Population (2018): 98, 423, 595
GDP (2018): 250.8 billion
Ease of Doing Business Ranking (2018): 120
Egypt is the gateway linking Africa and Asia. Located along key international trade routes, it is close to the Arabian, African, American, and European markets.
Trade flows from the Suez Canal – home to 10% of the world’s vessels – hit a record high of US$5.6 billion (S$7.6 billion) in revenue in the 2017-2018 financial year.1 Egypt’s position as a regional export hub is also well supported by its excellent infrastructure.
Sizeable Labour Force
Egypt has a large population of 97 million and a young median age of 242. Over the next five years, around three and a half million young Egyptians are projected to join the labour force.3
The Egyptian government is upgrading its talent pool through education and vocational training. Since 2014, a US$5.9 billion (S$8 billion) education plan to increase the number of market-ready graduates and promote a knowledge-based economy has been underway. This translates into a sizeable pool of manpower you can hire from when you bring your business to Egypt.
The chapter on Egypt’s economic uncertainty has undergone a massive revision in recent years. Egypt’s gross domestic product (GDP) grew by 5.3% in the last fiscal year ending in June 2018 – the highest rate since 2007.
The economic growth is a result of Egypt’s reforms, which included cuts to energy subsidies, coupled with the injection of a US$12 billion (S$16 billion) International Monetary Fund loan. The reforms have resulted in the country’s foreign currency reserves reaching an all-time high of more than US$44 billion (S$60 billion) in July 2018, compared with around US$14 billion (S$19 billion) in July 2013.3
These factors, in turn, have narrowed the country’s budget deficit, stimulated economic growth and attracted inward investments.
The Egyptian authorities have also initiated reforms to improve the efficiency of land allocation, strengthen competition and public procurement, improve transparency of state-owned enterprises, and tackle corruption. These pave the way for greater private sector development and export-led growth.
Consumer Goods & Services
Egypt’s consumer market has vast growth potential, backed by a growing middle class, youthful demographic, and high household consumption.
According to a 2017 survey, Egyptians are generally optimistic about their job prospects and confident about the state of their personal finances. The Egyptian consumer today is more discerning and seeks good quality, affordable and unique consumer products and lifestyle services.
An example would be the Egyptian market’s increasing interest in Asian cuisines, such as Japanese and Korean cuisine. In fact, the country’s food industry is booming. It has grown at an average rate of 20% for the last five years, and growth is expected to continue.
As an Indian company, you can leverage our reputation as a food paradise, and high food safety and quality standards to gain a competitive advantage in Egypt.
The Egyptian government is focusing on infrastructure projects to spur economic growth. It welcomes foreign direct investment and wants to increase the private sector’s contribution towards the country’s development.
For instance, there are plans to develop four industrial areas and three desalination projects in the Suez Canal Economic Zone (SCZone). This is to support the growing industrial demand for water and power. On a broader note, the SCZone also presents opportunities for India companies in the areas of construction, engineering, logistics, and shipping.
Other infrastructure projects in the pipeline include: Golden Triangle Project, a new industrial city which will serve as a global mining hub; and the New Administrative Capital project, an administrative city 40 km to the east of Cairo.
India’s expertise in project development, technical expertise, as well as financing and advisory services puts your company in an advantageous position. You can leverage India’s infrastructure ecosystem and explore working with other India companies to address Egypt’s infrastructure needs.
Manufacturing contributes to almost a fifth of Egypt’s GDP3. Automobiles, electronics, food, pharmaceutical, and textiles constitute the bulk of production.
In 2016, the Egyptian government announced a four-year, five-pillar strategy to transform the country into a major regional industrial centre and export hub. It also introduced a new law to speed up the process of establishing new industrial projects. This reduces the waiting period for 80% of industries to a week or less.4
The food processing industry has been particularly dynamic, averaging growth of 12% per year from 2010 till 20165. This spells new business opportunities for you. For example, your company can collaborate with Egyptian partners to co-create food processing or packaging solutions that increase productivity, with the aid of technology.
The political situation in Egypt has stabilised. Countries are lifting their travel ban, and visitors are returning to the country. There were 8.3 million tourists in 2017, and Egypt said visitor numbers are on track to reach pre-revolution levels by 20216.
Cheaper prices and an improved security situation have boosted tourist numbers in the first quarter of 2018, which were up 30% over the previous year, and hotel occupancy rates are at their highest since 20107.
Cairo boasts of luxury hotel brands such as Four Seasons and The Ritz-Carlton. In a sign of returning investor confidence, St. Regis will be opening a brand new hotel in Cairo in 2018.
Egypt has indicated that the country will be offering international investors the opportunity to develop sustainable cities along the Red Sea and Mediterranean coasts. In April 2018, the Tourism Development Authority indicated that it has identified locations around the country to establish high-end projects, and that tenders will be announced once the list and plan are finalised.
Upcoming developments such as the New Alamein City and Cairo’s new administrative capital are expected to help drive tourist traffic by adding to the number of places to visit in Egypt. These new cities are part of a larger plan to reform the tourism sector.
The rebound in tourism in Egypt bodes well for India companies in the tourism and hospitality sector. You can consider extending your service offerings to Egypt, be it through fly-cruise-stay packages, tailored travel itineraries, or tourist accommodation.
