Report by Aryaa Sinha
Italy has decided to exit the Belt and Road Initiative (BRI). BRI was proposed by China in 2013 with the aim of connecting China to all European states. This would help China strengthen its road access throughout Europe. This project is expected to be completed by 2030.
What Exactly Is BRI?
China’s Belt and Road Initiative (BRI) is a global development strategy that involves creating infrastructure and enhancing connections between countries. The “Belt” refers to land routes from China to Europe through Central Asia, known as the Silk Road Economic Belt. The “Road” is the 21st Century Maritime Silk Road, a sea route connecting China to Southeast Asia, Africa, and Europe.
The Belt and Road Initiative involves building roads, train lines, ports, and pipelines to facilitate the movement of goods between countries. The aim is to encourage collaboration, trade, and the sharing of cultures, creating connections to foster friendship and mutual growth.
Why Did Italy Withdraw From BRI?
Italy joined the BRI in 2019, becoming the first of the G7 countries to join this initiative. However, over the last four months, Italy had been planning to withdraw from the BRI. The reasons cited were that they joined with the expectation of strengthening economic ties with China and tapping into trade and investment opportunities. However, they complained that the expected profits did not match the ground reality.
After Italy became a member of the BRI, there was an increase in its exports to China, rising from 14.5 billion euros to 18.5 billion euros. However, there was a more significant surge in Chinese exports to Italy, jumping from 33.5 billion euros to 50.9 billion euros.
Italy has been grappling with an increasing trade deficit (a condition where import and service has greater value than export) with China. Through the BRI, Italy aimed to attract investments and broaden its export reach into China’s vast market. However, over a three-year period leading up to 2022, its trade deficit with China doubled.
Is It Beneficial for India?
The BRI pass, intended to connect Europe, passes through Pakistan-occupied Kashmir. India has consistently opposed this and did not participate in the BRI project. Italy’s withdrawal is expected to strengthen India’s relations with Italy.
Moreover, India’s strong ties with Italy are evident in the numbers. In the fiscal year 2021-22, bilateral trade (the exchange of goods and services between two countries) surged to $13.2 billion, showing a remarkable growth rate of over 50% from the previous period.
After the withdrawal of Italy, many countries who are a part of BRI started questioning their profit.
Image Credit: World Bank, Feature image generated by Aryaa Sinha using Bing AI.