India and Egypt share a large volume of trade, and India has many investments in Egypt. In this context, Daily News Egypt sat down with Sanjay Bhattacharya, India’s ambassador to Egypt. Bhattacharya said that India is anticipating more cooperation with Egypt in several economic aspects. The Egyptian market is promising and has great growth potential, according to Bhattacharya, who assured that India’s confidence in the Egyptian government’s ability to reform the economy encourages Indian investors to expand their existing businesses, as well as bring new investments with a positive outlook to the Egyptian market.
What is the volume of current Indian investments in Egypt and what are the plans to increase them?
We have about 50 Indian companies in Egypt with investments worth more than $3bn. Indian investments that came in over the last few years have continued to expand their presence through expanding the scale of their operations.
The most striking example is our biggest investment in Egypt, which is TCI Sanmar in Port Said. It is a $1.2bn investment project in the chemical sector. The company is about to launch a $280m expansion of its plant to increase the scale, as well as to have new products coming to the market. In 2015, we had three new Indian investments coming in to the Egyptian market in the pharmaceuticals, solar energy, and retail sectors.
This year, we had three new major investments in the automotive, agricultural, and mobile phones sectors.
We are seeing more expansions in the Egyptian market and I know that many more investors who are interested in the market are currently at various stages of negotiations to be present in the market.
Do you have current or potential investments in the new Suez Canal Economic Zone (SCZone)?
We are very optimistic about the prospects of the SCZone, and we are large investors in this area. In fact, two thirds of our investments are located there.
What about cooperation between both countries in the healthcare sector?
There had been some discussions about cooperation in the healthcare sector, including the possibility of managing hospitals, benefiting from technologies that Indians have perfected, and also in the pharmaceuticals sector. So we are anticipating broader cooperation in the overall healthcare sector between India and Egypt.
In addition to Hetero Drugs Limited, which is an Indian company already present in the Egyptian market, we also have Ranbaxy Egypt Limited. Ranbaxy was recently taken over by Sun Pharma, which is another Indian company and one of the largest pharmaceutical companies globally. So with the entry of Sun Pharma into Egypt, we expect a large number of new pharmaceutical formulations to come. We are currently in discussions to speed up the licensing process, and approval of Indian formulations. Of course, our Indian genetic pharmaceuticals tend to be world leaders, so they are extremely beneficial for the Egyptian market.
You have talked about expansions of the automotive sector in Egypt—could you tell us more about the developments of this specific aspect?
There are actually very large amounts of Indian automotive exports to Egypt. It is perhaps the fourth largest item of exports from India to Egypt. India is a major hub for car production globally and occupies the fourth place amongst the largest manufacturing bases for automotives globally. Within the next six years, we will occupy a much higher rank on a global level with our varied automotive production. This includes car, truck, bus, and three-wheeler production and manufacturing. A lot of this is coming to Egypt’s production lines.
How does India plan to cooperate with Egypt in the establishment of the Egyptian space agency?
India has broad experience in the field of space, and we are very excited that a friendly country like Egypt is establishing an independent space agency. We ourselves went through a similar process some years ago, and it led to huge advances in science and technology, and our ability to expand in the space sector.
Today, we are market leaders in the launch of satellites for instance. We are also very advanced in terms of the production of satellites. But I think what is more important are the benefits that these bring to people. When you have advanced communication satellites that are sent into space, you improve the ability to reach out to people in terms of programming and education for example. We ran many remote classes through the satellite network. We also benefited from satellites in weather forecasting, agriculture, and even urban planning.
We are certainly excited about the Egyptian plans for the space agency. We would be happy to share our experience and promote training facilities, look at possibilities for sharing of space data, as well as analysing space-based data so they can provide direct benefits to the people. In India, space data is very easily accessible for the common man. A lot of it can be accessed on your mobile phones and you can make informed decisions based on the data you have received. We hope to see this happen in Egypt as well.
What is the total volume of trade between India and Egypt?
Total trade in 2015 reached $3.6bn, which was a decline compared to the year before. A large part of the decline was due to the decline of petroleum prices. The two governments began considering a plan to diversify the trade basket to include new commodities that can increase the volume of trade.
India is the second largest producer of tea in the world. How are trade relations between Egypt and India benefitting from this?
In March, our tea board launched a mission to Egypt to look at broader aspects of the tea market with the aim of exporting tea to Egypt, looking at the prospects of “India Tea” as a specific brand, and looking at the possibility for joint ventures (JV), where the production, storing, and packaging of tea is a joint process between both countries. These aims were further discussed on 1 November during an interactive session between the Indian Tea Delegation and a group of Egyptian businessmen and officials. There have been a lot of discussions with traders as well as the Egyptian government to seek expansion in the tea exports from India to Egypt.
We have advanced significantly on the possibility of setting up a facility where the storing and packaging of tea can happen in Egypt, so we are looking at that very positively and actively.
Are there any developments in the Egyptian-Indian trade of wheat and rice?
We have a large exportable surplus of wheat. We would invite and welcome Egyptian traders to place orders in India and obtain high quality wheat for a reasonable price.
Regarding rice, India has been exporting rice to Egypt through the private sector over the past period; however, a very significant development took place in the last few months where we had the first government-to-government (G2G) rice transaction offered to Egypt at a friendly price.
This G2G deal is a major breakthrough because it came after several decades, opening up huge potential for Egypt to source a range of agricultural products from India.
The rice stocks from this deal will be available in the Egyptian market very soon.
What is your opinion about the current investment climate in Egypt?
Generally, we have great confidence that the Egyptian market will be a strong base for production and for exports, not only to the domestic market, but also to regional markets, like the Arab or African markets, as well as to Europe.
The Indian corporate sector believes in the long-term prospects of Egypt as an export base and in its strong linkages with Africa, the Arab world, and the European Union. Businessmen in the sector will certainly continue to expand the scale of their investments given their firm belief that Egypt is a very sophisticated market.
Do the current economic issues in the Egyptian economy affect your outlook on the market?
We understand very well that there are certain issues at the moment, especially regarding foreign exchange, but we are certain that the Egyptian government will find solutions to all these issues. We know this because India itself has gone through a similar situation in the past. Today, we are averaging more than a 7.5% growth in GDP. Now we are the fastest growing large economy in the world. We are also the largest recipient of foreign investments globally, surpassing China, so we have very active and strong economic links with Egypt in investments and trade.
What is very important to note about trade between India and Egypt is that the gap in the trade balance is not that discrepant. It is actually very small. Egypt exports very large quantities to India as well. All of this encourages us to look positively at the Egyptian market.
Does this mean you think the government’s efforts to reform the economy are efficient?
We have seen that the government has taken several steps to reform the economy and reform policy as well. There are also new legislative measures that are being introduced in the Egyptian parliament, which means that in addition to what the government is doing, it is very important for business confidence to have a rule of law which is friendly to investors. We can see that the government and the Egyptian parliament are taking several steps in this direction, so India is very optimistic about the outcomes.
Will we be seeing visits of other Indian delegations to Egypt besides the Tea Delegation over the upcoming period?
Yes, we have a very busy schedule with economic and trade delegations’ visits from India. Very soon, we expect a major trade delegation to come from large business houses. The visit is expected to take place either at the end of November or early December. We also have some outgoing delegations, so we’ll be travelling to India soon. We will continue to take part in many of the Egyptian trade fairs and other exhibitions.