India-Egypt Bilateral Trade and Investment

With steady trade, emerging areas of investments, and increasing scientific collaboration, the India-Egypt partnership is poised for growth.

India and Egypt’s bilateral economic relationship is deeply rooted in historical and strategic cooperation. Anchored by the 1978 Bilateral Trade Agreement based on the Most Favored Nation (MFN) clause, their partnership has flourished into a robust economic collaboration. Over the past decade, bilateral trade has grown fivefold, reflecting the dynamism and mutual benefits of this enduring relationship. Both nations continue to explore new avenues for cooperation in trade, investment, science, and sustainable development.

Also Read: Why BRICS Matters and India’s Strategic Role in the Multilateral Grouping

Bilateral trade trends

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India and Egypt have consistently enhanced their trade relations, reaching a bilateral trade volume of US$6.06 billion in FY 2022-23. India exported goods worth US$4.11 billion and imported goods valued at US$1.95 billion, maintaining a significant trade surplus.

Key exports and imports

• Indian exports to Egypt: Buffalo meat, iron and steel, engineering goods, light vehicles, cotton yarn, and chemicals.
• Indian imports from Egypt: Mineral oil, fertilizers, inorganic chemicals, cotton, and other raw materials.

Sectoral performance

The surge in trade relations is driven by robust performance in key sectors:

• Agriculture and food security: India’s supply of wheat to Egypt during the Russia-Ukraine conflict underlined its role as a reliable partner.
• Metals and chemicals: Growing exports of steel and chemicals reflect India’s diversified trade approach.

2022 wheat trade

The Russia-Ukraine conflict severely disrupted Egypt’s wheat supply, as over 80 percent of its imports were sourced from these countries. India stepped in by becoming an accredited wheat supplier, breaking down long-standing non-tariff barriers. This culminated in the shipment of 61,500 metric tons of wheat in May 2022, marking a milestone in agricultural trade between the two nations.

August 2024 trade snapshot

• India’s trade surplus with Egypt stood at US$224 million, driven by exports worth US$273 million and imports totaling US$49 million.
• Compared to August 2023:
  • Exports: Marginal growth of US$337,000, signaling resilience in trade ties.
  • Imports: A sharp decline of US$75.4 million, highlighting changing import dynamics.

Investment landscape

Indian investments in Egypt

India has emerged as a major investor in Egypt, with over US$3.25 billion deployed across multiple sectors. Around 50 Indian companies operate in Egypt, collectively employing approximately 35,000 Egyptians.

Major Indian investors:

1. TCI Sanmar: Invested US$1.5 billion in the chemicals sector, representing the largest Indian investment in Egypt.
2. Tech Mahindra: Opened its first global delivery center in Egypt in 2022, showcasing India’s IT and digital expertise.
3. Green Hydrogen Projects: ReNew Power, ACME, and Ocior Energy have signed MoUs worth US$18 billion, strengthening Egypt’s renewable energy landscape.
4. Dabur, Godrej, and Mahindra: Significant contributors to the agricultural, consumer goods, and automotive sectors.

Egyptian investments in India

Egypt’s investments in India amount to US$37 million, focusing on innovative industries such as:

• Smart electrometers: Led by ElSewedy Group.
• Construction materials: Initiatives by Modern Waterproofing Group.
• Car paints and IT services: Reflecting Egypt’s growing interest in Indian markets.

Collaborative mechanisms

Trade promotion

Bilateral trade is supported by mechanisms such as trade fairs, business delegations, and virtual forums. Since August 2021, over 14 business delegations and 600 Indian companies have participated in Egyptian trade fairs. Sector-specific forums on agriculture, gems and jewelry, and textiles have catalyzed cross-border business opportunities.

Scientific and technological cooperation

India and Egypt share a robust framework for scientific collaboration:

• Agricultural research: Partnerships between ICAR (India) and the Agricultural Research Center of Egypt focus on increasing agricultural productivity and innovation.
• Space technology: ISRO and Egypt’s space agencies are working on new frameworks to enhance space exploration and satellite technology.
• Human resource development: Over 1,600 Egyptian officials have benefited from Indian technical and educational training programs, strengthening institutional and professional capacities.

Renewable energy collaboration

As members of the International Solar Alliance (ISA), both nations are committed to promoting renewable energy solutions. India’s investments in Egypt’s green hydrogen projects and solar energy development align with global sustainability goals.

Double Taxation Avoidance Agreement (DTAA)

Signed in 1969, the India-Egypt DTAA plays a critical role in fostering economic cooperation and reducing tax-related barriers for individuals and businesses operating across borders.

Key features:

1. Taxation rules:
   • Residency-Based Taxation: Determines tax obligations using criteria like domicile and habitual abode.
   • Permanent establishments (PE): Defines taxable entities, including offices and factories, while exempting facilities for storage or procurement.
   • Specific income categories:
     • Business profits: Taxed in the country where the permanent establishment exists.
     • Capital gains: Taxed where the asset is located.
     • Dividends and royalties: Taxed in the source country, with safeguards against excessive taxation.
2. Non-discrimination: Ensures equal treatment for nationals and enterprises, preventing discriminatory taxation.
3. Dispute resolution: Facilitates mutual agreement mechanisms to address tax disputes.
4. Elimination of double taxation: Employs credit and exemption methods to ensure income is taxed only once.

Strategic outlook

India and Egypt are deepening their multifaceted partnership, focusing on emerging sectors such as:

1. Renewable energy: Joint initiatives in green hydrogen and solar power to address climate change challenges.
2. Space technology: Enhancing collaboration in satellite development and space exploration.
3. Infrastructure development: Opportunities in transport, logistics, and urban development.
4. Agri-tech and food security: Expanding trade in agricultural commodities and technology.

With steady trade, emerging areas of investments, and increasing scientific collaboration, the India-Egypt partnership is poised for growth, driving mutual prosperity and advancing global sustainability goals.

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