How India is Building the India Middle East corridor? : Geopolitical Case Study
Summary
TLDRThe video script discusses the strategic diplomatic efforts of Dr. J Shankar, India's External Affairs Minister, particularly during the Russia-Ukraine war and the Israel-Palestine conflict. It highlights how India secured discounted oil from Russia, curbing inflation, and maintained strong relations with both sides in the Middle East. The script introduces the India Middle East Economic Corridor (IMEC), a historic trade route that promises to bypass the Suez Canal, reduce shipping costs and time, and strengthen international ties. It also touches on the importance of securing undersea data cables and the potential of renewable energy corridors. The video concludes with lessons on diplomacy and strategic neutrality in international relations.
Takeaways
- 🌟 Dr. J Shankar's diplomacy has significantly bolstered India's reputation and relationships on the global stage, particularly during the Russia-Ukraine conflict.
- 🛢️ India secured discounted oil from Russia, which helped curb inflation in 2021, by navigating the pressure from the West.
- 💹 The India Middle East economic Corridor (IMEC) is a strategic trade route proposed by India, US, Europe, and Arab Nations to diversify from the Red Sea-Suez Canal route.
- 🚂 IMEC offers a faster and more cost-effective alternative to the traditional route, with the potential to reduce shipping costs by 30% and time by 40%.
- 🌐 The IMEC also includes plans for a trans-Eurasia cable system to protect data cables from geopolitical threats and avoid maritime choke points.
- 🔌 The interconnected solar grid and hydrogen corridor are part of IMEC, aiming to accelerate the adoption of renewable energy.
- 🤝 India's non-alignment strategy has allowed it to maintain strong relationships with both Russia and the West, as well as with Israel and Arab countries.
- 📈 The IMEC positions India at the center of world trade, with potential economic benefits for the country and its partners.
- ⚖️ Dr. J Shankar's diplomatic approach demonstrates the importance of strategic economic and security considerations in international relations.
- 👉 Entrepreneurs and businesses can learn from India's diplomatic strategies to navigate complex global situations and protect their interests.
- 💡 The art of diplomacy, as exemplified by Dr. J Shankar, involves skillful communication and negotiation to achieve favorable outcomes.
Q & A
What significant actions has Dr. J Shankar taken since becoming the External Affairs Minister of India?
-Dr. J Shankar has taken actions that have bolstered India's reputation and relationships during the Russia-Ukraine war. He protected India from Western pressure, allowing the country to secure discounted oil from Russia, which helped curb inflation in 2021.
How did India manage to navigate the geopolitical tensions during the Russia-Ukraine conflict?
-India strategically sold services to the US and bought oil from Russia, positioning itself in a sweet spot of world trade without facing sanctions. This was achieved by not openly supporting Moscow's invasion and maintaining a neutral stance.
What is the India Middle East Economic Corridor (IMEC) and why is it significant?
-The India Middle East Economic Corridor (IMEC) is a proposed trade route that aims to reduce dependence on the Suez Canal and provide an alternative to China's Belt and Road Initiative. It is significant because it connects countries with a combined GDP of $47 trillion and is seen as a crucial instrument for global economic growth.
How does the IMEC address the issue of geopolitical tensions affecting trade routes?
-The IMEC provides an alternative trade route that bypasses traditional maritime choke points, such as the Suez Canal, by using a combination of shipping lanes, railways, and undersea cables passing through various countries.
What are the benefits of the IMEC for India's economy?
-The IMEC is expected to reduce shipping costs by 30% and decrease shipping time by 40% compared to the Suez Canal route. It also strengthens relationships with Europe, the US, and Arab countries, and positions India at the center of world trade.
What is the importance of the undersea data cable network for global communication?
-The undersea data cable network is crucial as it supports 95% of global communication data flows, including personal communications and digital transactions. Any disruption to these cables can lead to significant drops in internet capability or complete loss of access.
How does the IMEC address the risk of undersea data cable disruptions?
-The IMEC includes the Trans EUR Asia Cable System, a 20,000 km cable network connecting Mumbai and Marseille in France. This system avoids maritime choke points and goes via land through the UAE and Saudi Arabia, providing a secure alternative to existing undersea cables.
What are the geopolitical implications of the IMEC for India's relationships with other nations?
-The IMEC enhances India's strategic position by fostering strong diplomatic and trade relationships with both Western nations and Russia, as well as with Israel and Arab countries, despite ongoing conflicts.
What lessons can entrepreneurs learn from India's diplomatic strategy as highlighted in the script?
