India-Algeria Bilateral and Trade Relations: An Overview

Posted by Written by Archana Rao Reading Time: 5 minutes

India and Algeria share a multifaceted relationship underpinned by a range of bilateral cooperation mechanisms, vibrant trade ties, and sectoral collaboration. Since the establishment of diplomatic ties in 1962, the two nations have built robust partnerships across economic, cultural, and strategic domains.

India and Algeria share a friendly and cooperative relationship, marked by mutual respect and developing economic and defence cooperation. As the global political and economic landscape evolves, the partnership between these two nations is poised for significant growth in the coming years.

Economic collaboration between India and Algeria holds immense potential across various sectors. According to Ali Achoui, ambassador of Algeria to India, opportunities for Indian businesses exist in critical sectors, including solar power, pharmaceuticals, mechanical engineering, defense industries, and information and communication technology (ICT). Agriculture, food processing, logistics, and railways also present areas for investment.

Achoui has also noted that in the services sector, software engineering, digital payments, higher education, healthcare, finance, and tourism offer substantial growth potential.

Call for strengthening economic ties

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During her October 2024 visit, Indian President Droupadi Murmu addressed the Algerian-Indian Economic Forum, emphasizing the need for deeper economic cooperation. She highlighted India’s rapid economic growth and improvements in the ‘Ease of Doing Business,’ inviting Algerian companies to participate in India’s ‘Make in India’ and ‘Make for the World’ initiatives.

Murmu also underlined Algeria’s expanding economy as a source of vast opportunities for Indian businesses, highlighting the importance of mutual efforts to unlock the untapped potential in bilateral trade, which currently stands at US$1.7 billion.

Trade relations between India and Algeria

Trade between India and Algeria has evolved into a key pillar of their relationship. India’s exports to Algeria, valued at $848.16 million in 2023-24, primarily consist of rice, pharmaceuticals, granite, and boneless meat. Imports from Algeria, totaling $885.54 million, are dominated by petroleum oils, LNG, urea, and natural calcium phosphates.

India Algeria Import-Export Data (Value in US$ Million)

Trade

FY 2019-20

FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

India’s exports to Algeria

611.02

594.74

703.25

613.83

848.16

Growth %

 

-2.66

18.24

-12.72

38.18

India’s imports from Algeria

1,996.76

408.79

1,004.24

1,503.97

885.54

Growth %

 

-79.53

145.66

49.76

-41.12

Total

2,607.79

1,003.53

1,707.49

2,117.80

1,733.70

Growth %

 

-61.52

70.15

24.03

-18.14

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

India’s export to Algeria (Value in US$ Million)

Commodity

FY 2022-23

FY 2023-24

 Growth %

Cereals.  

63.55

134.93

112.31

Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof.  

63.29

118.57

87.34

Pharmaceutical products  

75.36

83.28

10.52

Organic chemicals  

74.47

69.71

-6.39

Plastic and articles thereof.  

38.56

55.89

44.94

Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers,and parts.  

23.15

38.21

65.05

Optical, photographic cinematographic measuring, checking precision, medical or surgical inst. And apparatus parts and accessories thereof;  

13.02

29.23

124.44

Meat and edible meat offal.  

7.83

25.75

229

Salt; sulphur; earths and stone; plastering materials, lime and cement.  

18.41

19.14

3.95

Vehicles other than railway or tramway rolling stock, and parts and accessories thereof.  

12.44

18.17

46.04

Tanning or dyeing extracts; tannins and their deri. Dyes, pigments and other colouring matter; paints and ver; putty and other mastics; inks.  

13.83

17.84

28.97

Miscellaneous chemical products.  

7.57

17.71

133.88

Man-made filaments.  

10.71

15.62

45.76

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

India’s Imports from Algeria (Value in US$ Million)

Commodity

FY 2022-23

FY 2023-24

 Growth %

Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes.  

1,136.82

717.46

-36.89

Salt; sulphur; earths and stone; plastering materials, lime and cement.  

126.61

115.04

-9.14

Organic chemicals  

24.92

20.16

-19.09

Fertilisers.  

185.41

14.31

-92.28

Pulp of wood or of other fibrous cellulosic material; waste and scrap of paper or paperboard.  

17.44

8.63

-50.5

Edible fruit and nuts; peel or citrus fruit or melons.  

3.36

3.49

3.87

Cork and articles of cork.  

2.34

2.63

12.45

Wool, fine or coarse animal hair, horsehair yarn and woven fabric.  

1.35

1.07

-20.75

Raw hides and skins (other than furskins) and leather  

1.63

1.06

-35.01

Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof.  

0.4

0.51

26.7

Miscellaneous articles of base metal.  

 

0.43

 

Plastic and articles thereof.  

0.02

0.15

892.86

Other made up textile articles; sets; worn clothing and worn textile articles; rags  

 

0.09

 

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Sectoral trends reveal growth in Indian exports, particularly in cereals (112.31 percent), meat and edible meat offal (229 percent), and medical instruments (124.44 percent). Conversely, imports such as mineral fuels and fertilizers have seen notable declines. Indian companies, including Shapoorji Pallonji, IRCON International, Larsen & Toubro, and Infosys, have played a pivotal role in infrastructure, IT, hydrocarbon, and power transmission projects across Algeria.

Taxation agreements between India and Algeria

At present, India and Algeria do not have a Double Taxation Avoidance Agreement (DTAA) signed between them. On August 2, 2023, officials from India and Algeria initiated discussions for a bilateral income tax treaty. Once finalized, this would mark the first such agreement between the two nations, enhancing fiscal coordination and promoting investment flows.

In a significant move, Algeria signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) on June 17, 2024. This makes Algeria the 103rd jurisdiction to join the BEPS Convention, strengthening global tax treaty networks and advancing measures against tax base erosion.

Bilateral agreements

The two countries have signed several agreements to institutionalize their cooperation. These include Memorandums of Understanding (MoUs) on media cooperation between national broadcasters (2015), a space cooperation agreement (2018), and a visa waiver for diplomatic and official passports (2021).

Sectoral collaboration

Energy and space cooperation stand out as vital areas of collaboration. The two countries have partnered in hydrocarbon projects, with Algeria actively participating in India-Africa Hydrocarbon Conferences to strengthen energy security ties. In space sciences, a landmark agreement in 2018 has facilitated collaboration in satellite-based applications, including disaster management and crop forecasting. Notably, India successfully launched four Algerian satellites in 2016 through its PSLV-C35 mission.

Key platforms such as the Joint Commission Mechanism (JCM) and Foreign Office Consultations (FOC) serve as cornerstones of India-Algeria collaboration. Established in 1981, the JCM focuses on addressing bilateral issues and fostering mutual interests. The ninth JCM, held in Algiers in May 2015, emphasized trade and transport, while the upcoming tenth session is scheduled to take place in India at the ministerial level. Complementing this, the sixth FOC convened in November 2018 in Algiers, ensuring sustained dialogue and coordination.

Future prospects

India and Algeria are poised to expand their partnership, focusing on renewable energy, IT, infrastructure development, and trade diversification. The latest JCM meeting, held on November 4, 2024, coupled with ongoing sectoral collaborations, is expected to further solidify their ties, enabling the two nations to achieve shared goals on global and regional platforms.

This comprehensive relationship underscores the mutual commitment of India and Algeria to strengthening their partnership for sustained development and global cooperation.

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