Saudi Arabia, India, U.S. and EU launch economic corridor to increase trade

Subject: IR

Section: Groupings

Context:

India and Saudi Arabia have joined the European Union and the United States in launching the Partnership for Global Infrastructure and Investment (PGII) and India-Middle East-Europe Economic Corridor.

PGII:

The Partnership for Global Infrastructure and Investment (PGII) is a collaborative effort by Group of Seven (G7) to fund infrastructure projects in developing nations based on the trust principles of the Blue Dot Network.
It is considered to be the bloc’s counter to China’s Belt and Road Initiative and a key component of the “Biden Doctrine”.
Announced in June 2022 during the 48th G7 summit in Germany.
It is a repackaged version of the Build Back Better World (B3W) initiative which President Biden announced at the 47th G7 summit in the United Kingdom.

Strategic Partnership Council (SPC):

India-Saudi Strategic Partnership Council was formed to coordinate on strategically important issues. The council will be headed by the Prime Minister and Crown Prince Mohammed and will meet every two years.
India is the fourth country with which Saudi Arabia has formed such a strategic partnership, after the UK, France and China.
India is the second largest trading partner of Saudi Arabia and bilateral trade between the two sides reached $52.75 billion during 2022-23.

New members of BRICS Group:

Current members: Brazil, Russia, India, China and South Africa.
A total of six countries will join the BRICS on 1 January 2024:
- Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, United Arab Emirates.

Multimodal transport and Energy Corridor (MTEC):

Proposed between: India- Saudi Arabia- UAE- Europe- USA
It will connect: India- Middle East- Europe
The project could include other nations like Israel.
The project would involve:
- building of a railway line across the Arabian peninsula through Saudi Arabia and the UAE.
- Develop shipping connectivity to India and Europe.
- Transport energy through pipeline and data through optical fiber network.
Significance of the project:
- India can avoid involvement of Pakistan for its connectivity to the west, specially Afghanistan and Central Asia.
- Increased connectivity with Iran and Eurasia.
- It is seen as an alternative to China’s belt and road initiative.
- It will also mobilize Europe in the development of infrastructure (EU has earmarked 300 million euros for infrastructure development worldwide for a period of 2021-2027)..
- The USA and EU have planned to build a Trans African Corridor that will connect Angola, Democratic Republic of Congo and Zambia. India is willing to join it to become deeply involved with Africa.