-Entrepreneurs can learn to prioritize their interests and maintain healthy relationships without aligning with any particular side, focusing on strategic economic and security considerations rather than emotional affinity.
How does the script describe the art of diplomacy in international relations?
-The script describes diplomacy as the art of tactfully addressing conflicts or disagreements in a way that maintains or even strengthens relationships, using Dr. J Shankar's handling of international relations as an example.
What is the role of the India Middle East Economic Corridor in countering China's influence in global trade?
-The IMEC serves as an alternative to China's Belt and Road Initiative, providing a different route for global trade that does not rely on Chinese-controlled infrastructure, thus reducing dependency and potential influence of China in global trade dynamics.
Outlines
🌏 Dr. J Shankar's Diplomatic Strategies and India's Economic Growth
This paragraph discusses the diplomatic efforts of Dr. J Shankar, India's External Affairs Minister, and their impact on India's economic growth and international relations. It highlights how Dr. Shankar navigated the geopolitical tensions during the Russia-Ukraine war, securing discounted oil from Russia, which helped curb inflation in India. The paragraph also touches on India's strategic position in global trade, its non-alliance strategy, and the India Middle East Economic Corridor, which is set to become an alternative to China's Belt and Road initiative. The economic corridor is a significant development, involving multiple countries and sectors, and is seen as a counterbalance to China's rising influence.
🚢 The Red Sea Route and Its Impact on Indian Trade
This section delves into the critical nature of the Red Sea and Suez Canal route for India's trade with Europe, which carries a significant portion of India's trade and crude oil imports. It outlines the problems associated with this route, such as the risk of blockages leading to increased shipping costs and geopolitical tensions in the region. The paragraph emphasizes the vulnerability of this single shipping route and the potential economic repercussions for India if it were to be disrupted, such as the need for a lengthy detour around the Cape of Good Hope.
🔄 The India Middle East Economic Corridor (IMEC): A New Trade Route
The paragraph introduces the India Middle East Economic Corridor (IMEC) as an innovative solution to the challenges posed by the traditional Red Sea route. It describes the two legs of the IMEC, which offer an alternative route for trade that bypasses the Suez Canal. The Eastern leg involves shipping goods from Indian ports to a Middle Eastern port, followed by rail transport through Saudi Arabia and Jordan to Israel's Mediterranean coast. The Western leg then ships the goods to European ports. This new route is presented as a means to reduce dependence on the Suez Canal, offering faster and cheaper shipping options while strengthening relationships with Europe, the US, and Arab nations.
🌐 The Importance of Undersea Data Cables and the Trans EUR Asia Cable System
This section discusses the vital role of undersea data cables in global communication and the risks associated with them, such as potential damage that can disrupt internet access and telecommunication traffic. It highlights the strategic competition between China and the US in controlling these cables and China's aggressive expansion in this area. The paragraph introduces the Trans EUR Asia cable system, a 20,000 km network planned under the IMEC, which aims to connect Mumbai and Marseille, bypassing maritime choke points and offering a secure and direct route for data transmission.
🤝 Lessons in Diplomacy and Strategic Business Relations
The final paragraph reflects on the lessons that can be learned from India's diplomatic strategies and their application to business. It emphasizes the importance of focusing on one's own interests, especially in times of conflict, and the need for strategic economic and security considerations in international relations. The paragraph also touches on the art of diplomacy, suggesting that it involves tactfully navigating disagreements while maintaining positive relationships, a skill that entrepreneurs can apply in their business dealings.
Mindmap
Keywords
💡Dr. J Shankar
💡Russia-Ukraine War
💡Inflation
💡Energy Purchases
💡Diplomatic Non-Alliance Strategy
💡India Middle East Economic Corridor (IMEC)
💡Suez Canal
💡Undersea Data Cables
💡Geopolitical Tension
💡Renewable Energy
💡Diplomacy
Highlights
Dr. J Shankar's diplomatic efforts have bolstered India's reputation and relationships, particularly during the Russia-Ukraine war.
India secured discounted oil from Russia, helping to curb inflation in 2021 without succumbing to Western pressure.
India's energy purchases from Russia are minimal compared to Europe's, suggesting that buying Russian gas does not significantly fund the war.
India strategically sold services to the US and bought oil from Russia, positioning itself advantageously during the Russia-Ukraine conflict.
Dr. J Shankar criticized Europe's mindset that its problems are everyone's, but not vice versa.
India's non-alignment strategy has provided economic growth opportunities, such as the India Middle East economic Corridor.
In September 2023, India, US, UAE, Germany, Italy, and EU signed an agreement to place India at the center of world trade.
