Relations between countries is much about convergence of minds. Nothing exemplifies this better than India-Egypt ties enriched by the over a century-old bond. Today, India and Egypt are at the cusp of a larger transformation, which captures economy, businesses, science and technology and several other areas.
The opportunities will be closely watched as Egypt’s President Abdel Fattahel-Sisi arrives in India on Thursday. The much awaited visit follows his interaction with Prime Minister Narendra Modi on the sidelines of the UN General Assembly in September 2015 and the intensification of dialogues between the two countries thereon. The momentum of interaction was subsequently followed at the Third India-Africa Forum Summit at New Delhi in October 2015.
Today, a rapidly transforming Egypt has embarked on a journey of democratisation and restructuring. As a $286 billion economy with around 89 million consumers – the second largest in Africa – the potential and scope of Egypt as a market is immense. Significant changes are also taking place in India that augur well for a more proactive cooperation agenda.
India is on an ambitious track of economic and tax reforms. The initiatives include developing a unified tax structure through Goods and Services Tax, the opening up of crucial sectors like defence, aviation and pharma to FDI, a larger focus on manufacturing and innovation, coupled with higher public investment in infrastructure.
In short, the India-Egypt dynamics has all the components of a very strong bilateral engagement. It is time to take the next leap forward. The starting point could be trade. Egypt has traditionally been one of India’s most important trading partners, and currently we are the second largest destination for its exports.
However, this can be increa-sed significantly. We are yet to fully tap sectors like textiles, apparel machinery, automotive components, chemicals and co-nsumer goods. India and Egypt need to workout mutually beneficial solutions to enhance two-way trade significantly by having preferential arrangements as well as better coordination.
Investments serve as a springboard for trade, and Indian companies have a lot of room for stepping up their level of involvement in Egypt’s FDI. The Federation of Indian Chambers of Commerce and Industry (Ficci) has been working closely with the India-Egypt Business Council, which was formed by the Trade and Industry Ministry of Egypt to promote bilateral trade and investment. A meeting of the Business Council is being organised on the sidelines of the visit of the Egyptian president.
Manufacturing, too, offers some great prospects. In positioning India as a manufacturing and R&D hub under the ‘Make in India’ initiative, some serious exploration is required of the biggest strength of Egypt, which is also its key business driver – the country’s geo-strategic location. A manufacturing base in Egypt would allow our industry to access markets in Europe, Africa and West Asia.
Infrastructure is another area of opportunity. India’s experience in developing economic corridors, metro projects, housing and urban development would be valuable to Indian players interested in participating at the Suez Canal Economic Zone and other similar projects. A Public Private Partnership model of cooperation, in this regard, is a highly workable idea.
Digital India Programme
The Digital India Programme, if tapped, could be useful in Egypt’s development needs such as e-government solutions, new banking platforms, information management and low cost IT parks among others. Besides solar energy, there is trem-endous scope for enhancement of such cooperation. India could also tap Egypt with its huge gas resources as a top priority source of fertilisers like urea, and make it an important partner in its quest for food security.
Our small and medium enterprises are the backbone of industrial development. This has special relevance for Egypt and we could look at strengthening cooperation in the SME sector. As the largest provider of affordable generic medicines globally, Indian companies have excellent business opportunities in Egypt’s pharma market, particularly in anti-cancer and biotech products. They may also conte-mplate joint ventures for setting up production facilities there.
Nurturing of entrepreneurial habits is critical today to fuel the economic engine of any economy and Egypt is no exception. The ‘Startup India’ movement to boost entrepreneurship paves the way for collaboration between New Delhi and Cairo. Educators and capacity building institutions from both sides could collaborate to find mechanisms to foster entrepreneurship and instil competitiveness.
Of course, India would like to see assured commitments to remove bottlenecks in order to intensify engagements. Goods produced in free zones with certificate of origin from Egypt are not entitled for duty and tariff benefits and absence of anti-dumping and safeguard duties leads to heavy losses for Indian companies in Egypt.
Differential duties for cars coming from Europe, which is around 20% and coming from India with 40% is a big hindran-ce. Tax incentives to new inves-tors for at least a few years as a motivation and a dispute resolu-tion mechanism to make it easier to do business are imperative to make the relationship stronger.
It is time to give wings to a new chapter in India-Egypt cooperation. With the progress made so far and prospects hereon, only sky is the limit.
(The writer is president, Ficci)