India and Egypt, two of the world’s oldest civilizations, have enjoyed a history of close contact from ancient times. Ashoka’s edicts refer to his relations with Egypt under Ptolemy-II. In modern times, Mahatma Gandhi and Saad Zaghloul shared common goals on the independence of their countries, a relationship that was to blossom into an exceptionally close friendship between Gamal Abdel Nasser and Jawaharlal Nehru, leading to a Friendship Treaty between the two countries in 1955.
Egypt has been traditionally one of India’s most important trading partners in the African continent. The India-Egypt Bilateral Trade Agreement has been in operation since March 1978 and is based on the Most Favoured Nation clause and the bilateral trade has increased more than five times in last ten years. The bilateral trade volume between the two countries had shown consecutive positive growth from 2005-06 to 2012-13, taking the trade from US$ 1.2 billion to its peak of US$ 5.45 billion. Starting from 2013-14 the trade volume gradually declined from US$ 4.95 billion to US$ 4.77 billion in 2014-15 and to US$ 3.23 billion in 2016-17, due to general economic slowdown and fall in oil prices. However, it showed positive growth in 2017-18 to reach the level of US$ 3.68 billion and further grew by 23% in 2018-19 to reach US$ 4.55 billion. The top three Indian exports during this period were: motor cars, meat & cotton yarn while the top three Indian imports were; crude petroleum, urea and anhydrous ammonia. During the period, India was Egypt’s 8th largest export destination the 10th largest import source for Egypt.
Over 450 Indian companies are registered 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 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 also execute projects in railway signaling, pollution control, water treatment, irrigation, anti-collision devices, power sector etc. 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.
Egyptian investments in India are to the tune of US$ 49 million, which include ElSewedy- Group (smart electrometers); KAPCI Coatings (car paints) and Modern Waterproofing Group/ Bitumode (waterproofing membranes and protection boards for construction industry).
India’s grants-in-aid projects in Egypt include: Pan Africa Tele-medicine and Tele-education project in Alexandria University, Solar electrification project in Agaween village and Vocational Training Centre for textile technology in Shoubra, Cairo, which have been completed. An IT Centre has been established in Al Azhar University and is partially operational.
Technical cooperation and assistance has been a major part of our bilateral relationship. Since the year 2000, over 800 Egyptian officials have benefited from ITEC programmes. During the year 2018-19, 118 ITEC scholarships were availed by Egyptian students. 12 students availed IAFS scholarships and 12 others traveled to India under the ICCR scholarship programme. 5 Egyptian students availed Hindi scholarships at Central Hindi Institute, Agra in 2018-19. Egyptian diplomats have been attending the Professional Course for Foreign Diplomats at FSI, New Delhi. FSI also organized a special course for young Egyptian diplomats from 10-22 June 2019. ICAR and the Agricultural Research Center of Egypt are working in the field of agricultural research. ‘Science & Technology’ cooperation is implemented through biennial Executive Programmes. Visiting professors in the fields of Mathematics and Bioinformatics occupied the first ICCR chair in Egypt from Sep 2016 to June 2018, which was established in Ain Shams University in March 2016.
Egypt signed the ISA framework agreement as a founding member in March 2018 and ratified it in January 2019.
Mineral fuels, vehicles, organic chemicals, cotton, electrical machinery, plastics, inorganic chemicals, meat, iron & steel articles.
|Product Code||Product Label||India’s exports to Egypt in 2018 (Value in US$ million)|
|’27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral …||528.1|
|’87||Vehicles other than railway or tramway rolling stock, and parts and accessories thereof||215.8|
|’85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television …||190.8|
|’84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||170.6|
|’39||Plastics and articles thereof||143.6|
|’28||Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, …||140.3|
|’02||Meat and edible meat offal||92.1|
|’73||Articles of iron or steel||86.5|
According to the ITC Trade Map, India has an untapped trade potential of US$ 2.2 billion. The products with greatest export potential from India to Egypt are Bovine cuts boneless, frozen, Medicament’s consisting of mixed or unmixed products, for retail sale, and Black tea, packings >3kg. Bovine cuts boneless, frozen shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports worth $290.0 mn.
|Product code||Description||Export potential|
|020230||Bovine cuts boneless, frozen||US$ 290 million|
|3004Xb||Medicaments consisting of mixed or unmixed products, for retail sale||US$ 186.4 million|
|090240||Black tea, packings >3kg||US$ 97.2 million|
|740311||Copper cathodes||US$ 93.7 million|
|720719||Semi-finished products of iron or steel||US$ 96.8 million|
Mineral fuels, fertilizers, inorganic chemicals, salts, man-made fibres, cotton, ediblr fruits & nuts, plastics, glass, raw hides & skins.
|Product Code||Product Label||India’s imports from Egypt in 2018 (Value in US$ million)|
|’27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral …||1036.4|
|’28||Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, …||110|
|’25||Salt; sulphur; earths and stone; plastering materials, lime and cement||95.2|
|’55||Man-made staple fibres||80.7|
|’08||Edible fruit and nuts; peel of citrus fruit or melons||39.5|
|’39||Plastics and articles thereof||28.8|
|’70||Glass and glassware||18.7|
|’41||Raw hides and skins (other than furskins) and leather||14|
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