Violence in West Asia will not affect the India-Middle East-Europe-Economic Corridor, says Sitharaman

The conflict in Israel and Palestine will not dampen plans for the India-Middle East-Europe Economic Corridor (IMEC), Finance Minister Nirmala Sitharaman signalled on Friday, noting that the strife didn’t figure significantly in parleys held with G20 Finance ministers in Marrakech, Morocco.

However, the West Asian crisis has brought concerns about fuel, food security and supply chains to the forefront again, Ms. Sitharaman said in a briefing after the last meeting under India’s presidency of the G20 Finance Ministers and Central Bank Governors (FMCBG) held in Marrakech on October 12 and 13.

While “higher for longer” interest rates can impact investment flows in emerging markets, Ms. Sitharaman said these economies are the growth engines of the world and so investment flows should not be influenced by high interest rates alone.

“The recent crisis in the Middle East, and the concerns about fuel back again, are worries which many countries do hold and express. So the concerns and uncertainties are about the peace as a positive factor, fuel concerns affecting the food security aspects and therefore, inflation to that extent, and the fragmentation of supply chains,” she said.

Crypto Asset Reporting Framework to be implemented by 2027

On crypto assets, the FMCBG members adopted a roadmap proposed by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) and called for its swift and coordinated implementation, including implementation of the policy frameworks, outreach beyond G20 jurisdictions, global coordination, cooperation, information sharing and addressing data gaps. 

Data exchanges between countries under the Crypto Asset Reporting Framework (CARF) will begin by 2027.

“The regulatory space also has a lot of action, but I’m not elaborating on that,” the minister said, adding that progress has also been made on international tax transparency on real estate, as well as the use of tax treaty information exchanges for non-tax purposes”.

“The G20 has asked the Global Forum to identify an appropriate and coordinated timeline to commence exchanges by relevant jurisdictions under the CARF, considering the aspirations of a significant number of jurisdictions, it has been decided that the CARF exchanges to start by 2027 by these jurisdictions,” she said.

Asked if she was less optimistic about the prospects for IMEC, which is seen as a counter to China’s ambitious Belt and Road Initiative, in light of the West Asia situation and remarks from Qatar and Saudi Arabia, Ms. Sitharaman said, “whilst short term glitches can have concerns and it can occupy the mind, we will keep engaging with all the stakeholders and keep our communications open. This is not just for the immediate future, but with the long term interest that we’ve started (IMEC).”