In a bid to boost India's international trade and take advantage of the 'China + 1' sentiment in the global economy, the Indian government is stepping up efforts to launch the first phase of two major sea routes in 2024-25, multiple sources told Moneycontrol."Efforts are being made to include the first phase of the launch plans of the Eastern Maritime Corridor (EMC), between India and Russia, and the India-Middle East-Europe Economic Corridor (IMEEC), connecting India to the Middle East and Europe, in the interim budget for 2024-25," a senior government official told Moneycontrol.
The central government has asked officials to include first-phase funding, infrastructure development, and operational plans for both the EMC and the IMEEC in the interim budget, which will be presented on February 1, 2024, in order to not delay these projects due to the upcoming general elections.
"All parties (Indian ministries and their counterparts from Russia, Saudi Arabia, and the UAE) involved with both the EMC and IMEEC projects are working in tandem to start operations of the proposed new sea routes in early 2024-25," another senior government official said.
He added that while talks to start the EMC are in advanced stages, ports on the western coast of India are ready to start operations of the IMEEC trade route.
The central government is eager to finalise phase-I plans for the two trade routes by February as it is expected to boost public sentiment before the upcoming general elections, expected to be held between April and May 2024.
An interim budget is presented by the government when it does not have time to present a full budget. Mostly, it is done because general elections are around the corner. As per tradition, the government of the day leaves the task of framing the full budget to the incoming dispensation after the election results
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India-Middle East-Europe Economic Corridor
Three major ports on the west coast — the Jawaharlal Nehru Port Trust (JNPA), Deendayal Port Authority (Kandla), and the Mundra port — are expected to be part of the IMEEC.
"India has shared proposals to include JNPT, DPA, and Mundra port in the IMEEC, and is awaiting confirmation from other countries to move forward with the operationalisation of the trade route," the first government official said.
He added that developments on the IMEEC project are being discussed between the European Union, India, the UAE, France, Germany, Italy, Saudi Arabia, and the US on a fortnightly basis, as all countries are keen to start operations soon. These seven nations and the EU signed an agreement on the IMEEC in New Delhi during the G20 summit.
The Jebel Ali port in Dubai, Mina Zayed port in Abu Dhabi, and the Fujairah port are also expected to be part of the IMEEC, which will include two separate corridors: the east corridor connecting India to the Arabian Gulf, and the northern corridor connecting the Arabian Gulf to Europe.
The first corridor will include a shipping route connecting Mumbai and Mundra with the UAE, and a rail network connecting the UAE, Saudi Arabia, and Jordan with the Israeli port of Haifa to reach the shores of the Mediterranean Sea.
For the freight from Haifa port onward to Europe, the northern corridor comes into the picture. This corridor will start with the sea route from Haifa to three ports in Europe: Piraeus in Greece, Messina in south Italy, and Marseille in France. From those ports, existing European rail networks will take the freight to their final destinations.
External Affairs Minister Subrahmanyam Jaishankar last week said that while the situation in the Middle East was very complex, the IMEEC master plan remained intact.
“IMEEC is very much a part of the global legacy and has been a trade route for hundreds of years. There is enormous interest in Europe for the IMEEC and for a seamless logistics passage to India,” Jaishankar said.
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Eastern Maritime Corridor
Similarly, the second official said that developments about the EMC are at an advanced stage, with both the Indian and Russian governments speaking to major shipping lines to start operations from early 2024.
"Final EMC discussions between the Indian and Russian authorities are expected to happen in January, until then both governments will hold road shows to bring shipping lines on board," the second official said.
Last month, the Minister for Ports, Shipping, and Waterways, Sarbananda Sonowal, told Moneycontrol that India and Russia are in advanced discussions on new transport routes, such as the Northern Sea Route and the Eastern Maritime Corridor, between Vladivostok and Chennai.
"Discussions are at an advanced stage. On November 9, we are organising a global workshop where Russian and Indian officials will sit together to find a viable course of action," Sonowal had said in an interview with Moneycontrol on October 17 on the sidelines of the Global India Maritime Summit.
The shipping ministry is in discussions with five international shipping lines for a dedicated service between the ports of Chennai and Vladivostok.
Russian Consul General Oleg Avdeev, who was in Chennai last week, told news agencies that the first test voyage on the EMC was completed in October in just 17 days.
The EMC is estimated to reduce the time required to transport cargo between Indian and Russian ports of the far-east region by up to 16 days.
Once complete, it will take 24 days, down from over 40 days at present, to transport goods from India to Russia’s far east. The trade route between Mumbai and St Petersburg is about 8,675 nautical miles, which takes approximately 35 to 40 days to cover.
The corridor will not only boost trade between India and Russia through north-east Asia, but also aggravate China’s security concerns in the South China Sea and its grander aspirations with the Maritime Silk Route, the Institute for Security and Development Policy said.
The Russian Far East is rich in diamond, gold, and silver, and India is one of the largest exporters of jewellery, these will help grow the sector in the country.
The NITI Aayog and the Ministry for Development of the Russian Far East and Arctic signed a memorandum of understanding (MoU) in September 2019 with the aim to boost strategic partnership between New Delhi and Moscow. Per the MoU, both sides agreed to prepare a programme for 2020–25 for the development of the Russian Far East and Arctic region.
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