India-Egypt Relations – Recent Developments -Explained, pointwise

Introduction

India-Egypt relations have taken significant strides recently, especially following Indian Prime Minister visit to Egypt in June 2023. These engagements underline India’s focus on deepening ties with this key Middle Eastern nation. Egypt’s geopolitical significance and India’s rising global stature provide a backdrop for this growing partnership. From enhanced defence collaboration to trade agreements, these strategic dialogues are setting a positive direction for the future of India-Egypt relations.

Recent Developments and their importance

Strategic Partnership Agreement: Both nations elevated their bilateral relationship to a strategic partnership, with an agreement signed to formalize this status. This strategic partnership focuses on four main areas: politics, defence and security; economic engagement; academic and scientific exchanges; and cultural and people-to-people contacts.

The “India Unit” in the Egyptian government: Egypt constituted an “India unit” within his government. This unit consists of seven cabinet ministers who will work alongside Prime Minister Mostafa Madbouly to strengthen the India-Egypt relationship.

Defence trade and cooperation: India has shown interest in expanding its defense trade with Egypt, with a focus on promoting its domestic defense production. Egypt has expressed interest in the Tejas Light Combat Aircraft, an Indian-made fighter jet.

Economic engagement and trade opportunities: India and Egypt are exploring opportunities in the Suez Canal Economic Zone (SCZONE), which offers easy access to markets in Europe, Africa, and the Gulf.  This holds potential for the ‘Made by India for the World’ export-oriented program.  Several Indian companies already use Egypt as a manufacturing base.

G20 invitation: India has invited Egypt as a guest country for the G20, recognizing Egypt’s significant influence in the Arab world and its strategic location.  Egypt’s participation in the G20 is seen as beneficial due to its representation of developing countries’ aspirations.

Award recognition for PM Modi: PM Narendra Modi was conferred with the Order of the Nile, Egypt’s highest award, signifying the importance of India-Egypt ties and acknowledging India’s stature as a rising global power.

Historical connections: Indian PM visited the Heliopolis War Memorial, which commemorates the 3,799 Indian soldiers who sacrificed their lives in various battles in Egypt during the First World War. He had also visited the 11th-century Al-Hakim Mosque, restored with the help of the Dawoodi Bohra community in India

A Brief Overview of India-Egypt Relations

Ancient connections: Both have a long history of contact dating back to the time of Ashoka. Fine Indian muslin, a type of cotton fabric was also used for wrapping mummies.

Mahatma Gandhi and Egypt: Mahatma Gandhi, philosophy of nonviolence and civil disobedience inspired several Egyptian nationalists in their own fight for independence. There was a mutual admiration between Gandhi and Egypt’s nationalist leader Saad Zaghloul, and this connection had a profound impact on the bilateral ties of the two nations.

Post-Independence relations: After gaining independence, diplomatic relations were established in 1947, and a friendship treaty was signed in 1955. India also condemned the attack on Egypt during the 1956 Suez Crisis and tried to mediate. Both adopted a non-aligned foreign policy, and they co-founded the Non-Alignment Movement (1961) during the Cold War era. Their shared commitment to anti-colonialism and anti-imperialism brought them closer. This led to strong diplomatic relations, with the likes of Jawaharlal Nehru and Gamal Abdel Nasser fostering these ties.

Modern-Day relations: In the contemporary era, India and Egypt have nurtured their strategic partnership, symbolized by high-level diplomatic visits, such as the Indian Prime Minister’s tour to Egypt in June 2023. However, despite these promising diplomatic endeavours, their economic ties have not yet reached their full potential, with a decline in trade by 17% amounting to $6,061 million in 2022-23. This points towards the need for diversifying the economic relationship beyond oil and petroleum.

Read more: India-Egypt Relationship – Explained, pointwise

What is the significance of India Egypt Relations?

Strategic importance: Egypt’s geopolitical position, straddling Asia and Africa, and its control of the Suez Canal, a key global commercial artery, gives it significant strategic value. This makes Egypt an important partner for India in the region.

