These discussions took place at a time when China’s economic ties to Egypt have been growing over the years.
With Egypt battling a serious economic crisis, Egyptian President Abdel Fattah El-Sisi, who was the chief guest at the Republic Day parade Thursday, has reached out to India for investments and participation in mega infrastructure projects in his country, The Indian Express has learnt.
Sources said this was one of the consistent themes of discussion between the Egyptian side and the Indian leadership over the past two days, including with Prime Minister Narendra Modi.
Editorial |Delhi to Cairo
This push was also reflected in the joint statement issued by both sides, saying that both leaders welcomed the expansion of Indian investments in Egypt, which is currently more than $3.15 billion. They agreed to encourage businesses from their respective countries to explore emerging economic and investment opportunities in each other’s countries, it said.
Egypt welcomes the flow of more Indian investments and promises to offer incentives and facilities as per applicable regulations and frameworks. On its part, India underlines its support for this approach by encouraging its companies, which have the potential to establish overseas investments, to make use of the available investment opportunities in Egypt,” it said.
Meanwhile, during his meetings in Delhi with Indian leaders, including External Affairs Minister S Jaishankar and President Droupadi Murmu, and the business community, Sisi stressed on Egypt’s keenness to develop economic and trade cooperation with Indian companies, as well as joint investments, sources said.
According to sources, the Egyptian President said there are various investment opportunities offered by mega projects being implemented in Egypt.
Although Egypt has not asked for budgetary support, the big projects that were highlighted include Metro projects in Cairo and Alexandria, the Suez Canal economic zone, the second channel of Suez Canal, and a new administrative capital in Cairo’s suburbs.
The development of the Suez Canal area, which includes a number of major industrial and logistics zones, was one of the key areas underlined, they said. The joint statement said: “In this context, the Egyptian side considers the possibility of allocating a special area of land for the Indian industries in the Suez Canal Economic Zone (SCEZ), and the Indian side can arrange for the master plan.”
According to sources, Sisi told the business community during a meeting in Delhi that Indian companies can take advantage of Egypt’s strategic location as a centre for production and re-export to various countries that are linked by his country’s free trade agreements, particularly in the Arab region and Africa. This meeting was also attended by senior officials from the ministries of External Affairs, Commerce and Finance.
Currently, more than 50 Indian companies have investments worth more than $3.15 billion in Egypt. In contrast, Egyptian investments in India are only about $37 million. India’s trade with Egypt has grown from $4.5 billion in 2018-19 to $7.26 billion in 2021-22.
According to the joint statement, the two leaders expressed satisfaction at the level of bilateral trade despite challenges posed by the pandemic. “They expressed confidence that a bilateral trade target of US$ 12 billion could be achieved within the next five years by both countries, by diversifying the trade basket and focusing on value addition,” it said.
Sisi has also been wooing Chinese investments and has visited China seven times in the past eight years, including for the Beijing 2022 Winter Olympics. Bilateral trade between China and Egypt currently stands at $15 billion.
Egypt, however, is battling a spike in inflation, which has hit a five-year high of 21 per cent, leading to high prices for commodities and daily-use items, including eggs, milk and basic food.
Besides, the national currency has lost nearly half its value in less than a year, reaching a historic low near the 30 Egyptian-pound mark to the dollar. The country has also approached the IMF for the fourth time in six years for a bailout, having received $3 billion over four years.
On top of all that, the pandemic hit their tourism-dependent economy, followed by the Russia-Ukraine war, impacting Egypt’s forex reserves and food grain supply — almost 80 per cent of Egypt’s food grains came from Ukraine and Russia.
At one point, Egypt’s forex reserves had dipped to $20 billion, and is now at $34 billion. They have looked to Saudi Arabia and UAE for budgetary support, and have received about $8 billion so far. In May last year, India, which had placed a ban on the export of wheat, had allowed 61,500 metric tonnes to reach Egypt.
In Delhi, sources said, Sisi told his interlocutors that Egypt is ready to achieve “industrial integration with Indian companies” and promote their growth through partnerships.
Sources said Indian and the Egyptian businesses will explore the possibility of maximising cooperation in pharmaceutical, communications, information technology and defence. The other areas on the radar are infrastructure, petroleum and natural gas, new and renewable electricity, energy, and agricultural products.
For India, robust ties with Egypt, which has a significant geo-strategic location, is crucial. The Suez Canal controls 12 percent of global trade, and Egypt is a key political player in west Asia and north Africa. It is also the most populous country in west Asia, making it a major market and a gateway to Europe and Africa. Egypt also has bilateral trade pacts with leading Arab countries and African nations.