Trade India
During Indian Prime Minister Narendra Modi’s visit to France this week, French President Emmanuel Macron highlighted Marseille as a potential entry point for a future India-Europe trade corridor via the Middle East. The visit culminated in a trip to the Mediterranean port city, where Macron presented Marseille as a key European hub for the anticipated trade through the India-Middle East-Europe Economic Corridor (IMEC). This corridor, unveiled at the 2023 G20 summit in New Delhi, aims to establish a railway and maritime route to boost trade between India and Europe, passing through Israel, the United Arab Emirates (UAE), and Saudi Arabia. It has been positioned as a possible competitor to China’s Belt and Road Initiative (BRI). The initiative was primarily advocated by the US under former President Joe Biden, with France, Italy, and Germany joining India, Saudi Arabia, and the UAE as co-signatories.
“Marseille can clearly be the entry point for the entire European market,” Macron stated on Wednesday, referring to IMEC as a “fabulous catalyst” for “concrete projects and investment.” During his visit to Marseille, PM Modi attended a presentation by the CMA CGM Group, a French shipping and logistics company keen to contribute to the realization of IMEC. Modi shared on social media, “As India expands its maritime and trade networks, collaborations with industry leaders will be essential for enhancing connectivity, supply chains, and economic growth.”
FRANCE SEEKS A PROMINENT ROLE IN THE INDIA TRADE CORRIDOR
Last year, Macron designated a special envoy for IMEC to define France’s role in the project. Indian analyst Swasti Rao noted that while France is undoubtedly a vital conduit for Indian trade with the European Union (EU), Marseille is not the sole contender. “The port in Marseille certainly has significant capacity, but India is also considering other entry points into Europe, such as the Trieste port in Italy,” she told DW. Italy is reportedly planning to appoint a special envoy for IMEC to strengthen its involvement in the initiative.
IMEC’S NUMEROUS CHALLENGES
However, experts pointed out that the path to IMEC—a proposed 4,800-kilometer (2,983-mile) network of ports, railways, and other transport routes traversing geopolitical hotspots—is fraught with challenges. The most pressing issue is the financing of IMEC. Saudi Arabia has pledged an investment of $20 billion (€19.1 billion), but experts believe that significantly more funding will be necessary to establish the infrastructure needed for improved connectivity. So far, the EU has not allocated any funds for IMEC. The corridor is designed to offload Indian goods at Khalifa Port in the UAE, transfer them by train through Saudi Arabia and Jordan to Israel’s port of Haifa, and then transport them across the Mediterranean to Europe. However, a substantial portion of the required rail network is absent in the Middle East.
Moreover, challenges also arise from India’s manufacturing capacity. China currently stands as the largest exporter to the EU, while India ranks as the EU’s ninth-largest trading partner. India relies heavily on imports from China, raising concerns that its dependence on Chinese products could leave European nations vulnerable to Chinese supply chains. Additionally, the ongoing Israel-Hamas conflict and the resulting regional instability, following the Hamas-led attack on Israel on October 7, have cast doubt on the normalization prospects between Saudi Arabia and Israel, further complicating the feasibility of IMEC through the Middle East.
FRANCE AS ‘INDIA’S EPICENTER’ IN EUROPE
While progress on IMEC may be slower than anticipated, Modi’s visit indicates that India is ready to strengthen its bilateral and business relations with France. “From India’s perspective, IMEC was an ideal opportunity to create more routes, but then the Middle East situation deteriorated,” analyst Rao remarked. “Now we are saying, ‘Let’s work on IMEC, but simultaneously seek better connectivity with Europe,'” she added. “France is India’s epicenter in Europe,” she noted, emphasizing that bilateral cooperation aims to enhance overall trade with the EU—regardless of whether IMEC materializes.
INDIA EYES FRENCH FIGHTER JETS
A significant aspect of this trade is emerging in the form of defense agreements. Sources informed DW, and Indian media reported, that India is likely to acquire 26 French-made Rafale fighter jets, supplementing the 33 already in service with the Indian Air Force (IAF). Additionally, three French Scorpene submarines are on the table, alongside the six already purchased by the Indian navy. The total value of these arms deals is approximately €10.6 billion. “Indian forces are moving away from Russian equipment,” following the situation in Ukraine, stated Delhi-based defense analyst Rahul Bedi. For years, Russia has been India’s primary defense supplier, but Bedi noted that the quality of French defense equipment surpasses that of Russian offerings.
