INDIA - EGYPT RELATIONS – INTERNATIONAL
News: First
time an Egyptian President (Abdel Fattah El-Sisi) has been invited as chief
guest for the Republic Day celebrations in India.
What's in the news?
● India
and Egypt agreed on January 25, 2023, to elevate their bilateral ties to “Strategic Partnership” covering political,
security, defence, energy and economic aspects.
Key takeaways:
● India
has invited Egypt as a special guest for
the G-20 summit which shows our age-old relationship.
● Both
countries have decided that under the India-Egypt strategic partnership will
create a long term structure of cooperation on political, security, economic,
and scientific areas.
● The
scope for cooperation in India-Egypt
relations especially in the fields of defence
and security is “unlimited”.
India and Egypt Bilateral Relationship:
1. Backdrop:
● India
and Egypt, two of the world’s oldest civilizations, have had a long history of
close contact.
● High-level
exchanges with Egypt continued post 2011 Egyptian Revolution and the new
government led by President (Sisi) took over in 2014.
● The
year 2022 marks the 75th anniversary of
India-Egypt diplomatic relations.
● Egypt
has been invited to be a “Guest Country” during India’s G20 presidency in
2022-23.
2. Shared vision of NAM:
● The
personal equation between Prime Minister Nehru and President Nasser was
legendary and the two also became the stalwarts of the nonaligned movement
during the Cold War of the 1960s.
3. Friendship treaty:
● The
two nations became even closer in the 1950s and concluded a historic Friendship Treaty in 1955.
● During
the last couple of years, the traditionally strong bilateral relations enjoyed
by the two countries have received an impetus with regular exchange of
high-level meetings and contacts between the two sides.
4. Bilateral trade:
● Egypt
has traditionally been one of India’s most important African trading partners.
● The
India-Egypt Bilateral Trade Agreement,
which is based on the Most Favored Nation clause, has been in effect since March 1978.
● Bilateral
trade increased rapidly in 2021-22, totaling 7.26 billion, a 75% increase over
FY 2020-21.
● During
this period, India’s exports to Egypt totaled US$ 3.74 billion, a 65% increase
over the same period in FY 2020-21.
● At
the same time, Egypt’s exports to India increased by 86% to US$ 3.52 billion.
5. Agriculture Relations:
● The
India-Egypt Workshops on Nanotechnology
and Agriculture-Biotechnology took place in Mumbai in January 2019 and
Shillong in September 2018, respectively.
● Agriculture,
nanotechnology, biotechnology, and renewable energy were the main topics of
discussion at the 5th Joint Committee Meeting on Science and Technology, which
was held virtually on October 5, 2021.
● Wheat export:
○ The
Russia-Ukraine conflict has
threatened Egypt’s wheat supply, which is 80% imported from Russia and Ukraine.
○ Egypt
announced the addition of India to the list of accredited countries that can
supply wheat to Egypt in April 2022, putting an end to a long-pending
Non-Tariff Barrier.
○ Despite
the fact that India’s ban on wheat exports made the shipment difficult to
complete, India cleared an initial shipment of 61,500 metric tonnes of wheat
for Egypt in May 2022.
6. Technical Cooperation:
● Technical
cooperation and assistance have been a major part of the bilateral
relationship.
● Egyptian
candidates visit India under the Indian
Technical and Economic Cooperation Programme (ITEC).
7. Defence Relations:
● Exercise Cyclone-I
is the first ever exercise between Indian Army and Egyptian Army held in
Jaisalmer recently.
● Desert Warrior,
the first IAF-EAF Joint Tactical Air Exercise, took place from October 29 to
October 31, 2021.
● Egypt
is interested in procuring defence equipment from India. India is planning to
supply LCA Tejas, missiles like Akash, DRDO’s Smart Anti-Airfield Weapon and
radars.
● A
military contingent from the Egyptian Army will participate in the Republic Day parade.
