L&T, GMR, Adani getting active along India-ME-Europe Corridor – ET Infra

NEW DELHI: While the formal announcement of the India-Middle East-Europe Economic Corridor was made at the G20 Summit on Saturday, Indian companies in the infrastructure and energy sector, have already started and are planning to undertake mega projects, all along the proposed corridor and in the process are spearheading India’s geopolitical interest. The corridor which will connect India, United Arab Emirates, Saudi Arabia, Jordan, Israel, Greece and from thereon to major economies of Europe-France, Germany, Italy-will not just be a trade route helping to make India-Europe trade time 40% faster, but is also envisaged to be corridor of rail link, digital as well as infrastructure network for electricity and clean energy.

While Adani Group has been the most high profile one among Indian conglomerates, with acquisition of Haifa Port in Israel last year in July, other infrastructure heavyweights such as Larsen & Toubro and GMR Group have also lined up their investments.

AN ECONOMIC CORRIDOR ALREADY IN THE MAKING

A senior official from Larsen & Toubro disclosed that the engineering and construction major is looking to bid for railway projects in the Middle East such as the Oman-UAE Railway Network Project, which will connect UAE’s Abu Dhabi with Muscat and Sohar Port in Oman. If the regional rail network between the two countries becomes part of the economic corridor then ships from India will be able to dock in at Sohar Port, located in northern Oman or Fujairah Deep Sea Port in northern UAE, without traversing through the volatile Strait of Hormuz.

“We will be getting into rail projects in a big way in the Middle East and are planning to bid for engineering tenders for the UAE-Oman rail project,” the official said on the condition of anonymity to ET Infra.

In Saudi Arabia, L&T is engaged in energy projects associated with the NEOM Project, launched by Saudi Arabia’s crown prince Mohammed bin Salman Al Saud, who has also been instrumental in envisaging the India-Middle East-Europe Economic Corridor.

L&T Construction will construct renewable energy infrastructure for the Green Hydrogen plant at NEOM, touted to be the world’s largest.

“We are proud to be associated with the project that will integrate 4GW of renewable energy to enable production of up to 600 tonnes of carbon-free hydrogen per day,” said T Madhava Das, Whole-Time Director and Senior Executive Vice President (Utilities), Larsen & Toubro in a statement in June.

Across the Mediterranean Sea in Europe, GMR Group, which already has a presence in undertaking development of Crete airport, in Heraklion, Greece, is looking to further expand its presence.

“GMR is passionately exploring investment opportunities in the country (Greece), notably at Kalamata Airport,” said Srinivas Bommidala, Business Chairman-Energy & International Airports of GMR Group in September.

According to reports in the Greek media, Adani Group is looking to undertake investments in the ports of Kavala in the European country to strengthen its presence in the Mediterranean region.

EXPERIMENTING WITH MULTIMODAL CONNECTIVITY

The economic corridor will provide opportunities to Indian logistics and infrastructure companies who have made investments in European operations.

“The investments in rail and shipping route capacities will bring down cost and transit times and position India well for meeting global product demands. It could not only be a credible alternative but perhaps a more viable and attractive route as compared to other initiatives in the neighbourhood,” said Adarsh Hegde, Managing Director, Allcargo Logistics Ltd to ET Infra.

Ursula von der Leyen, President of the European Commission at the G20 meeting outlined that the economic corridor will cut the trade time between India and Europe by 40%.

Allcargo Logistics specialises in multimodal logistics services and is present in the European logistics industry through its group company ECU Worldwide and provides services such as road haulage in the continent.

“The corridor is well timed given the traction around more and more manufacturers willing to move their facilities to India. Exports and imports are bound to go up. ME (Middle East) and Europe being amongst our strongest partners help. Plus, it is a robust way to test multi-modality in Europe,” said a supply chain and logistics sector analyst based in Dubai. The expert added that Indian companies have already started expanding westward which will enable seamless exchange of knowledge.

“Further, with Vadhawan (port) expected this year, as in terms of announcement, I am confident that it will be India’s time to develop a deep sea port and manage a part of supply as well,” the analyst said.

“The initiative marks a significant milestone in the realm of international trade and people to people connectivity through maritime and multimodal connectivity, bolstering logistics capabilities, and improving freight infrastructure. This positions Bharat as a central global hub for maritime commerce. Our commitment to this endeavour reinforces our belief in the sector and development of top-tier port and logistics facilities,” said Rajiv Agarwal, Managing Director and Chief Executive Officer, Essar Ports.

SAUDI ARABIA-ISRAEL RAPPROCHEMENT

The conception of the economic corridor would not have been possible without the geopolitical changes that have taken place in the Middle East in the last few years.

The normalization of the relationship between Israel and UAE under the Abraham Accords of 2020 has paved the way for enhanced political and economic cooperation between the two countries. Additionally, the regional grouping of India, Israel, UAE, and US, known as I2U2 established in 2021, has become a regional platform for enhancing India’s economic connectivity with the Middle East.

“We built the railway from Haifa to Beit Shean, close to the Jordan River bridges for a clear goal: Not only to serve the residents of the Galilee and of Beit Shean, but also to forge a future link between Haifa Bay and the Arabian Peninsula,” said Israeli Prime Minister Benjamin Netanyahu at a Cabinet meeting on Sunday.

“This vision, advanced by President Biden with the countries of Europe and the UAE, Saudi Arabia, of a transportation corridor of railways, maritime links, fiber optic cables and power lines, from India, through the Arabian Peninsula, through Israel, to Europe is an immense change,” he added.

Currently Saudi Arabia does not recognize the State of Israel but the former is taking proactive steps to improve relations with the Jewish state. In July 2022, Saudi Arabia allowed over flights to and from Israel through its airspace for all airlines and currently both the countries are undertaking diplomatic talks for normalising relations.

For India, good relations with all the participating countries has placed it in the sweet spot of geoeconomics.