West to back India-Middle East-EU transport corridor

West to back India-Middle East-EU transport corridor
India and Saudi Arabia demonstrated their independence from China and the softer version they see for the growing BRICS+ club by signing off on a mega-transport project with the US and EU on the sidelines of the G20 summit. / bne IntelliNews
By bne IntelliNews September 9, 2023

Having thrown in their lot with the China-led BRICS bloc expansion at a summit in August that saw six new members admitted to the BRICS+, India and the Kingdom of Saudi Arabia (KSA) thought they’d better take out some insurance against a global East-West confrontation.

On the sidelines of the G20 summit in New Delhi on September 8 the two countries agreed on a deal with the EU and US to build a India-Middle East-EU transport corridor that would tie their economies more closely together and act as rival to China’s Belt and Road Initiative (BRI) that is an overland connection between Asia and Europe.

The deal highlights the divisions within the BRICS bloc that were visible from the first day of the BRICS summit as to what the purpose of the club should be. China and Russia have made it clear that they want to create a geopolitical rival that can challenge the G7, whereas Prime Minister Narendra Modi made it clear at the BRICS summit in August that he doesn’t see the club as a rival to the West and called for co-operation between the developing and developed world.

Washington and Brussels will see the transport corridor deal as a major diplomatic victory that will drive a wedge between the more liberal members of the BRICS like India and the more hard-line members like China and Russia.

Anticipating this possible loss of face, notably Chinese President Xi Jinping chose to stay away from the event that should have been another platform to project Chinese power amongst the emerging world. As bne IntelliNews reported, another crack that had already appeared in the brand new BRICS+ façade was Beijing’s publication of a controversial “standard map” a week earlier, which caused outrage by annexing on paper through the redrawing borders of territories that belong to India, Nepal, Russia, Vietnam, Malaysia and all of Taiwan, prompting protests from foreign ministries across the region. India was particularly angry and lawmakers issued their own tongue-in-cheek map of “India 3.0” that included all of China as part of India.

Russian President Vladimir Putin also stayed away from the summit, unable to travel abroad due to an arrest warrant issued by the ICC in March; he is charged with kidnapping children from Ukraine. Russian veteran Foreign Minister Sergei Lavrov went in his place.

KSA’s decision to participate is also telling, as the inclusion of the Kingdom in the expanded BRICS came as a surprise and has been taken as a further distancing from its traditional strategic ally America, with which relations have cooled noticeably in recent years. However, participating in the transport corridor project with the US will redress the balance somewhat and underscores KSA’s multi-vector foreign policy that is driven by national interest. Riyad is also signalling that it will keep some distance from Beijing and not unconditionally support the latter's increasingly aggressive policies towards the US.

This project aims to establish a ship and rail corridor connecting India to the Middle East and beyond, crossing Saudi Arabia and the United Arab Emirates. It will also include a new undersea cable and energy transport infrastructure, the Financial Times reported.

A memorandum of understanding (MoU) is expected to be signed by US President Joe Biden and Indian Prime Minister Narendra Modi. While no binding financial commitments have been made, the project is viewed as a significant step towards enhancing connectivity and trade routes.

The corridor is expected to facilitate the flow of commerce, energy and data between India, the Arabian Gulf and Europe.

“This is nothing less than historic. It will be the most direct connection to date between India, the Arabian Gulf and Europe,” European Commission President Ursula von der Leyen said of the deal. “It is a green and digital bridge across continents and civilisations,” she said, adding that the rail link would make trade between India and Europe 40% faster.

The deal will also support the Biden administration's efforts to normalise relations between Israel and Saudi Arabia, aligning the latter more closely with the US and its allies.

The EU's involvement in the agreement was negotiated during a visit by von der Leyen to Abu Dhabi, where discussions focused on deepening trade and investment ties with Gulf countries. This collaboration aligns with the EU's Global Gateway project, which is its answer to China’s BRI.

While ambitious cross-border infrastructure projects in the Arab world have historically faced challenges, this new corridor project is seen as a high-standard, non-coercive initiative that appeals to the countries involved and aims to provide transparent and responsible infrastructure development.

In addition to the India-Middle East corridor, the US and EU will also announce a trans-African corridor project between the Democratic Republic of Congo, Zambia and Angola, designed to enhance trade in raw materials such as copper.