• Egypt and India share strong historical ties, and struggled their way to full sovereignty from British rule in the mid-1900s. • Trade between the two countries has grown from around US$ 500 million to US$ 4.5 billion over 15 years. • According to TPCI’s analysis, significant potential exists for enhancing India’s exports to Egypt in products like medicines, motor vehicles, cellular phones and bovine meat. • With a strong policy impetus, both countries can extract considerable gains in bilateral trade and investment.
India and Egypt are home to two of the world’s oldest civilisations – one along the banks of the Indus while the other along the banks of the Nile. Both civilisations have shared a healthy and friendly relationship since ancient history, with the edicts of King Ashoka mentioning about Ptolemy as a recipient of the Buddhist proselytism of the great Indian emperor. Both nations struggled their way towards full sovereignty from British rule in the mid-1900s. A stronger foundation was laid with the signing of The Friendship Treaty between the two countries in 1955.
India’s total trade with Egypt has grown from around US$ 500 million to US$ 4.5 billion in 2018 over the past fifteen years, recording a noteworthy CAGR of nearly 15%. Importantly, trade with Egypt has remained in favor of India in recent past. Though the global slowdown in 2013 impacted both imports and exports, the trade has recovered coherent with India’s global trade.
Our exports hover around US$ 2.5 billion and imports are relatively much less at around US$ 1.5 billion. Primarily, products that India exports to Egypt include aviation turbine fuel (ATF), bovine meat, cars, graphite electrodes, diesel, cotton yarn, denim, plastics, auto parts, antibiotics, cumin, black tea, etc. Major imports from Egypt are crude petrol, LNG, urea, oranges, and minerals like natural calcium phosphate, calcium carbonates, ammonia etc.
Table 1: India’s Exports to Egypt (in US$ million)
(Source: Trade MAP, Top ten as per trade in 2018)
Table 2: India’s Imports from Egypt (in US$ million)
India’s exports to Egypt make less than 10% of total exports to African region and less than 1% of global exports. Considering the Government of India’s recent attention to the region, there is a humongous potential in bilateral trade that can be exploited between India and Egypt. TPCI has analysed some key product categories that can be explored for enhancement of bilateral trade.
Keeping in view India’s current trade with the African region, Indian exporters can explore the markets of Egypt for commodities like medicines, oils, cars, auto parts, iron & steel products, wood and paper products, coffee, etc. On the other hand, Egypt is a major supplier of carpets, aluminum, gold, minerals, LNG, Crude petrol, ceramic products, cement, vegetables like onions, fruits, glass products and essential oils among others. Especially for India, Egypt can be a balancing source of crude bearing in mind US sanctions on Iran. In addition, Egypt can be a source of stable supply to meet the increasing demand for liquefied natural gas.
Some of the identified products where India has opportunity to exploit and increase exports to Egypt significantly are given in Table 3. These products are identified on the basis of India’s minimum global exports and Egypt’s global imports less India’s exports to Egypt. The data has been further filtered for those products where India’s exports to the African region have also been significant, i.e. more than US$ 50 million in 2018. Apart from significant global exports by India and imports by Egypt in these products, significant exports to Egypt indicates that the geographical distance is less of a hurdle for exporting these products to the region.
Table 3: Potential products for exports to Egypt (in US$ million)
(Source: Trade MAP and Author’s Calculations)
Based on same methodology vis-à-vis India’s imports, products where India can see Egypt as an additional and/or alternative supplier have been identified in table 4. These calculations indicate that since Egypt is a mineral rich country, its resources can aid the growth of Indian industry as well as of Egyptian businesses via enhanced trade volumes.
Table 4: Potential products for imports from Egypt (in US$ million)
Apart from average MFN of 19% higher than India’s average MFN of 13%, Egypt does not seem to have implemented many trade barriers against Indian goods. Optimum benefits that trickle from exploitation of the opportunities in bilateral engagement especially in trade and investment, can be leveraged through government & industry initiatives.
A Joint Study Group (JSG) has already been set up to examine the feasibility of a FTA between India and COMESA (Common Market for East and Southern Africa) which is Africa’s largest economic community comprising of 19 member states namely Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Swaziland, Sudan, Uganda, Zambia and Zimbabwe.
Scope for action lies in improvement of logistics, exploring low cost sea and air transfer routes, industry interactions and joint ventures in oil and gas exploration. Moreover, Egypt is strategically located, making it a hub for trade routes between Europe, Africa and Asia. Through various bilateral trade agreements Egypt provides businesses with access to a consumer market opportunity of 2 billion across Europe, Asia, the Middle East and Africa. There is a strong case for Indian businesses to explore possible avenues of investment in Egypt. A moderately ambitious bilateral engagement between India and Egypt may give the desired impetus to bilateral trade and investment.
what is the scope for frozen food items and ready to eat items in egypt,if exported from india.please enlight me regarding this.also please mention what is the best export product from india to egypt.
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