective medium for economic integration of India, Middle East and Europe,” PM Modi said at the launch of the new corridor.
Biden said that the pact symbolises the G20 theme of “One earth, One family, One future”.
“This is a big deal,” the US President remarked. “This is a really big deal.”
Modern-day spice route
The ambitious plan seeks to bolster trade between India, the Middle East as well as Europe and establish a modern-day Spice Route to bind regions that account for about a third of the global economy.
Officials told AFP the plan would include a slew of data, rail, electricity and hydrogen pipeline projects.
One proposed project would link railway and port facilities across the Middle East — including the United Arab Emirates, Saudi Arabia, Jordan and Israel — speeding trade between India and Europe by up to 40 percent.
“This is nothing but historic,” European Commission president Ursula von der Leyen said while announcing the corridor.
Reports said that India will be connected through shipping lanes from ports in the region.
Additionally, a US-supported proposal to expedite land-trade routes between Gulf Arab countries and the Mediterranean Sea has also been discussed among Israel and Gulf nations.
“We look forward to the integration of the initiative and the Economic Corridor project which is announced in this meeting. I would like to thank those who worked with us to reach this founding step to establish this important economic corridor,” the Saudi crown prince said during the announcement.
A game-changer
The plan is expected to be a possible game changer for global trade, presenting an alternative to China’s wide-ranging strategic infrastructure investments.
Jon Finer, President Biden’s deputy national security adviser, earlier said that the proposed memorandum of understanding include the United States, India, Saudi Arabia, the United Arab Emirates, the European Union and other countries.
He said first that the corridor would increase prosperity among the countries involved by increasing the flow of energy and digital communications.
Second, the project would help to address the lack of infrastructure needed for growth in lower- and middle-income nations.
And third, Finer said it could help “turn the temperature down” on “turbulence and insecurity” coming out of the Middle East.
Countering China
The US push comes as Saudi Arabia and the UAE, both old allies of US, have been strengthening their ties with China as they seek to enhance relations with rapidly growing eastern economies.
China has also boosted ties with the Middle East of late, helping to broker a detente between Saudi Arabia and Iran earlier this year.
Last month, the oil-rich Gulf states announced their intention to join the Brics group of emerging market nations, with China playing a leading role in this move.
The plan is being seen as an ambitious effort by Washington to counter China’s Belt and Road initiative that sought to connect more of the world to the country’s economy.
It is being announced just a month before China’s Xi hosts global leaders for the third Belt and Road Forum in Beijing. Russia’s Vladimir Putin is also expected to attend the event.
The US in recent years has sought to counter President Xi Jinping’s ambitious infrastructure plan, which has financed hundreds of billions of dollars worth of projects in emerging markets.
Of late, China’s BRI has been facing a series of troubles due to rising loan defaults and slowing down on investments.
(With inputs from agencies)
The mega joint infrastructure deal, which has been in the works for awhile, is a major highlight of the ongoing G20 meeting in Delhi.
The deal was announced by Prime Minister Narendra Modi with US President Joe Biden, Saudi crown prince Mohammed bin Salman and leaders of EU.
“Today we all have reached an important and historic partnership. In times to come, it will become effective medium for economic integration of India, Middle East and Europe,” PM Modi said at the launch of the new corridor.
Biden said that the pact symbolises the G20 theme of “One earth, One family, One future”.
“This is a big deal,” the US President remarked. “This is a really big deal.”
Modern-day spice route
The ambitious plan seeks to bolster trade between India, the Middle East as well as Europe and establish a modern-day Spice Route to bind regions that account for about a third of the global economy.
Officials told AFP the plan would include a slew of data, rail, electricity and hydrogen pipeline projects.
One proposed project would link railway and port facilities across the Middle East — including the United Arab Emirates, Saudi Arabia, Jordan and Israel — speeding trade between India and Europe by up to 40 percent.
“This is nothing but historic,” European Commission president Ursula von der Leyen said while announcing the corridor.
Reports said that India will be connected through shipping lanes from ports in the region.
Additionally, a US-supported proposal to expedite land-trade routes between Gulf Arab countries and the Mediterranean Sea has also been discussed among Israel and Gulf nations.
“We look forward to the integration of the initiative and the Economic Corridor project which is announced in this meeting. I would like to thank those who worked with us to reach this founding step to establish this important economic corridor,” the Saudi crown prince said during the announcement.
A game-changer
The plan is expected to be a possible game changer for global trade, presenting an alternative to China’s wide-ranging strategic infrastructure investments.
Jon Finer, President Biden’s deputy national security adviser, earlier said that the proposed memorandum of understanding include the United States, India, Saudi Arabia, the United Arab Emirates, the European Union and other countries.
He said first that the corridor would increase prosperity among the countries involved by increasing the flow of energy and digital communications.
Second, the project would help to address the lack of infrastructure needed for growth in lower- and middle-income nations.
And third, Finer said it could help “turn the temperature down” on “turbulence and insecurity” coming out of the Middle East.
Countering China
The US push comes as Saudi Arabia and the UAE, both old allies of US, have been strengthening their ties with China as they seek to enhance relations with rapidly growing eastern economies.
China has also boosted ties with the Middle East of late, helping to broker a detente between Saudi Arabia and Iran earlier this year.
Last month, the oil-rich Gulf states announced their intention to join the Brics group of emerging market nations, with China playing a leading role in this move.
The plan is being seen as an ambitious effort by Washington to counter China’s Belt and Road initiative that sought to connect more of the world to the country’s economy.
It is being announced just a month before China’s Xi hosts global leaders for the third Belt and Road Forum in Beijing. Russia’s Vladimir Putin is also expected to attend the event.
The US in recent years has sought to counter President Xi Jinping’s ambitious infrastructure plan, which has financed hundreds of billions of dollars worth of projects in emerging markets.
Of late, China’s BRI has been facing a series of troubles due to rising loan defaults and slowing down on investments.
(With inputs from agencies)