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Squaring the circle at the India-Egypt summit
Context:
- The Prime Minister will pay a state visit to Egypt on June 24-25, at the invitation of President Abdel Fattah el-Sisi. This trip is significant because it is going to be the first trip of Mr. Narendra Modi to Egypt and the first official bilateral visit by an Indian Prime Minister to Egypt since 1997.
Relation so far:
- Trade Relation- India’s trade with the most populous Arab country stood at 6,061 million dollars in 202223, having declined by 17% over the previous year.
- Investment- Indian investments in Egypt were spread over 50 projects. Egypt has invested only $37 million in India.
- Indian Diaspora- There are less than 5,000 Indians in Egypt, nearly a ?fth of them being students.
Opportunities and Challenges:
- Market for India- Egypt’s largest imports are refined petroleum, wheat, cars, corn and pharmaceuticals — all of which India has the potential to supply.
- High Inflation- Annual in?ation is above 30% and the currency has lost more than half its value since February 2022.
- High Foreign debt- Egypt’s foreign debt is over 163 billion dollars (43% of the GDP) and its net foreign assets are minus $24.1 billion.
Way Forward:
- Balance the opportunities- Indian summiteers in Cairo may need to carefully balance their exposure to Egypt with the opportunities on hand.
- Innovative measures- India may countenance manageable ecopolitical risks to partake Egypt’s lucrative opportunities through various innovations such as the EXIM line of credit, rupee trading.
- Trilateral Funding- India may consider trilateral funding arrangements for projects in Egypt with its partners in the Gulf, the G20 or the multilateral ?nancial institutions.
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