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China’s BRI now faces a credible Indian challenger, Infra News, ET Infra


<p> Chinese President Xi Jinping</p>
Chinese President Xi Jinping

The spectacular G20 summit in New Delhi could be termed as India’s coming out party. Not dissimilar to the 2008 Summer Olympics in Beijing, which was widely seen as China’s grand message of “arrival”. Curiously, in many aspects of national power, China 2008 and India 2023 have several analogues – not least in aggregate GDP measures, where China 2007 and India 2022 are at very similar levels!

Perhaps not entirely coincidentally, the biggest brass-tacks outcome of G20 was the India-Middle East-Europe Economic Corridor (IMEE-EC). A multi-modal connectivity initiative to link India with Europe via ports and rail corridors built in the Middle East (ME). It will, in theory, provide an alternative to the current trade connectivity through the Suez Canal. In conception and design, it looks to be an alternative to China’s ambitious BRI. An Indian BRI (Boats and Rail Initiative) to challenge China’s BRI? Sounds compelling beyond the wordplay, especially as China’s BRI runs into rough weather, including in the Indian subcontinent, primarily on financial sustainability issues.

At its core, IMEE-EC is a railway track across the Arabian deserts, buffeted by shipping connectivity from India on one end and Europe on the other. Not inconceivable to think of a rail track connecting the ports of Dubai and Haifa (in Israel), though that will require more political alignments to fall into place. Electricity, hydrogen and data pipes are also planned to run parallel to the rail tracks.

By having the US as the key sponsor, the initiative is well-endowed with political, techno-managerial and financial resources to give it the maximum chance of success. In stark contrast to BRI, presence of financially sharp stakeholders – the US, the UAE, Saudi Arabia, Europe and India – takes down risks of lop-sided financial outcomes drastically.

Importantly, IMEE-EC obviates knotty geopolitical issues embedded in India’s previous attempts at transport linkages with Europe via ME/Central Asia. The easiest land route, via Pakistan, has been a perpetual non-starter due to Indo-Pak issues. Chabahar port linkage, long discussed and worked upon, invariably fell to the risks of US sanctions on Iran. The more ambitious INSTC (International North-South Transport Corridor), linking India to the Eurasian landmass via rail/road/ports in Russia, Central Asia and Iran, had geopolitical challenges even before the war in Ukraine.

IMEE-EC has none of those binding geopolitical constraints. In fact, if it takes off, it might help cool some frayed political nerves in ME, as well as tackle some recent issues between ME and the US.

But IMEE-EC also, in some ways, represents India upping the stakes in ME, reclaiming some of its legacy as a successor state to the British Raj. Unbeknownst to many, ME as a regional construct was literally conceptualised and framed by British India. Lord Curzon, perhaps the most far-sighted of British administrators to serve in India, conceptualised the security of British India to be around the creation of a string of buffer states – Tibet to the north, Afghanistan to the north-west, entries to the Arabian Sea through ports in the Persian Gulf, entries to the Bay of Bengal from Malacca and Sunda Straits.

In a delightful book titled Inventing the Middle East, historian Guillemet Crouzet says the label of ME, coined around 1900, was “invented to describe a critical geopolitical space on the world map, a kind of nexus of different grids of power, and a crucible through which there ran a series of routes connecting London to British India”. So deep were British India’s roots in ME that for a long time several countries in the region used the Indian Rupee (INR) as legal tender, a practice discontinued only in the mid-1960s. India’s engagement with ME has ramped up in recent years. IMEE-EC promises to restore shades of Curzonian stakes, geo-economically at least.

But as it is with all initiatives, promise must meet performance. For starters, India’s own performance. China’s GDP grew from $3.55 trillion in 2007 to $12.3 trillion in 2017. India’s GDP is $3.4trn today – can we do a China in the next decade? The world’s a trickier place today. The Washington Consensus, the global politico-economic compact that enabled much of Asia to grow at breath-taking pace, is fraying at the margins. India’s job is tougher today. On the bright side, there’s a constellation of favourable stars too.

An uncertain geopolitical canvas lends itself to more opportunities for smart traders – and private-sector India is as smart a trader as any globally – to extract more value. India’s the only major country to be able to enjoy favourable demographics for some more time. Our credit cycle is near the bottom, with balance sheets in good shape. Digital Public Stack is opening many doors at a never-before scale.

In short, there are many boats to build, many rails to lay. But make no mistake, it’s a great idea.

  • Published On Sep 11, 2023 at 08:02 AM IST

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