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India-Egypt trade: Time for a little nudge

• Egypt and India share strong historical ties, and struggled their way to full sovereignty from British rule in the mid-1900s.
• Trade between the two countries has grown from around US$ 500 million to US$ 4.5 billion over 15 years.
• According to TPCI’s analysis, significant potential exists for enhancing India’s exports to Egypt in products like medicines, motor vehicles, cellular phones and bovine meat.
• With a strong policy impetus, both countries can extract considerable gains in bilateral trade and investment.

India and Egypt are home to two of the world’s oldest civilisations – one along the banks of the Indus while the other along the banks of the Nile. Both civilisations have shared a healthy and friendly relationship since ancient history, with the edicts of King Ashoka mentioning about Ptolemy as a recipient of the Buddhist proselytism of the great Indian emperor. Both nations struggled their way towards full sovereignty from British rule in the mid-1900s. A stronger foundation was laid with the signing of The Friendship Treaty between the two countries in 1955.

India’s total trade with Egypt has grown from around US$ 500 million to US$ 4.5 billion in 2018 over the past fifteen years, recording a noteworthy CAGR of nearly 15%. Importantly, trade with Egypt has remained in favor of India in recent past. Though the global slowdown in 2013 impacted both imports and exports, the trade has recovered coherent with India’s global trade.

Our exports hover around US$ 2.5 billion and imports are relatively much less at around US$ 1.5 billion. Primarily, products that India exports to Egypt include aviation turbine fuel (ATF), bovine meat, cars, graphite electrodes, diesel, cotton yarn, denim, plastics, auto parts, antibiotics, cumin, black tea, etc. Major imports from Egypt are crude petrol, LNG, urea, oranges, and minerals like natural calcium phosphate, calcium carbonates, ammonia etc.

Table 1: India’s Exports to Egypt (in US$ million)

Chapter Description Value in 2017 Value in 2018
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral 197.772 528.157
87 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof 147.627 215.818
29 Organic chemicals 166.316 214.405
52 Cotton 182.567 212.846
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television 71.378 190.814
84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 160.684 170.635
39 Plastics and articles thereof 143.524 143.631
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, 70.668 140.368
02 Meat and edible meat offal 270.811 92.148
73 Articles of iron or steel 58.764 86.537
  Total 1470.111 1995.359
  %share of Total exports 62.6 71.5
  Total Exports 2349.534 2788.872

(Source: Trade MAP, Top ten as per trade in 2018)

Table 2: India’s Imports from Egypt (in US$ million)

Chapter Description Value in 2017 Value in 2018
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral … 868.616 1036.409
31 Fertilisers 0.294 110.315
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, … 21.16 110.091
25 Salt; sulphur; earths and stone; plastering materials, lime and cement 132.293 95.236
55 Man-made staple fibres 0.161 80.706
52 Cotton 47.653 75.997
08 Edible fruit and nuts; peel of citrus fruit or melons 18.465 39.551
39 Plastics and articles thereof 4.442 28.859
70 Glass and glassware 35.905 18.776
41 Raw hides and skins (other than furskins) and leather 10.974 14.069
  Total 1139.963 1610.009
  %share of Total Imports 93.7 95.3
  Total Imports 1216.074 1689.633

(Source: Trade MAP, Top ten as per trade in 2018)

India’s exports to Egypt make less than 10% of total exports to African region and less than 1% of global exports. Considering the Government of India’s recent attention to the region, there is a humongous potential in bilateral trade that can be exploited between India and Egypt. TPCI has analysed some key product categories that can be explored for enhancement of bilateral trade.

Keeping in view India’s current trade with the African region, Indian exporters can explore the markets of Egypt for commodities like medicines, oils, cars, auto parts, iron & steel products, wood and paper products, coffee, etc. On the other hand, Egypt is a major supplier of carpets, aluminum, gold, minerals, LNG, Crude petrol, ceramic products, cement, vegetables like onions, fruits, glass products and essential oils among others. Especially for India, Egypt can be a balancing source of crude bearing in mind US sanctions on Iran. In addition, Egypt can be a source of stable supply to meet the increasing demand for liquefied natural gas.

