Sunday 24 / November / 2024
New Delhi: India’s rail corridors will not only reduce the domestic costs of logistics but also strengthen the low and middle income countries connect with the global value chains, expand production possibility frontiers and create immense employment opportunities.
The announcement of the three major economic rail corridors under the PM Gati Shakti initiative, focusing on energy, mineral, and cement will enhance multi-modal connectivity, and significantly improve logistics efficiency. These product specific corridors will accelerate GDP growth by creating more efficient, cost-effective, and well-connected transportation network. These corridors will increase industrial productivity, competitiveness, and boost economic activity.
These rail corridors will capitalize economic benefits of India-Middle East-Europe Economic Corridor (IMEC), inked at the G20 Summit, linking countries across the Middle East, South Asia, and Europe. These rail corridors will strengthen supply chains of low and middle-income countries across the South Asia, Middle East and Europe regions and create economic benefits for millions of enterprises.
An industrial corridor serves as a pivotal pathway, traversing through various states as a vital lifeline for economic growth. These corridors are designed to seamlessly integrate industry and infrastructure, fostering comprehensive economic and social development.
Marked by world-class facilities, industrial corridors boast a robust array of features, including a high-speed transportation network encompassing both rail and road, cutting-edge ports equipped with state-of-the-art cargo handling technology, modern airports facilitating efficient connectivity, strategically planned special economic regions and industrial areas, logistic parks and transshipment hubs ensuring smooth logistics, knowledge parks tailored to meet industrial requirements.
This holistic approach is underpinned by a well-crafted policy framework, creating a conducive environment for sustainable economic growth.
Efficient freight movement is the lifeblood of industry. Rail corridors act as arteries, delivering raw materials and finished goods swiftly and cost-effectively. This attracts new industries to locate along the corridor, drawn by the improved connectivity and logistics advantage. Farmers will have cheaper and faster access to markets, leading to increased production and income levels. Food processing plants also spring up along the rail corridors, creating immense jobs.
This domino effect can extend to tourism, logistics, and various other sectors, boosting local economies far beyond the corridor itself. Remote regions often face isolation and limited market access; rail corridors bridge these gaps, connecting producers to consumers across the distances. This integration fuels economic growth by expanding markets, fostering competition and enhancing entrepreneurship.
In a resolute commitment to unlocking vast economic opportunities through strategic rail corridor development, the government has embarked on an ambitious investment journey epitomized by the PM Gati Shakti National Master Plan.
This visionary plan seeks to establish an intricate network of multimodal transport corridors spanning the length and breadth of the nation. By strategically addressing the transportation needs of essential commodities and streamlining connectivity to ports, these corridors are poised to positively impact global supply chains and creating new supply chains and trade routes.
The emphasis on high-traffic density corridors aims to enhance efficiency and logistics in densely populated areas, potentially influencing international trade operations. As India prioritizes the development of these corridors, the global economy stands to benefit from improved logistics efficiency, increased trade opportunities, and potential investment inflows.
Among these rail corridors are the East Coast Corridor (Kolkata-Chennai), covering a substantial 2,640 km, strategically connecting pivotal industrial centers and ports to enhance trade and manufacturing potential, the West Coast Corridor (Mumbai-Bengaluru), spanning 1,500 km, aims to bridge India's west coast with the south, and the Delhi-Mumbai Industrial Corridor (DMIC), an extensive 3,343 km corridor linking India's two largest cities, envisioning the creation of a mega industrial hub.
Corridors Impact on Employment and Investment
Delhi-Mumbai Industrial Corridor (DMIC) It will attract USD 350 billion investments and will generate 100 million jobs, West Coast Corridor (Mumbai-Bengaluru) It will attract USD 25 billion investments and will generate 8 million jobs by 2030.
East Coast Corridor (Kolkata-Chennai) will attract USD 54 billion investments by 2030.
The positive impact of India's East Coast Corridor (Kolkata-Chennai), West Coast Corridor (Mumbai-Bengaluru), and Delhi-Mumbai Industrial Corridor (DMIC) extend far beyond national borders, promising to connect with other Asian corridors and forming a regional network that links industries to Global Value Chains.
These industrial corridors, by optimizing ports, efficient transportation networks, and logistics and distribution facilities, are poised to significantly reduce logistics costs, thereby enhancing the efficiency of the industrial production structure.
This increased efficiency, in turn, lowers production costs, rendering India-made products more competitive in international markets. The surplus generated from export-oriented production not only stimulates employment opportunities but also contributes to the rise in per capita incomes.
The strategic development of these corridors, particularly the West Coast Corridor, emerges as a pivotal trade route, attracting both domestic and international investors. Beyond fostering economic integration, the successful implementation of these corridors contributes to regional and global economic growth dynamics, positioning India as an appealing destination for trade and investment on the World stage.
The India-Middle East-Europe Economic Corridor (IMEC) Project, inked at the G20 Summit, stands as a transformative initiative with profound geopolitical and economic implications for India.
This ambitious project, designed to enhance transportation efficiency, lower costs, promote economic unity, generate employment, and reduce Greenhouse Gas (GHG) emissions, aims to redefine the integration of Asia, Europe, and the Middle East by facilitating seamless trade and connectivity. Comprising rail, road, and sea routes, IMEC creates a comprehensive transportation network connecting India to the Middle East and Europe, offering India a unique opportunity to boost economic growth through enhanced trade connectivity with key regions.
The IMEC corridor is anticipated to significantly cut transit times, enabling trade with Europe to be 40% faster compared to the Suez Canal maritime route. This efficient transport network is poised to encourage industrial growth in connected regions by facilitating the easier movement of raw materials and finished products.
As economic activities expand, improved connectivity is expected to generate job opportunities across sectors, further promoting employment through growth in trade, infrastructure, and allied industries.
The India-Middle East-Europe Economic Corridor emerges as a catalyst for economic expansion, encouraging collaboration and integration among the Asian, European, and Arabian Gulf regions. Through improved trade and transportation connections, the corridor seeks to reinforce geopolitical relations, fostering economic development across interconnected regions.
India's commitment to rail corridors extends beyond the PM Gati Shakti plan. The Union Budget 2024 allocated US$16 billion for railways, with a focus on electrification, station redevelopment, and high-speed rail projects.
This unwavering support reflects the government's belief in the transformative power of rail infrastructure. The unveiling of three pivotal economic railway corridor programs—Energy, Mineral, and Cement corridors; Port Connectivity corridors; and High Traffic Density corridors—signals India's commitment to fostering a more interconnected and dynamic global economic landscape.
These initiatives have far-reaching implications, addressing specific needs such as the efficient transportation of critical resources, enhancing connectivity to major ports for streamlined logistics, and tackling congestion while improving operational efficiency. In conjunction with dedicated freight corridors, these corridors are positioned to not only to propel GDP growth but also result in a substantial reduction in logistic costs, further boosting overall economic efficiency.
India's strategic focus on these economic railcorridors underscores its dedication to creating a robust and competitive economic environment at the global level. India has started a great journey of its ‘Kartavya Kaal’ towards the Viksit Bharat by 2047, with the strong buildup of rail, road, port, and airport infrastructure.
Dr S P Sharma has around 25 years of diverse experience in the various areas of the economy, trade and industry. Currently, he is working with the prestigious industry body, PHD Chamber of Commerce & Industry as Chief Economist and Deputy Secretary General.