The India Middle East economic Corridor is being built as an alternative to China's Belt and Road Initiative.
Global leaders recognize the corridor as crucial for the world economy, with components like shipping lanes, railways, and undersea cables.
The corridor will pass through countries with a combined GDP of $47 trillion, offering significant economic potential.
Transcripts
hi everybody ever since Dr J Shankar has
taken office as the external affairs
minister he has done some incredible
things for the reputation and
relationship of India during the Russia
Ukraine war when the entire world was
pressurizing us to buy oil at a premium
Dr J Shankar protected us from the
pressure of the West so that we could
get discounted oil from Russia and that
helped India curb inflation in 2021 if
you're looking at energy purchases from
Russia I would suggest that your
attention should be focused on Europe
but I suspect looking at the figures
probably uh our total purchases for the
month would be less than what Europe
does in an afteron tell me buying
Russian gas is not funding the W I mean
why is it's only Indian money and oil
coming to India which funds but it's not
gas coming to Europe which FS while the
entire world got divided between
supporting the US and Russia during the
Russia Ukraine war we were very
strategically able to sell our services
to the US and buy oil from Russia the
Russian military has began a brutal
assault on on the people of
Ukraine without provocation without
justification without necessity this is
a premeditated attack he's attacked a
friendly country without any
[Music]
provocation while didn't openly support
Moscow in its invasion of Ukraine Europe
has to grow out of the mindset that
Europe's problems are the world's
problems but the world's problems are
not Europe's problems so we were
literally in The Sweet Spot of World
Trade without getting sanctioned
similarly now when the world is divided
into two parts because of the Israel
Palestine conflict because of our
diplomacy again we are best friends both
with the Israelis as well as the Arabs
now 99% of India Only Knows up to this
point but what they don't know is that
this diplomatic non-alliance strategy
even during the most critical times has
given India a golden instrument of
growth this instrument is called the
India Middle East economic Corridor to
tell you about it in September 2023 in
the G20 Summit India us UA Germany Italy
and EU we all came together to sign an
agreement that will put India at the
center of World Trade global leaders
announced a historic economic
trade Asia or Europe economic
and the upcoming economic Corridor is
being built as an alternative to China's
PR and this agreement is so so crucial
that all leaders across the world from
Muhammad bin Salman to Netanyahu to even
Biden have addressed this Corridor as a
crucial instrument of growth for the
world economy and this route has
everything from shipping lanes to
Railways to even under sea cables and
solar grids passing through countries
with a GDP of $47 trillion
and cherry on the cake this is perhaps
the best strategy for us to counter the
rising power of China this is one of the
most important contributions of Dr J
Shankar and his diplomatic Mastery over
international relations so in this
episode today let's try to understand
what is this India Middle East economic
Corridor how did J Shankar's diplomacy
help us build the India Middle East
economic Corridor how will it help the
economy of India and most importantly
what are the business lessons that we
can learn from this diplomatic Mastery
of India
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[Music]
out as usual let's start with the basics
you see the EU and us are India's
biggest trading partners and we trade
more than100 billion worth of goods and
as of now our trade happens through a
single shipping route this route is none
other than the Red Sea Swiss Canal route
and here's where there is a big big
problem so if a cloth manufacturer in
Mumbai wants to send his products to
Greece he would load his Goods in a ship
at gmpt Port and then this ship would
pass through the Arabian Sea get into
the Red Sea via babble day and then it
would cross the busy Swiss Canal to get
into the Mediterranean Sea and finally
it would reach Europe this journey takes
anywhere between 15 to 16 days similarly
65% I repeat 65% of India's crude oil
imports from Iraq and Saudi Arabia pass
through the Swiss canal and even a trade
with North Africa depends on this exact
same route now the reason why this is a
big big problem is because if anything
happens to this route our crude oil
prices will will Skyrocket our exports
will become costly and the Indian
economy will be drastically affected
because if this route is closed then the
ships will have to go all the way down
to the Cape of Good Hope around Africa
and then reach India and this route will
add another 8,900 km to the shipping
route and two more weeks to the shipping
time as a result the cost of a Goods
will shoot up and inflation will happen
in India now you might say bro what are
you saying we've been using this route
for 150 years now then how is this
suddenly a problem
today well firstly it is estimated that
30% of the container volumes and 12% of
the international trade occurs through
this region so there is a lot of traffic
in this single Channel and what makes
matters worse is that out of this 190
kilom odd Swiss Canal about 80 km as in
half of this canal is just a single Lane
so if any ship gets stuck over here or
even if there is a minor bombing that
happens in this Lane this Lane will be
closed for a very long time in fact we
all know what happened in 2021 when a
