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Squaring the circle at the India-Egypt summit

In this article, we explore the key aspects of India-Egypt relations, emphasizing its potential impact on various sectors and highlighting the significance of this partnership. It highlights the shared cultural heritage, economic ties, and diplomatic cooperation that have laid the foundation for the present-day partnership.

The India-Egypt Summit has emerged as a significant platform for bilateral cooperation, paving the way for enhanced ties between the two nations. India and Egypt share close political understanding based on long history of contacts and cooperation on bilateral, regional and global issues. The joint announcement of establishment of diplomatic relations at Ambassadorial level was made on 18 August 1947. Both countries have cooperated on multilateral fora and were the founding members of Non-Aligned Movement. There is a new momentum in our relations and a shared desire to take it to a higher level.
Historical relations
Historically, India-Egypt relations are perhaps the oldest civilisational link. In 2750 BCE, the Pharaoh Sahure sent ships to the “Land of Punt”, which historians identify with peninsular India.During the middle of the second millennium BCE, Egyptians wrapped their mummies in muslin dyed with indigo, which originated from India.
India’s Trade
India’s trade with the most populous Arab country stood at $6,061 million in 2022-23, having declined by 17% over the previous year. Nearly a third of it was petroleum-related. India was Egypt’s sixth largest trading partner, while Egypt was India’s 38th. Indian investments in Egypt were spread over 50 projects totalling $3.15 billion, half of the sum contributed by a single company. Egypt has invested only $37 million in India. There are less than 5,000 Indians in Egypt, nearly a fifth of them being students.
India-Egypt bilateral relations

India and Egypt have enjoyed a long and close relationship, dating back to the days of the Non-Aligned Movement. Prime Minister Narendra Modi’s visit to Egypt signifies the culmination of strategic initiatives undertaken by India over the past year. Key initiatives involve inviting Egypt, UAE, and Oman as special guests during India’s G20 presidency events. Visits by Defense Minister Rajnath Singh and External Affairs Minister S Jaishankar to Cairo bolstered the relationship. The invitation of President Abdel Fattah al Sisi as the chief guest for India’s Republic Day and subsequent visits by Prime Minister Modi and President Sisi demonstrate a level of interaction not seen since the 1950s. In recent years, the relationship has been further strengthened in a number of areas, including:

  • Strengthening Political Relations:

    India-Egypt relations witnesses regular high-level exchanges, including visits by their respective presidents and prime ministers. These exchanges have helped to deepen the understanding between the two countries and to build a strong foundation for cooperation on a range of issues.

  • Economic Collaboration:

    India-Egypt relations also witnesses a growing economic relationship. Bilateral trade has increased significantly in recent years, and there is significant potential for further growth. The two countries have also signed a number of agreements to promote investment and cooperation in areas such as energy, infrastructure, and manufacturing.

  • Energy Security:

    India and Egypt are both major energy consumers, and they have a shared interest in ensuring energy security. The two countries have been working together to develop new sources of energy, such as natural gas and renewable energy. They have also been working to improve energy efficiency and to reduce their dependence on imported oil.

  • Cultural Exchanges and People-to-People Ties:

    India and Egypt have a rich history of cultural exchanges, and these exchanges continue to grow. There are a growing number of Indian students studying in Egypt, and there are also a growing number of Egyptian students studying in India. The two countries also have a strong tradition of cultural cooperation, and they have jointly hosted a number of cultural events in recent years.

  • Defense Cooperation:

    India and Egypt have a long history of defense cooperation, and this cooperation has been further strengthened in recent years. The two countries have held joint exercises and have exchanged military personnel. They have also been working together to develop new defense technologies.

  • Addressing Regional Challenges:

    India and Egypt are both important players in their respective regions, and they have a shared interest in addressing regional challenges. The two countries have been working together to promote peace and stability in the Middle East, and they have also been working together to combat terrorism.

The India-Egypt relations are a strong and vibrant one, and it is likely to continue to grow in the years to come. Both countries have a shared commitment to working together and addressing the challenges of the 21st century, driven by their numerous common interests.

Leveraging Opportunities and Addressing Challenges at the Cairo Summit
  1. Size and Stability: Egypt, a large country with a population of 105 million and a stable political environment, presents opportunities for economic partnerships and collaborations.
  2. Similar Socio-Economic Conditions: Egypt’s socio-economic conditions, resembling those of India, create favorable conditions for understanding and cooperation.
  3. Import Potential: Egypt’s major imports, such as refined petroleum, wheat (the world’s largest importer), cars, corn, and pharmaceuticals, offer potential markets for India to supply these goods.
  4. Infrastructure Development Agenda: The Egyptian government’s ambitious infrastructure plans, including the construction of New Cairo, a nuclear power plant, and a high-speed rail network, present opportunities for India to participate in and contribute to these projects.
  5. Defense and Arms Market: Egypt’s status as the world’s third-largest arms importer during 2015-19 opens up opportunities for India in the defense sector.
  1. Economic Crisis: The Egyptian economy is currently facing a serious crisis due to static growth, the impact of the pandemic, global economic slowdown, and the Ukraine conflict.
  2. Inflation and Currency Devaluation: High annual inflation rates above 30% and a significant devaluation of the currency have led to increased costs of imports, including essential commodities like cereals, and have impacted the overall economy.
  3. Foreign Exchange Scarcity: Scarcity of foreign exchange has created challenges for the Egyptian government, leading to deferred payments and the postponement of projects with significant foreign currency components.
  4. Debt and Financial Constraints: Egypt’s foreign debt exceeding $163 billion and negative net foreign assets pose financial constraints on the country’s ability to invest in infrastructure and other developmental initiatives.
  5. Governance and Reforms: Entrenched interests and issues related to governance, including crony capitalism, have hindered the implementation of necessary economic reforms.
  6. Gulf Arab Support: The reluctance of affluent Gulf Arab states to provide continued financial support to Egypt due to governance concerns adds to the challenges faced by the Egyptian economy.To make the Cairo Summit meaningful, both opportunities and challenges must be addressed. India should leverage Egypt’s stable political environment, import needs, infrastructure plans, and defense market to strengthen economic ties. Additionally, efforts should focus on tackling the economic crisis, inflation, currency devaluation, foreign exchange scarcity, debt burden, and the need for effective governance and economic reforms. By addressing these aspects comprehensively, the Cairo Summit can establish a foundation for fruitful collaboration and mutual growth between India and Egypt.

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