8. Cultural Relations:
● “India Day”
was held on November 16, 2021, at the Command & Staff College in Cairo.
● About
500 officers from more than 20 countries heard the ambassador speak on Indian
foreign policy.
● Through
regular events like Hindi, Urdu, and yoga classes, seminars, film screenings, exhibitions,
and involvement in regional cultural activities, the Maulana Azad Centre for Indian Culture (MACIC) has been fostering
cross-cultural cooperation.
● The
150th anniversary of Mahatma Gandhi’s birth was marked by commemorative events organized
by the Egyptian Embassy on October 2, 2018.
9. Scientific and Space Cooperation:
● ICAR and the Agricultural
Research Center of Egypt collaborate
scientifically in the area of agricultural research.
● Through
biennial Executive Programs and the Scientific Cooperation Program between CSIR
(India) and NRC, “Science &
Technology” cooperation is carried out (Egypt).
● Egypt
joined the International Solar Alliance
in March 2018 and ratified the framework agreement in January 2019.
Importance of Egypt:
● Egypt
is a pillar of the Arab world and a
key regional leader of the African continent.
● The Suez Canal,
connecting the Mediterranean Sea and the Red Sea, offers the shortest sea link
between the East and the West. As the largest Arab nation with a population of
over 80 million, Egypt has traditionally played a central role in regional
politics for decades.
● Egypt
plays a pivotal role in managing
relations with Iran and Turkey and combating sea piracy across the Red Sea and
the Mediterranean.
● Egypt
also possesses one of the largest and
most well-equipped armed forces in the region and has the 10th largest army
in the world. Egypt’s importance to the area is therefore undeniable. As a
result, there is a strong connection between the various developments within
Egypt and the region.
● As
India seeks to expand its economic and strategic interests in the Gulf region
and Africa and further strengthen its ‘Look
West’ policy, peace and stability in the area are critical. Egypt forms a
key vector in this equation.
Challenges ahead:
1. Pandemic Effect:
● Egypt's
economy has been in shambles for several years. It was battered by the collapse of tourism during the
pandemic, and the Russia-Ukraine war
impacted its food supply - nearly 80% of Egypt's grain came from these two
countries as well as its foreign exchange reserves.
● Despite
export restrictions, India allowed 61,500 metric tonnes of wheat to Egypt
last year.
2. Inflation:
● Inflation
is at a five-year high of 21%. Egypt
has asked the International Monetary Fund (IMF) for a bailout for the fourth
time in six years.
● It
received a $12 billion IMF loan in 2016, as well as $8 billion in budgetary
support from Saudi Arabia and the UAE.
● Egypt
has sought infrastructure investments from India, including Metro projects in
Cairo and Alexandria, a Suez Canal
Economic Zone, a second Suez Canal channel, and a new administrative
capital in a Cairo suburb.
● More
than 50 Indian companies have invested more than $3.15 billion in Egypt.
3. China's dominance:
● China's
bilateral trade with Egypt is currently worth $15 billion, more than doubling India's $7.26 billion in
2021-22.
WAY FORWARD:
● Russia’s war on Ukraine
led to a commodity crunch, specifically in the
agriculture sector like critical wheat imports - India may come out as a viable
alternative
● Energy security
is set to become even more precarious over the next few years, India’s naval
and aerial military engagements through the mechanism of joint exercises should
also see an uptick.
● Trade cooperation
- such as the Suez Canal is critical for India as part of international trade
systems.
● For
India, a deeper economic engagement with
Egypt therefore acquires an additional strategic imperative.
● While
Egypt clearly needs to do more to market itself as an investment destination in
India, it is also important for industry bodies like CII, FICCI and ASSOCHAM to
take a more proactive approach.
Invitation to Egypt President
was clearly indicated that India's interest towards Egypt relations and it
further improved by elevating India and Egypt relations from bilateral ties to
a “Strategic Partnership” covering
political, security, defence, energy, and economic aspects.