ship got stuck in this canal for just 6
days right now it's one of the world's
most important shipping routes and it's
blocked a giant container ship wedged
from bank to bank blocking one of the
world's most important shipping lanes
but this is no ordinary Highway blockage
nearly 19,000 ships pass through a year
more than 50 a day carrying around 12%
of the World's Trade volume ever given
which I'm sure you've been following is
is 400 m long carrying 18,000 containers
and it's been wedged across the canal so
just because of this one ship a large
chunk of the World Trade was stopped
there were huge delays and losses to the
Traders and insurance premiums went up
as a result there was a temporary Trade
crisis a shipping crisis and shortage of
goods were felt all across the world so
in short this is a very small and
congested route for World Trade secondly
there is a lot of geopolitical tension
in this region and a classic example the
same is the Red Sea conflict the war in
Gaza has spilled over into the Red Sea
with the hoodis attacking commercial
vessels in the globally critical
water Iran is not doing anything hisbah
is not retaliating but Yemen's huis are
doing a lot and if you remember from our
example because of the Red Sea conflict
because this region was blocked again
the ships had to go all the way down to
the ape of Good Hope and around Africa
to reach Europe so again shipping cost
and time both shot up this is how this
conflict alone increased the shipping
cost by 40 to 60% and caused delays of
re-rooting by 20 days eventually to lead
to a 15 15 to 20% high in insurance
premium and a ton of headache to the
Indian Industries this is a second
problem with the existing trade route
and lastly whenever a ship passes
through the Swiss Canal they have to pay
$400,000 to 700 ,000 to Egypt as a form
of tax almost like toll tax which again
increases the cost of trade these are
the major problems with the existing
Swiss Canal route so now the question is
what do we do we can't stop the
terrorist from attacking and we cannot
control geopolitics and the only
alternate route that we have adds
another 8,900 km to the shipping route
so what exactly is the
solution well it is shocking to know
that the entire world has been stuck
with this problem for one 150 years so
the question is what can we do
differently now well ladies and
gentlemen this is a reason why we have
something called the India Middle East
economic Corridor which has been
proposed by India us Europe and the Arab
Nations so the question over here is
what is so magical about this route that
it is now able to solve a 150y old
problem well let's try to understand
this by taking the same example as
before so let's say the same Trader in
Mumbai wants to send his clothes to
Europe and he's not not able to use the
Red Sea route due to the geopolitical
conflict but this time instead of the
long route from the Cape of Good Hope he
has a better alternative and that is the
IMC or India Middle East economic
Corridor IMC has two legs an Eastern leg
and a western leg in the Eastern leg he
would simply use the Indian ports like
Mundra or gmpd and this ship would take
his Goods to a middle eastern Port like
jabali port in the UA then these Goods
would move by rail from the jabel port
in UAE to Israel's hafia port on the
Mediterranean Coast after transiting
through Saudi Arabia and Jordan and then
the Western leg of the corridor would
put these containers back on the ships
in hafia and then take them to European
ports across the European Union and
here's where we have territories like
France Italy and Germany eventually all
these Goods will reach their respective
destinations in Europe so do you realize
people we are breaking the 150y old
bottleneck and more importantly the
Israeli and the Arabs have never had
such a wonderful relationship in the
history of the world and this route
ladies and gentlemen is so so crucial
that it gives us three incredible
superpowers firstly it reduces our
dependence on the Swiss Canal secondly
it could be 40% faster because
high-speed freight trains would travel
at 120 km per hour which is literally
four times faster than the ships so this
route is both 30% cheaper and 40% faster
as compared to the Swiss Canal route and
cherry on the cake this route will
strengthen our relationship with Europe
us and the Arab countries by a large
large extent so do you realize in spite
of being best friends with Russia Europe
and us both are signing such an
important deal with us in spite of the
Israel Palestine conflict we are best
wins both with the Israelis and the
Arabs so much so that we are building
the most revolutionary trade route in
the history of the world and that to
together this is the power of having a
strong diplomatic relationship even
during the times of conflict and this is
what I consider to be one of the most
important contributions of Dr ja Shanker
and guess what the story doesn't end
here do you see this map these are
nothing but data cables that connect the
entire world to the internet and every
single country and continent that has
internet today is directly or indirectly
connected to this vast network of cables
so when you send an Instagram real to
your friend in the us the data typically
travels through a series of cables it
starts from your device and each packet
of data including video text or image it
is rooted through the most efficient
path possible to reach its destination
and this packet travels through
thousands of miles under the ocean to
reach your friend's phone in the US and
this infrastructure is extremely crucial
because it supports not just personal
Communications but even digital
