What are the economic relations and exchanges between Egypt and India?

The bilateral trade balance, at USD -1.5 billion in 2023/24, is structurally in deficit for Egypt, lower than that of 2023 (USD -1.8 billion), but significantly higher than that of 2021 (USD -420 million). Bilateral trade has halved since 2022 due to their heavy dependence on Egyptian hydrocarbon exports (53.4% ​​of total Egyptian exports to India on average between 2019/20 and 2023/24), which have been declining since 2022 and halted since 2024, after years of steady growth between 2017 and 2022.

Egypt’s accession to BRICS+ in January 2024 should contribute to strengthening bilateral Indo-Egyptian political relations without substantially altering bilateral trade dynamics. Bilateral economic relations are long-standing, framed by the 1978 agreement, and the high-level official visits organized in 2023 have elevated relations to the level of a strategic partnership. Since 2016, several bilateral working groups have also enabled India and Egypt to maintain regular dialogue in various areas.

The two countries’ membership in the BRICS+ circle could also allow Egypt to strengthen its political ties with India without significantly reconfiguring the profile of bilateral trade. That said, India represents the most credible alternative to China in Egypt’s supplier diversification strategy.

The historical proximity between the two countries cannot obscure the growing competition between India and Egypt, with the latter increasingly positioning itself in traditionally Indian segments such as the textile industry, multilingual call centers, innovation centers, financial services, and engineering. Thus, Egypt’s digital offshoring strategy reflects a desire to position itself as a regional outsourcing hub for the Arab world and North Africa through differentiated incentives.

While India is more recognized for its expertise in information and communications technology, for example (particularly in R&D), Egypt has comparable assets in skilled labor, while offering more competitive costs and geographic proximity to Europe. To a lesser extent, Egypt’s textile and manufacturing industries are growing, without, however, competing with India on a global scale.

Indian investment in Egypt is significant, driven by heavy industry and oriented toward the Suez Canal Economic Zone. India is among the largest foreign investors in Egypt, with an estimated FDI stock of between USD 3.5 and 4 billion. Around 500 Indian companies are located there, including around fifty active in the chemicals, petrochemicals, construction materials, automotive, and pharmaceutical industries.

The major investment remains that of TCI Sanmar in Port Said (over USD 2 billion invested in a petrochemical complex, to which will be added USD 300 million for an ethylene receiving station and the expansion of production capacity). However, Indian companies remain in the background in major donor-funded projects in Egypt. Their presence is often in subcontracting or technical supply capacity, in the absence of significant new contracts in key sectors (transport, water, and renewable energy).

Source: French Embassy in Cairo