The visit of Indian Prime Minister Narendra Modi in Cairo last week saw Egypt and India sign an agreement elevating economic and diplomatic ties to the strategic partnership level first announced during President Abdel-Fattah Al-Sisi’s trip to New Delhi in January. The two countries vowed to intensify cooperation and hold periodic talks, according to official statements from both sides.
The visit also witnessed discussions on strengthening trade, food security, and defence ties.
Modi said he wants to increase bilateral trade to $12 billion from the current $6-7 billion. India exported $4.11 billion of goods to Egypt in the last fiscal year. Egyptian exports to India reached $1.95 billion.
India is among the top five importers of Egyptian products, including oil and liquefied natural gas, salt and cotton. Indian exports to Egypt include cotton yarn, coffee, herbs, tobacco, lentils, vehicle parts, ships and electrical machinery.
“Egypt is a gateway and investments in its special economic zones will help India reach out tomarkets in the Middle East, Africa and Europe and even further afield, to South America and parts of North America,” Manjari Singh, assistant professor at the Indian Amity Institute of International Studies, told Al-Ahram Weekly.
Ahead of the visit, Egypt had offered a dedicated area for Indian industries in the Suez Canal Economic Zone (ScZone). ScZone head Walid Gamaleddin led a delegation to India last month and met representatives of Indian automotive and adhesive companies who had expressed interest in investing in the zone. They included Indian auto maker Bajaj.
Egypt is prepared to offer an exclusive industrial and logistics hub to serve as a strategic gateway for New Delhi to expand its market reach, Gamaleddin told the local press.
Prior to the Indian prime minister’s visit to Cairo, ScZone announced a $20 million Indian Platinum project to start in August 2024. India’s Renew Power is also investing $8 billion to establish a green hydrogen plant in ScZone.
The partnership and preferential trade agreements that have existed between the two countries since 1978 could lead to a Free Trade Agreement (FTA) between both countries, says Singh. She also points out that should the countries sign a comprehensive economic partnership agreement (CEPA) similar to the one India signed with the UAE, it will ensure free, open and non-discriminatory trade and help both Egypt and India explore wider markets.
Cairo is also hoping India can help Egypt access imports amid its foreign currency crunch. In 2022, when the war in Ukraine pushed up grain prices, India banned wheat exports to protect its reserves but granted an exception to Egypt.
Reuters reported last month that India is weighing a proposal to allow Egypt to make purchases in rupees and barter goods such as fertilisers and gas.
The two leaders also discussed ways to boost tourism between their countries and increase the number of direct flights between Cairo and New Delhi.
Defence cooperation is high on the agenda of both states and has multiple dimensions.
Singh explains that under the Make in India and Atmanirbhar Bharat (Self-Reliant India) initiatives, India is expanding its defence industry and exports. It has already started to export defence products to 53 countries, Egypt included.
Egypt has already agreed with India’s Hindustan Aeronautics Limited (HAL) to buy the Tejas LCA Mk-1A fighter aircraft. As part of the proposal, HAL will deliver the aircraft to Cairo and provide the technology transfer to allow the aircraft to be locally produced.
“Co-production and co-manufacturing is an important dimension of defence cooperation,” says Singh.
“Egypt has a very important role to play in terms of supplying micro and medium defence components to India, especially in the aero-engine industry. India imports its aero-engine industrial component primarily from US, France and UK, but is making concerted efforts to diversify and engage with other economies, especially in terms of importing components and parts.”
In September 2022, Defence Minister General Mohamed Zaki signed a security cooperation agreement bolstering military and security relations with his Indian counterpart Rajnath Singh in Cairo.
Commitment to ensuring the security and stability of international navigation is a core aspect of the burgeoning partnership between Egypt and India. Both nations recognise the vital role they play in safeguarding the Red Sea, the Suez Canal and the Arabian Sea, Mohamed Higazi, a former assistant minister for foreign affairs, wrote in Ahram Online.
Seeking to establish a framework for unhindered navigation across the Indian and Pacific Oceans, crossing freely to Europe via the Suez Canal, India places particular emphasis on its strategic bonds with Egypt, noted Higazi.
On a political level, the two countries share similar views on the rapid changes in the balance of regional and global power. Cairo and New Delhi both have reservations about condemning the Russian war in Ukraine. According to Mohamed Suleiman, a non-resident scholar in the Egypt programme at the Washington-based Middle East Institute, Egypt and India — engineers of the Non-Allied Movement (NAM) during the cold war — should strive to revisit NAM principles and send a clear message to policymakers in Western capitals, Beijing and Moscow that they want to choose partners based on their national interests. “In other words, they don’t want to be coerced into picking sides in the ideological struggle pitting the West against Russia and China,” Suleiman wrote in a report published by MEI.
Suleiman also wrote that as a rising power, India has a strategic interest in expanding its reach, especially to Africa given the continent’s growing population and middle class and its central role in global commodities markets. Egypt is positioning itself as a political, economic and security gateway to Africa and is also a rising strategic player with a growing security and intelligence footprint across the continent.
Suleiman argued that shared interests in Africa and the two countries’ common perspective on the global order create an opening for Cairo and New Delhi to work together. “The areas of potential cooperation run the gamut from pharma to infrastructure, education to health services, intelligence cooperation to military exercises,” he says
According to Singh, today’s global order is being driven by competition over geoeconomic supremacy. Countries in the Global South are emerging as important players in the world ecosystem as a result of their economic growth, increasing investment capabilities, robust industrial base and vibrant labour market.
“All these aspects equip the countries in the Global South to play a defining role, especially in addressing future concerns. The countries in the Global South have all adopted either a vision 2025 or vision 2030 vis-à-vis sustainable development goals and are diversifying their economies through FDIs in technologically driven industries and supply chains such as the food processing industry, energy industry, construction and hospitality industry, EduTech, FinTech, HealthTech etc,” she says.
Multilateral organisations such as BRICS, the G20, SCO and others are also playinga major role in steering these industries through involvement with partnering nations.
“Egypt is looking east for more integration in multilateral forums such as BRICS while India is looking towards the Middle East and North Africa as potential partners to tap markets in Europe, Central Asia, Africa, and the Middle East,” notes Singh.
India, current president of the G20, has invited President Al-Sisi to attend the G20 meeting in September.
* A version of this article appears in print in the 6 July, 2023 edition of Al-Ahram Weekly
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