Potential for India-Mediterranean to expand collaboration

India and the Mediterranean region have a long and rich history of trade, going back hundreds of years when they exchanged everything from spices and textiles to oil and precious stones. But after India gained independence in 1947, the Mediterranean never quite became a priority or focus for Indian businesses.

With the global economy changing and relationships evolving quickly, the potential for India and the Mediterranean to work together has never been more exciting. There has been a noticeable change in India’s foreign policy toward building connections outside of its immediate neighborhood. The Mediterranean region’s strategic location, historical ties and historical significance make it a perfect fit for India’s plans to expand commerce and infrastructural ties beyond its hinterland.

India’s commitment to the India-Middle East-Europe Corridor (IMEC), announced in 2023, on the sidelines of the G-20 Summit in New Delhi, highlights how important the Mediterranean region is becoming. IMEC aims to boost economic ties and simplify trade between India, West Asia and Europe through key ports in West Asia and Mediterranean. In fact, the corridor’s success depends on significant infrastructure investments in the Mediterranean, particularly in port development, rail connectivity, and logistics hubs.

IMEC cannot simply be another infrastructure project – it must be seen as having the potential to reshape the very fabric of global connectivity and cooperation. IMEC is more than just a corridor. It’s a vision. A vision that aspires to bridge continents, cultures, and economies, connecting Asia, the Arabian Gulf, and Europe. It’s an ambitious plan that seeks not only to stimulate economic growth but to foster deeper ties across a region that has, for centuries, stood at the crossroads of global trade.

For India, this project holds immense significance. IMEC must be conceived and implemented, not just a pathway for economic engagement, but as a strategic imperative. As a nation that sits at the juncture of Asia and the Arabian Gulf, India has long recognised the importance of connectivity in driving economic growth and fostering stability. The success of IMEC would mean not just enhanced trade routes but the opening up of new avenues for economic collaboration with key regions across West Asia and Europe. For India, it’s about strengthening our connections with partners old and new, ensuring energy security, and asserting our role in the evolving global order.

At the recently held CII - India Mediterranean Business Conclave in New Delhi, it was observed that while there is immense potential for India and the Mediterranean for expanding their collaboration, the manufacturing sector holds the potential to be the foundation of this relationship. India is one of the most admired and fastest-growing economies in the world, and much of that success comes down to the efforts of its industries. It’s largely driven by the bold steps and innovations that businesses in India have taken that are playing a huge role in the country’s growth story.”

Speaking at that event, Piyush Goyal, minister of commerce and industry also emphasised the need for deeper business-to-business relationships, pointing out that “smoother logistics, faster connectivity, and secure trade depend on better cooperation in this space.” He went on to highlight initiatives like PLI scheme, the Centre’s efforts towards Ease of Doing Business (EoDB) through free trade agreements and economic partnerships that have boosted India’s manufacturing growth story and nation’s efforts to promote agri-value chains. Such schemes and agreements play a massive role in supporting initiatives between India and the Mediterranean countries.

Beyond traditional sectors, India is quickly becoming a global leader in innovation, particularly in green technologies. As the Mediterranean nations work towards adopting more sustainable practices, India’s experience in renewable energy presents a great opportunity. Looking forward, experts believe that several areas could benefit from deeper India-Mediterranean cooperation. Renewable energy is a key area, with the Mediterranean countries heavily investing in solar and wind projects. India’s ability to deliver affordable, large-scale renewable energy solutions makes it a valuable partner for these nations.

Other sectors like textile and pharmaceuticals are already making inroads in the Mediterranean markets. The partnership is particularly promising because of the complementarity between India’s youthful workforce and Mediterranean labour shortage.

While there is immense potential for the two regions to collaborate and increase their trade and investment, there are a number of potential challenges and opportunities that might come in the way of India and the Mediterranean countries in realising the full potential in this relationship. One big issue is aligning regulations--different rules and standards across regions could make cooperation tricky, so it is crucial to get everyone on the same page with industry regulations. Trade barriers, like tariffs and restrictions, also pose a threat to the free flow of goods and services. Policies that reduce these barriers and streamline customs processes will need to be prioritised. Infrastructure, too, plays a critical role; without adequate investments in logistics, transportation, and digital networks, building a seamless manufacturing ecosystem becomes difficult. Skills development is another piece of the puzzle.

While both India and the Mediterranean have skilled workforces, emerging technologies mean that constant upskilling will be necessary to stay competitive. On top of that, sustainability can’t be ignored--any partnership has to focus on reducing environmental impact and following global green goals. Finally, geopolitical stability is key. Tensions in the region can easily disrupt businesses, so keeping diplomatic relations strong and ensuring stable trade agreements will be essential for long-term success.

To strengthen the partnership between India and the Mediterranean, there are a number of practical steps both regions can take. First, creating a Bilateral Manufacturing Council would provide a dedicated space for governments and industries to work together, align goals, and tackle regulatory issues. This would ensure everyone is moving in the same direction. Encouraging joint research and innovation would also help, with co-investment in research and development leading to breakthroughs in manufacturing technology and products that are tailored to local markets. Trade missions and business exchanges could open doors for exploring new opportunities and partnerships, giving businesses a chance to connect and grow. Another key area is infrastructure--investing in projects that improve logistics and connectivity will make it easier for goods and materials to move across regions. Additionally, both regions should focus on skill development programmes that not only cover emerging technologies but also traditional manufacturing techniques, which would help keep the workforce competitive. Lastly, by working together on sustainable manufacturing initiatives, India and the Mediterranean can lead the way in the shift toward greener economies. These actions will not only strengthen economic ties but set the stage for long-term, sustainable collaborations.

The collaborative potential between India and the Mediterranean region in manufacturing is immense. By recognising each other's strengths, creating robust partnerships, and addressing the necessary policy challenges, we can pave the way for a prosperous future. Both must seize this opportunity to set a new standard for global cooperation.

This article is authored by Shishir Priyadarshi, president, Chintan Research Foundation, New Delhi.