Country Profile – Egypt

Photo by Spencer Davis from Pexels

Egypt is the 62nd largest export economy in the world and the 72nd most complex economy according to the Economic Complexity Index (ECI). In 2017, Egypt exported $30.1B and imported $64.1B, resulting in a negative trade balance of $34B. In 2017 the GDP of Egypt was $235B and its GDP per capita was $11.6k.

Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley where most economic activity takes place. Egypt’s economy was highly centralized during the rule of former President Gamal Abdel NASSER but opened up considerably under former Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK. Agriculture, hydrocarbons, manufacturing, tourism, and other service sectors drove the country’s relatively diverse economic activity.

Despite Egypt’s mixed record for attracting foreign investment over the past two decades, poor living conditions and limited job opportunities have contributed to public discontent. These socioeconomic pressures were a major factor leading to the January 2011 revolution that ousted MUBARAK. The uncertain political, security, and policy environment since 2011 has restricted economic growth and failed to alleviate persistent unemployment, especially among the young.

In late 2016, persistent dollar shortages and waning aid from its Gulf allies led Cairo to turn to the IMF for a 3-year, $12 billion loan program. To secure the deal, Cairo floated its currency, introduced new taxes, and cut energy subsidies – all of which pushed inflation above 30% for most of 2017, a high that had not been seen in a generation. Since the currency float, foreign investment in Egypt’s high interest treasury bills has risen exponentially, boosting both dollar availability and central bank reserves. Cairo will need to make a sustained effort to implement a range of business reforms, however, to induce foreign and local investment in manufacturing and other labor-intensive sectors.

 

Egypt’s top exported and imported Agri Products

Top exported products (Million US$)		Value	HS CODE	Top imported products (Million US$)	Value
HS0805	Citrus fruit, fresh or dried	634	HS1001	Wheat and meslin	2 624
HS0406	Cheese and curd	273	HS1005	Maize (corn)	1 723
HS0701	Potatoes, fresh or chilled	273	HS0202	Meat of bovine animals, frozen	1 029
HS1701	Cane or beet sugar	235	HS1201	Soya beans, whether or not broken	864
HS0703	Onions, shallots, garlic, leeks	234	HS1701	Cane or beet sugar	800

 

Egypt’s top exported and imported Non-Agricultural Products

Top exported products (Million US$)		Value	HS CODE	Top imported products (Million US$)	Value
HS2710	Petroleum oils, other than crude	2 440	HS2710	Petroleum oils, other than crude	5 577
HS7108	Gold	2 107	HS2711	Petroleum gases	3 513
HS2709	Petroleum oils, crude	2 106	HS3004	Medicaments in measured doses	1 961
HS3102	Nitrogenous fertilisers	974	HS2709	Petroleum oils, crude	1 751
HS8544	Insulated electric conductors	766	HS8703	Motor cars for transport of persons	1 683

 

India-Egypt Trade and Commercial Relations:

India’s top 10 exports to Egypt

HS CODE	Product Labels	India’s exported value to Egypt in USD Million in 2017	Equivalent ad valorem tariff faced by India in %
TOTAL	All products	2349.534
020230	Frozen, boneless bovine meat	265.895	0
271019	Medium oils and preparations	194.869	5
390760	Polyethylene terephthalate”, in primary forms	91.213	0
870321	Motor cars	73.761	27
281820	Aluminium oxide (excluding artificial corundum)	62.546	2
520523	Single cotton yarn	60.926	5
520524	Single cotton yarn with different densities	37.408	5
100630	Semi-milled or wholly milled rice	35.784	0
540233	Textured filament yarn of polyester (excluding that put up for retail sale)	25.541	5
294200	Separate chemically defined organic compounds	25.471	2

 

India’s top 10 imports from Egypt

HS CODE	Product Labels	India’s imported value from Egypt in USD Million in 2017	Equivalent ad valorem tariff faced by India in %
TOTAL	All products	1216.074
2709	Petroleum oils, crude	701586	0
2510	Natural calcium	121.002	5
2711	Petroleum gas and other gaseous hydrocarbons	115.837	4
5201	Cotton, neither carded nor combed	45.640	0
2704	Coke and semi-coke of coal	34.010	5
7005	Float glass and surface ground or polished glass	21.530	10
805	Citrus fruit, fresh or dried	17.430	30
1209	Seeds, fruits and spores	16.685	9
7019	Glass fibres, incl. glass wool	12.172	10
2707	Oils and other products of the distillation of high temperature coal tar	8.391	3

Commercial Presence Out of the 50 Indian companies operating in Egypt with a combined investment of roughly US $ 2.5 billion, approximately 25 companies are joint ventures and wholly owned Indian subsidiaries. The rest of the Indian companies operate in Egypt through their representative offices and execute various projects for Governmental organizations. Major Indian investments in Egypt include TCI Sanmar, Alexandria Carbon Black, the Alexandria Fibre Co., Dabur India’s production facility for its cosmetics line, Egypt-India Polyester Company (EIPET) for manufacture of PET Resin, SCIB Paints, etc. The Oberoi Group manages a hotel and runs Nile cruises; Kirloskar Brothers sells diesel engines and irrigation pump sets in Egypt; Ashok Leyland, Tata Motors, Maruti Suzuki and Mahindra & Mahindra market their vehicles in Egypt, and Bajaj Auto dominates the three-wheelers market. Indian Public Sector Undertakings like Gas Authority of India Ltd, ONGC Videsh Ltd (OVL)., Gujarat State Petroleum Corporation (GSPC) also have a presence in Egypt, as does the State Bank of India. Indian companies also execute projects in railway signaling, pollution control including air pollution equipment, water treatment, irrigation, anti-collision devices etc.