Middle-East ‘Rail-Bridge’

The national security advisers of the US, Saudi Arabia, the UAE and India discussed a joint project to link the Gulf countries with a railway network which will be well connected through sea-lanes with India. The proposed ‘Land-Bridge’ is envisaged for improving connectivity of the region with India and Europe.

If implemented successfully, it will provide an alternate route for Indian exporters to the Gulf, Arab, European and even African markets. The scope of project, at the initial phase, is to connect UAE and Saudi Arabia with India, but it finally aims to extend the railway project up to a port of Haifa, in Israel.

The Port of Haifa is co-developed and managed by India’s Adani Enterprises. It will play a crucial role in facilitating direct access to Indian exporters to thriving markets of Gulf and even beyond.

Furthermore, it is also touted to offer double benefits for India as the US intends to use Indian railway expertise and experience to build a railway project in the Gulf’s desert. It is therefore, important to understand the evolving geo-strategic dynamics of this logistics corridor from an Indian perspective.

The proposed ‘Land-Bridge’ project is envisaged under the US initiative of ‘Build Back Better’ World (B3W) which

aims to address the infrastructure deficit of $40 trillion in developing countries and to save them from China’s debt trap policy. Firstly, it will help the United States to remain engaged in in the Middle-East Region as China’s dominance in the region in all spheres, infrastructure development under its BRI projects along with its sustained economic and political diplomacy.

Secondly, the US also aims to counter the existing infrastructure project ‘North-South Economic Corridor’, being jointly developed by Russia, India and other member states.

One of the major concerns for the project is that of finances — sources and mobilisation. Any of the US infrastructure project financing under B3W is envisaged to be based on private financing. This is a major weakness of the entire project and resultantly B3W never took off as a viable alternative to China’s BRI project.

In emerging markets where there are long gestation periods, high regulatory costs and significant risks, private investors will also expect a higher return, which will make projects more expensive and at times even un-bankable.

India’s Considerations

For India the project aims to enhance its logistics connectivity with the Gulf region, which can be extended to African nations via Egypt, and beyond thereby boosting India’s trade competitiveness.

It offers India access to European markets and provide an additional access route, bypassing Suez Canal. More so, it also help counter the ever-growing dominance of China in the region.

The project can start from the Gulf’s largest port, Jebel Ali, and can connect commercial hubs like Abu Dhabi, Riyadh, Amman and finally ending at Port of Haifa (Israel).

However, India should continue to deepen its economic engagements with the Iran, Central Asian markets and Russia given its significant dependence on these countries for energy needs. India’s foreign policy considerations must be shaped by its domestic economic imperatives.

Moreover, we should initially vouch the commitment of member-countries for assured, systematic and affordable financing for this project. India can offer its expertise, workforce, technology and experience in this rail project, capital must come the US or from the Gulf states. Lastly, our commitment to this ‘Land-Bridge’ should not be at the cost of diplomatic relations and commitment of multi-polar order.

Ram Singh is Professor, Indian Institute of Foreign Trade, New Delhi; and Surender Singh is Associate Professor, FORE School of Management, New Delhi. Views expressed are personal.

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