Egypt SEZs looking at Indian investment
An official delegation from Egypt, comprising of Government and privately owned SEZs in Egypt, is coming to India to seek investments from light and medium industries such as, but not limited to, automotive (auto parts, tyres and rubbers, automobile manufacturers), machinery (construction machinery & heavy trucks, agriculture & farm machinery, and industrial machinery), chemicals (industrial chemicals and household chemicals), packaging (paper packaging, metal and glass containers), food products (agriculture products, packaged foods and meats), building material (construction material) and electrical equipment (electronics & home appliances, and household products).
Trade Promotion Council of India (TPCI) in association with the Embassy of Egypt in New Delhi, is organizing a roundtable seminar on 18th March with the visiting Egyptian delegation, composed of senior officials from the Government owned Suez Canal Economic Zone (SC Zone) and two private SEZs including East Port Said Development Zone and Industrial Development Group. This meeting is being organized on the side-lines of 14th CII Exim Bank Conclave on India-Africa Project Partnership being held from 17-19 March, 2019.
The SC Zone is the Governmental authority responsible for the development projects along the Suez Canal corridor. Spanning an area of 460 million square meters, the development project is considered a promising investment zone consisting of 4 industrial areas, 6 sea ports, two from are integrated areas on the entrances of Suez Canal (East Port Said in North and Al-Sokhna in South). The SC Zone delegation, headed by Mohamed Abdelaziz Brai (Vice Chairman) is looking forward to attract industrial investors, logistical investors and operators, sea port operators and infrastructure related entities.
The East Port Said Industrial Zone (EP) is a private venture being built to become one of the most competitive townships in the world for global manufacturers. Built on an area of 16 million square meters and strategically situated at the crossroad of Africa, Europe and Asia, the SEZ offers various fiscal incentives, tax and customs exemptions to investors from a large gamut of trades. The delegation is being headed by Mr. Sameh Attia, the Managing Director.
The Industrial Development Group too is a private owned company responsible for developing Engineering Square Industrial Park, Al Alameen Industrial Zone, and couple of other specialized industrial parks. The parks, open to all industrial sectors, offer investors the opportunity to rent, lease, buy industrial space or purchase land plots and build their own assembly and/or manufacturing lines abiding by the same architectural standards of the park.
Informs Mohit Singla, Chairman TPCI: “Over 450 Indian companies are operating in Egypt of which around 50 are in manufacturing and construction with a combined investment exceeding US$ 3 billion. Approximately half are joint ventures or wholly owned Indian subsidiaries while the rest operate through their representative offices and execute projects for Government organizations. Major Indian investments in Egypt include TCI Sanmar (with a value of US$ 1.5 billion), Alexandria Carbon Black, Kirloskar, Dabur India, Egypt-India Polyester Company (EIPET), SCIB Paints, Godrej, Mahindra and Monginis. Indian companies also execute projects in railway signalling, pollution control, water treatment, irrigation, anti-collision devices etc. Indian Pharmaceutical major Hetero Drugs Ltd launched a JV in May 2015 to produce a Hepatitis-C drug and Sun Pharma has recently commenced operations. Indian companies are present in almost every sector including apparel, agriculture, chemicals, energy, automobiles, retail and others. Overall, these companies provide direct and indirect employment to approximately 35,000 Egyptians. The Egyptian delegation to India, through TPCI, is looking to attract more investments in Egypt, which has traditionally been one of India’s most important trading partners in the African continent.”
Informs Dr. Khaled Melad Rezek, Commercial Counsellor of the Embassy of the Arab Republic of Egypt: “India is Egypt’s 10th largest export destination and also the 10th largest import source for Egypt. The bilateral trade between India and Egypt has increased more than five times in last ten years, courtesy India-Egypt Bilateral Trade Agreement, which has been in operation since March 1978. It has shown positive growth in 2017-18 to reach the level of US$ 3.68 billion. Egypt is seeking further investments from India so as to take India-Egypt relations to new heights.”
The imports from Egypt were worth of US$ 1.29 billion during FY 2017-18. India’s exports to Egypt during FY 2017-18 recorded US$ 2.39 billion. The top five Indian exports during this period were meat, light vessels & floating cranes, petroleum oil, cotton yarn and motor cars while the top five Indian imports were petroleum oil, petroleum gases and other gaseous hydrocarbon, natural calcium phosphates, raw cotton and coke & semi-coke. Being the world’s second largest producer of synthetic fibre and yarn, cotton, cellulosic fibre and silk, India exported around US$ 342 million worth of textile and clothing products to Egypt in 2017-18. The cotton yarn was the dominant product in the export basket, valued at US$ 163 million followed by man-made yarn fabrics valued at US$ 121 million and cotton fabrics at US$ 25 million.
Egypt is a significant and important market in North Africa for Indian exports of yarn and fabrics. Great possibilities exist between the two countries to enhance bilateral cooperation in key areas like automotive industry, textiles, processed Agri products and leather products.
Outlook of Egyptian Economy
Looking ahead, the economic outlook appears bright. Although inflation has picked up recently on the back of energy subsidy cuts and higher food prices, it is expected to moderate going forward, easing the financial strain on consumers. In addition, higher salaries and pensions in the public sector are likely continue to support private consumption. Meanwhile, investment should reap further benefits from recent reforms to improve the business environment and higher government investment spending this fiscal year.
Expert expects GDP to expand 5.2% in FY 2019, which is unchanged from last month’s forecast, and 5.2% again in FY 2020.
Import tariff rates faced applied by Egypt for Indian products on meat products, automobiles, articles of iron and steel, stone, cement, mica and construction items are significantly higher. If these import tariffs are worked out, then India’s export can further escalate.
India’s exports of agricultural products have experienced higher growth rate from 2014-18 signalling robust demand in Egyptian domestic economy.
Potential of exporting pharmaceuticals are also immense. India’s exports growth of pharma was at 10%, way higher than world average.