Counter-Terrorism cooperation: There is strong convergence between India and Egypt in the fight against religious extremism and terrorism. Given the global challenge posed by these issues, cooperation in this area is significant for both nations.

Economic potential: Trade relations between India and Egypt are expanding, with India now among Egypt’s top ten trading partners. Further, the potential for India to expand its presence in the Suez Canal Economic Zone (SCZONE) offers exciting opportunities for growing economic relations. Egypt holds huge potential for the domestic industry in various sectors like agri products, steel items and light vehicles.

Cultural and historical Ties: India and Egypt share deep cultural and historical ties that date back to ancient times. These ties play a significant role in fostering mutual understanding and people-to-people connections, enhancing the overall relationship.

Regional influence: Egypt, as the largest country in the Arab world and home to the Arab League’s headquarters, exerts considerable influence in the Middle East and North Africa. An enhanced relationship with Egypt can aid India’s engagement with the broader region.

Defence cooperation: The bilateral defence cooperation has seen a fair bit of activity with joint exercises and high-level visits. As India shifts its focus towards defence exports, Egypt could be a potentially significant market.

Education and knowledge sharing: The presence of an Indian Centre for Excellence in IT at Cairo’s prestigious Al Azhar University is indicative of the potential for further educational collaboration and knowledge sharing between the two nations.

What are the challenges of India Egypt Relations?

Domestic economic instability. Egypt Government is battling high inflation of 21%, which has resulted in historically high prices of commodities and daily-use items. Its foreign debt is over $163 billion (43% of the GDP) and its net foreign assets are minus $24 billion. Prolonged economic instability may lead to mass discontent and movement similar to the 2011 revolution.

Political differences: There have been differences on key international issues. For instance, Egypt has not always shared India’s position on the United Nations Security Council (UNSC) reforms.

Regional instability: Egypt’s geographical location in North Africa places it in proximity to several unstable regions and conflict zones, including Libya and Sudan. This instability can indirectly impact India-Egypt relations by creating uncertainties in areas of mutual interest such as regional security and economic investment.

Navigating regional politics: Both India and Egypt have complex regional relationships to navigate. Balancing these relationships, particularly as they pertain to issues such as Kashmir for India or the Israeli-Palestinian conflict for Egypt, could pose challenges.

China’s growing influence: China’s growing economic presence in Africa, including Egypt, is another significant challenge. China’s Belt and Road Initiative has been making significant inroads in Africa and this has increased China’s influence in the region. Balancing relations with China while trying to increase India’s economic engagement in Egypt and the broader African region could be a tricky diplomatic challenge for India.

Competition with other powers: Apart from China, there are other global and regional powers also engaging actively with Egypt, including the United States, European Union countries, Russia, and Gulf states. Managing the relationship with Egypt in the face of competition from these powers can pose diplomatic challenges for India.

What should be the future path?

Enhanced bilateral trade and investment: Both nations should aim to increase trade volumes and investment flows. India should consider negotiating a free trade agreement (FTA) with Egypt. India’s expertise in areas such as IT, healthcare, and pharmaceuticals could be leveraged in Egypt. At the same time, opportunities should be explored for Indian investments in Egypt.

Strengthening defence cooperation: As the partnership has shown growth in defence and security sectors, it would be beneficial to keep this momentum going. Joint military exercises, information sharing, and collaboration on counter-terrorism efforts can be prioritized.

Cultural and educational exchanges: Increased cultural exchanges can foster greater understanding between the two peoples, particularly among the youth. India could offer more scholarships for Egyptian students, while Egypt could facilitate deeper understanding of the Arab world for Indian students and scholars.

Cooperation on regional and global issues: As significant players in their respective regions and at the global stage, India and Egypt can seek to align their stances on key issues more closely, whether it be climate change, UN reforms, or regional stability.

Managing third-party relations: Given the interest of other powers like China, the US, and Russia in Egypt, India should strive for a balanced approach that respects Egypt’s relationships with these countries, while clearly articulating its own strategic interests.

Sources: –

Sources: The Hindu (Article 1 and Article 2), The Indian Express (Article 1 and Article 2), Livemint, Daily Pioneer, Economic Times and Hindustan Times