Why this is important to Wisconsin businesses:
Wisconsin companies could use this opportunity to grow their exports to India, particularly in sectors such as infrastructure and transportation.
As world leaders gathered in New Delhi in September for the G20 Summit, an announcement was made in conjunction with the conference that could have a major impact on India and on global relations.
A Memorandum of Understanding was signed among the governments of India, the U.S., Saudi Arabia, the European Union, the United Arab Emirates, France, Germany, and Italy to establish the India-Middle East-Europe Economic Corridor (IMEC), bolstering infrastructure ties between Europe and Asia.
IMEC will establish a network of transportation routes, including railways and sea lanes, to increase trade among countries in South Asia, the Middle East, and Europe.
“This landmark corridor is expected to stimulate economic development through enhanced connectivity and economic integration across two continents,” a statement from the White House said.
The project involves links to commercial hubs to facilitate the development of clean energy, lay undersea cables and expand telecommunication lines to provide reliable access to electricity, and bring secure internet access to communities across Europe and Asia. The connections will also strengthen food security and manufacturing supply chains, the White House said.
President Joe Biden called it a “game-changing investment” for the U.S. He said the U.S. is committed to investing in a rail line from Angola toward the Indian Ocean, and said it is a crucial step to spur job creation and enhance food security.
The IMEC project is also seen as countering China’s plan to build new global trade routes, known as the Belt and Road Initiative. China’s massive project, also called the New Silk Road, was announced in 2013. It intends to create a vast network of railways, energy pipelines, highways, and streamlined border crossings both to the west, through the mountainous former Soviet republics, and to the south, to Pakistan, India, and the rest of Southeast Asia, according to the Council on Foreign Relations.
The IMEC announcement builds on the G7’s June 2023 pledge to raise $600 billion in private and public funds over five years for infrastructure projects in developing countries. IMEC’s plan to facilitate hydrogen energy transports also aligns with the interests of the U.S. and the EU to transition Europe away from Russian fossil fuels.
European Commission President Ursula von der Leyen anticipates that IMEC will make trade between India and Europe 40% faster, while reducing costs by 30%.
IMEC could create opportunities for Wisconsin companies involved in transportation, telecommunication, infrastructure, and overall trade.
