Daily News - Thursday, 5 June 2025

⁠Middle East crisis could pose an obstacle to India-Middle East-Europe corridor: MEA official (The Hindu)

⁠The India-Middle East-Europe Economic Corridor (IMEC), announced during the 2023 G20 Summit in India, faces new uncertainties due to the ongoing Middle East crisis, with senior MEA official Dammu Ravi warning that geopolitical instability, competition from China’s Belt and Road Initiative (BRI), and lack of harmonisation across regulatory and logistical systems could hinder progress. The proposed multimodal corridor aims to connect India to Europe via the UAE, Saudi Arabia, Jordan, Israel, and Greece, potentially reducing cargo transit time from Mumbai to Piraeus by about three days, though gains may be offset by customs and regulatory delays. Experts at the June 4 conference stressed the need for a dedicated IMEC Secretariat and private sector funding, while also cautioning about new overland security vulnerabilities that could emerge as the corridor seeks to bypass maritime chokepoints like the Suez Canal and Bab el-Mandeb.

⁠Air India to operate Delhi-Manila flights from October, connecting India and the Philippines with non-stop flights after 12 years (The Indian Express)

Air India will launch non-stop flights between Delhi and Manila from October 1 after a 12-year hiatus, operating five times a week with Airbus A321neo aircraft, as outbound tourism from India grows and the Philippines introduces 14-day visa-free entry for Indian tourists—joining countries like Thailand, Malaysia, and Indonesia. Indian tourist arrivals in the Philippines rose 12.4% year-on-year to nearly 79,000 in 2024, 53% higher than in 2022, while bilateral trade between India and the Philippines increased from $1.89 billion in 2015–16 to $3.53 billion in 2023–24. The new route also supports transfer traffic between Southeast Asia and Europe via Delhi, with Air India and IndiGo aiming to position India as a strategic hub connecting key markets such as the UAE, UK, Germany, and Singapore. 

⁠DGCA directs Turkish Airlines to ensure compliance with safety regulations after inspections reveal lapses (The Indian Express)

Amid strained India-Turkey ties following Operation Sindoor, the DGCA flagged multiple safety and compliance lapses by Turkish Airlines after inspections at four major Indian airports, including mishandling of dangerous goods and missing paperwork. The Indian government also revoked security clearance for ground handling firm Celebi, halted its operations, and prompted IndiGo and Air India to scale back aircraft and maintenance ties with Turkish firms. The DGCA has mandated Turkish Airlines to swiftly address all violations, ensure adherence to ICAO and DGCA norms, and will conduct further inspections to maintain oversight.

India services activity hits three-month high in May on strong export growth; employment rises by record (mint)

India’s services sector output hit a three-month high in May with the HSBC Services PMI inching up to 58.8, buoyed by robust export demand and record-high job creation, even as overall new business growth stayed steady. Services, which make up over half of GDP, helped lift FY25 growth to 6.5%, driven by a strong 7.4% expansion in Q4, though still trailing FY24’s 9.2% pace. Meanwhile, manufacturing lost some steam as the PMI slipped to 57.6 in May from 58.2 in April, signalling a mild slowdown in order and output growth. 

After IMF, ADB approves a loan of $800 million for Pakistan; India objects (Financial Express)

⁠India has strongly objected to the Asian Development Bank’s $800 million assistance package to Pakistan, comprising a $300 million policy-based loan and a $500 million guarantee, citing fears of misuse for military spending amid Islamabad’s falling tax-to-GDP ratio (down from 13% in FY2018 to 9.2% in FY2023) and rising defence expenditure. Following a recent four-day military conflict between the two countries and in light of Pakistan’s 24th IMF bailout, India has warned that such international funds often lead to spikes in arms purchases and urged strict safeguards to prevent diversion. Citing Pakistan’s weak fiscal governance, high debt-to-GDP ratio, FATF non-compliance, and military dominance in economic affairs, India has also warned the ADB of potential credit risks and policy reversals.