Relations between India and Egypt go back several millennia and were recently strengthened by the Indian Prime Minister’s visit to Egypt.
History of India-Egypt Relations
Relations between India and Egypt go back several millennia, but it was in the 20th century that they took a significant turn. Contacts between Saad Zaghloul and Mahatma Gandhi, leaders of their respective independence movements, laid the foundation for the modern relationship. In 1955, the two nations became co-founders of the Non-Aligned Movement, under the aegis of Gamal Abdel Nasser for Egypt and Jawaharlal Nehru for India.
In recent years, there has been a remarkable rapprochement, particularly on the military and economic fronts, reflecting India’s growing importance as a power in Asia. The two countries have also increased their cooperation in addressing common challenges, such as the fight against terrorism.
Egypt and India: A Strategic Alliance
Egypt allies with India
The last time an Indian president visited Egypt was in 1997. The recent unexpected visit of Indian Prime Minister Narendra Modi to Egypt was therefore a significant event.
A summit was organized between the two leaders, whose agenda focused on improving economic and diplomatic relations. It’s undeniable that international events such as the COVID-19 pandemic, the Ukraine-Russia conflict, Hamas, and Israel are hurting the global economy, and India and Egypt are no exception.
Not only does Egypt need to reach out to potential partners as part of its economic recovery plan, but India also wants to expand its markets to the south. A partnership between the two economic superpowers is a positive-sum game. Not to mention the fact that India would represent the countries of the South at the G20 level.
Another context is that of the BRICS, where Egypt faces several competitive challenges in the dollar markets. Turning to the BRICS markets seems to be the most optimal alternative. The BRICS member countries are planning to create a single currency to facilitate trade, which is a great opportunity for Egypt.
India’s interest in Egypt
It is important to note that Egypt’s exports to India will total 1.7 billion USD in 2022, down from 3.5 billion USD in 2021. Two key sectors deserve special attention in the trade relationship between the two countries: defense and agriculture. India has moved from being an importer to an exporter of defense equipment.
In agriculture, following the conflict between Ukraine and Russia, Egypt turned to India for its wheat imports. The strategic and economic position of the Suez Canal comes into play. India can use this canal to access European markets as over 12 % of international trade passes through this passage.
Economic Cooperation between India and Egypt
12 billion USD is the amount of trade pledged between India and Egypt over the next 5 years, a decision that came out of the meeting between the two leaders.
The current volume of trade between the two countries is 7 billion USD, of which 4 billion USD is foreign direct investment. The Indian Prime Minister stressed the importance of Egypt in terms of investment, pointing out that Indian companies have invested more than 170 million USD in the North African country in just 6 months. About 450 Indian companies are present in Egypt, covering sectors such as apparel, agriculture, energy, and retail. Examples of potential Indian investors in the country include TCI Sanmar, Alexandria Carbon Black, Kirloskar, Dabur India, Flex P Films, SCIB Paints, Godrej, Mahindra, and Monginis.