Communications like business
transactions streaming services and much
more and this cable infrastructure is so
so important that 95% I repeat 95% of
our communication data flows through
these cables so if someone cuts off
these cables that particular country or
continent will either lose access to the
internet or will see a significant drop
in its internet capability and just like
how the Red Sea route is a maritime
choke point this is an undersea data
choke point of the world and you know
what guys just like the houti rebels
attacked cargo ships in the Babel Monday
they even attacked the undersea cables
in March and damaged these cables and
this is what happened after that cable
Warfare is Raging posing a grave threat
to Global Communication three undersea
cables in the Red Sea have been cut as a
result global internet and
telecommunication traffic of Asia
including India Europe and the Middle
East has been rerooted the Red Sea is
the chief Target for ven's Ry Rebels and
you know they say that if you blind a
soldier for a minute you have control of
of his life and if you blind a nation
for 24 hours you can take control of
that nation and these data cables are a
gateway to choke Us in such a way that
Any Nation can take control of us if
they blind us for 24 hours so in short
we need to protect this data cable choke
point at any cost the question is how do
we do it well this is where there is a
battle between China and the US to
capture the undersea cable network to
tell you about it as of now American
companies have most of the control of
these undersea cables but in the past 10
years China has been laying its own
cables and it's been connecting Europe
Africa and Asia with its own data cables
in fact by 2025 they aim to have 60%
market share in the undersea data cable
market so if you see this chart there's
a company called hmn Tech which is a
Chinese cable company their undersea
cables are connecting Africa South
America Pakistan Sri Lanka and even
other European and Middle Eastern
countries but just like solar ingots and
lithium here if we become dependent on
China we are literally giving away our
Lifeline to our Rivals so India just
cannot afford to let this situation
happen this is the reason why again IMC
has planned something called trans EUR
Asia cable system this is a 20,000 km
cable network which will connect Mumbai
and martial in France and just like the
imsc trade route avoided the Swiss Canal
route this submarine cable will avoid
the maritime choke point and go via land
through UAE and Saudi Arabia this is a
second risk that IMC is helping India
avoid and lastly there's something
called the interconnected solar grid and
hydrogen Corridor solar grid is
something that I've already covered in
our previous case stud so we attach the
link to it in the description for
hydrogen we will again cover it in a
separate episode if you would love to
know about the hydrogen Corridor but as
of now I think it's already information
overload so let's SK it for this time
but long story short both the
interconnected solar grid and the
hydrogen Corridor will help us adopt
renewable energy faster than ever this
is how the Diplomatic Master stroke of
India is giving us the superpower of
bypassing the Swiss Canal is helping us
bring down the cost of shipping by 30%
it is helping us bring down the time of
shipping by 40% it is helping us protect
our data cables and most importantly
this route will put us in the perfect
sweet spot to trade with the West while
holding a healthy relationship with
Russia this is the power of diplomacy in
international relations and event
actually it brings us to the last part
of the episode and that are the lessons
that we need to learn from this iconic
position of India in World economy
lesson number one unless a conflict
happens in your backyard it is not your
business to be worried about others
problems in this case while Russia
Ukraine have been fighting while us and
Russia have been fighting we minded our
own business and did what is best for us
and did not align with anyone lesson
number two there is a wise saying which
says that in geopolitics there are no
friends only interests which means
international relations are priv
primarily driven by strategic economic
and security considerations rather than
emotional Affinity in this case no
matter how much we feel for the people
of Ukraine we cannot align ourselves
with anyone because if we do we will put
our economy at risk and our people at
risk and as much as this sounds brutal
even as entrepreneurs we need to
understand that a business relationship
with no economic or Strategic Benefit is
not a business relationship at all so
have healthy relationships but not at
the cost of your business and this
especially applies for those clients who
say do this project for us for free and
we will get you more clients with our
referrals and lastly always remember
diplomacy is the art of telling people
to go to hell in such a way that they
start asking you for directions I repeat
diplomacy is the art of telling people
to go to hell in such a way that they
start asking you for directions and Dr J
Shanker is clearly great at it so the
question is as entrepreneurs are we
mastering the art of diplomacy reflect
on this question and let me know in the
comments that's all from my side for
today guys if you learn something
valuable please make sure to hit the
like button in order to make you baba
happy and for more such insightful
business and political case studies
please subscribe to our Channel thank
you so much for watching I will see you
in the next one bye-bye
[Music]
[Music]
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