Some of the identified products where India has opportunity to exploit and increase exports to Egypt significantly are given in Table 3. These products are identified on the basis of India’s minimum global exports and Egypt’s global imports less India’s exports to Egypt. The data has been further filtered for those products where India’s exports to the African region have also been significant, i.e. more than US$ 50 million in 2018. Apart from significant global exports by India and imports by Egypt in these products, significant exports to Egypt indicates that the geographical distance is less of a hurdle for exporting these products to the region.

Table 3: Potential products for exports to Egypt (in US$ million)

Product code Product label India’s exports to Egypt Egypt’s imports from world India’s exports to world India’s exports to Africa Estimated export potential
    Value in 2018 Value in 2018 Value in 2018 Value in 2018 Value in 2018
300490 Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic purposes, … 5.71 1712.95 10742.97 2075.51 1707.25
870323 Motor cars and other motor vehicles principally designed for the transport of persons, incl. … 5.98 1627.59 1939.32 145.13 1621.61
020230 Frozen, boneless meat of bovine animals 85.48 1144.72 3323.26 225.65 1059.25
851712 Telephones for cellular networks “mobile telephones” or for other wireless networks 17.89 1004.95 1065.22 108.81 987.06
870322 Motor cars and other motor vehicles principally designed for the transport of persons, incl. … 4.17 814.60 3266.23 632.62 810.43
390210 Polypropylene, in primary forms 0.05 470.46 864.43 61.27 470.41
848180 Appliances for pipes, boiler shells, tanks, vats or the like (excluding pressure-reducing valves, … 5.28 334.84 774.47 54.57 329.56
730890 Structures and parts of structures, of iron or steel, n.e.s. (excluding bridges and bridge-sections… 3.029 328.542 483.489 118.149 325.51

(Source: Trade MAP and Author’s Calculations)

Based on same methodology vis-à-vis India’s imports, products where India can see Egypt as an additional and/or alternative supplier have been identified in table 4. These calculations indicate that since Egypt is a mineral rich country, its resources can aid the growth of Indian industry as well as of Egyptian businesses via enhanced trade volumes.

Table 4: Potential products for imports from Egypt (in US$ million)

Product code Product label India’s imports from Egypt Egypt’s exports to world India’s imports from world India’s imports from Africa Estimated import potential
    Value in 2018 Value in 2018 Value in 2018 Value in 2018 Value in 2018
710812 Gold, incl. gold plated with platinum, unwrought, for non-monetary purposes (excluding gold . . . 0 1,412 31,668 5509.57 1,412
270900 Petroleum oils and oils obtained from bituminous minerals, crude 919 2,147 114,508 17807.46 1,228
310210 Urea, whether or not in aqueous solution (excluding that in pellet or similar forms, or in . . . 110 1,142 1,459 175.88 1,032
271019 Medium oils and preparations, of petroleum or bituminous minerals, not containing biodiesel, . . . 0.088 902 4,609 433.21 902
271111 Natural gas, liquefied 72 501 10,865 2662.49 429

(Source: Trade MAP and Author’s Calculations)

Apart from average MFN of 19% higher than India’s average MFN of 13%, Egypt does not seem to have implemented many trade barriers against Indian goods. Optimum benefits that trickle from exploitation of the opportunities in bilateral engagement especially in trade and investment, can be leveraged through government & industry initiatives.

A Joint Study Group (JSG) has already been set up to examine the feasibility of a FTA between India and COMESA (Common Market for East and Southern Africa) which is Africa’s largest economic community comprising of 19 member states namely Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Swaziland, Sudan, Uganda, Zambia and Zimbabwe. 

Scope for action lies in improvement of logistics, exploring low cost sea and air transfer routes, industry interactions and joint ventures in oil and gas exploration. Moreover, Egypt is strategically located, making it a hub for trade routes between Europe, Africa and Asia. Through various bilateral trade agreements Egypt provides businesses with access to a consumer market opportunity of 2 billion across Europe, Asia, the Middle East and Africa. There is a strong case for Indian businesses to explore possible avenues of investment in Egypt. A moderately ambitious bilateral engagement between India and Egypt may give the desired impetus to bilateral trade and investment.

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Prasad Kaware
Prasad Kaware
1 year ago

what is the scope for frozen food items and ready to eat items in egypt,if exported from india.please enlight me regarding this.also please mention what is the best export product from india to egypt.