Cairo-Delhi Axis: President Abdel Fattah El-Sisi's visit to India

President Sisi of Egypt will be the Chief Guest on India's 74th Republic Day this year. He will be accompanied by a high-level delegation, including five Ministers and senior officials. This is the first time the President of Egypt has been invited as the Chief Guest on Republic Day. A military contingent from the Egyptian Army will also participate in the Republic Day parade.

India and Egypt are celebrating 75 years of establishment of diplomatic relations this year. The Egyptian President previously visited India in October 2015 to participate in the third India Africa Forum Summit and in September 2016 on a State Visit. Egypt has also been invited as a 'Guest Country' during India's Presidency of G-20 in 2022-23.

The decision to invite President Sisi as the Chief Guest is a significant gesture. It reflects India's initiative to increase its ties with the largest country in the Arab world and one of the world's oldest civilisations. Tracing back, India has had a close and momentous relationship with Egypt. The personal ties of friendship between Prime Minister Nehru and President Nasser have been called legendary, with the duo becoming the most famous personalities of the Non-Aligned Movement (NAM). Looking closer, the two countries were close enough for India to send clandestine arms shipments to Egypt during the Suez Canal crisis in 1956 and contemplate nuclear cooperation and a joint fighter project in the 1960s. Mahatma Gandhi and Rabindranath Tagore are household names in Egypt, and their work has been translated into Arabic. The two countries work closely at multilateral and international platforms. Bilateral trade between India and Egypt achieved a record high of 7.26 billion dollars in 2021-22.

The trade was fairly balanced, with 3.74 billion Indian exports to Egypt and 3.52 billion imports from Egypt to India. More than 50 Indian companies have invested around 3.15 billion dollars in diverse sectors of the Egyptian economy, including chemicals, energy, textile, garment, agri-business, and retail.

Despite such deep cultural and political ties, this relationship has been strained in contemporary times, particularly during President Hosni Mubarak's long innings from 1981 to 2011. Allegedly this stemmed from a minor protocol gaffe over seating arrangements during the New Delhi NAM summit in 1983 and was seen as a personal attack. It took over 25 years to convince Egypt to return to India in November 2008. Both sides promised to compensate for lost time, and former Prime Minister Dr Manmohan Singh visited Egypt for the NAM summit in July 2009. However, by January 2011, the 'Arab Spring' had claimed Mubarak as its most prominent victim. There was a brief hiatus as the country moved towards a new constitution and fresh elections. The late and unlamented Mohammed Morsi, to his credit, did make ties with India a priority during his tumultuous year in office. His visit to Delhi in March 2013 held some hope of a fresh boost, but three months later, he was gone.

President Sisi resumed office in 2014, and Egypt again showed its intent, first through his participation in the India-Africa Forum Summit in Delhi in 2015 and again through a state visit in 2016. Prime Minister Narendra Modi was widely expected to make a return visit in 2020, but plans were disrupted by COVID-19. A visit by him is now well overdue. The Republic Day invitation, meanwhile, will address some of Egypt's angst that its earnest overtures have yet to be reciprocated.

The visiting dignitary will have a bilateral meeting and delegation-level talks with Prime Minister Narendra Modi on bilateral, regional, and global issues of mutual interest. External Affairs Minister Dr S. Jaishankar will call on President Sisi. The visiting dignitary will also interact with the Indian Business community at a business event.

Defence cooperation is one of the themes and high-level exchanges over the last two years that led to Desert Warrior, the first-ever joint tactical exercise by the air force of the two countries, with IAF sending five Mirage 2000 fighters and a refuelling aircraft to El Berigat Airbase in Egypt.

The recent exercise between the special forces indicates the growing willingness to work together. The Egyptians have also shown some interest in India's Tejas fighter jets and Dhruv light attack helicopters, although this is still preliminary. Equally important is their behind-the-scenes support in countering Pakistan's hostile moves at forums like the Organisation of Islamic Cooperation (OIC) and refraining from making any adverse comment during the Nupur Sharma affair.

Both countries also demonstrated mutual goodwill by helping each other at crucial times over the last two years. When the second wave of COVID-19 struck India, Egypt responded by dispatching three planeloads of medical supplies and providing 300,000 doses of Remdesivir in May 2021. India reciprocated a year later when Egypt, the world's largest wheat importer, faced a dire situation following the abrupt halt in wheat shipments from Ukraine. Delhi cleared an initial shipment of 61,500 mt of wheat export on 17 May 2022. The Indian response also paved the way for Egypt to visit India's wheat-growing areas and register India for regular wheat exports.

Bolstered by these tailwinds, bilateral trade grew by almost 75 per cent last year to touch US$ 7 billion, although this is well below the potential, given the size of the two economies. However, Egypt's emerging investment scenario offers a more exciting opportunity. The country's economy is struggling despite the discovery of substantial gas reserves in the Mediterranean basin. Growth in the non-oil sector has been anaemic, foreign exchange reserves have dwindled, and the Egyptian pound has been in free fall, with the International Monetary Fund (IMF) administering a bitter dose of medicine to fix some of the problems. The Gulf countries have also started to tighten their purse strings and are now switching from grants and soft loans to investments in viable public sector assets.

On the surface, the picture looks grim, but it hides three crucial facts.

Firstly, several Indian companies have invested in Egypt, and by and large, they have done well. The largest of these is TCI Sanmar by the Chennai-based Sanmar group. Their US$ 1.5 billion PVC and Caustic Soda plant in Port Said is the largest in the region, and the group is planning to expand the facility further. Another successful example is the Aditya Birla group's carbon black facility in Alexandria. Groups like Asian Paints, Dabur, UFlex Films, Bajaj Auto, and many others set up significant manufacturing facilities.

Secondly, after several abortive starts forced by the gravity of the economic crisis, the Egyptian government is finally getting serious about implementing economic and administrative reforms. Indian companies are positive in their feedback, with some saying quite candidly that after years of apathy, they are finally being heard, and action is being taken to make ease of doing business a reality.

Thirdly, the ambitious plans to develop the Suez Canal Economic Zone into a global manufacturing hub are now gathering critical mass. Gurgaon-based ReNew Power is the first off the blocks from India. It has signed an agreement to set up a Green Hydrogen facility with an annual capacity of 220,000 tons at a staggering investment of US$ 8 billion. It is driven by attractive tax incentives, cheap and abundant land, 365 days of sun to produce the solar energy needed for the electrolyzes, and the strategic location that makes it easy to access the European markets.

The 455 sq. km SCZONE merits a closer look by Indian companies. It sits astride both banks of the Suez Canal, a strategic waterway that connects the Mediterranean with the Red Sea to provide the shortest link between European and Asian markets. The 18,000 ships traverse the canal annually account for 20 per cent of global container trade. In addition to its locational advantage, Egypt has also boosted its attractiveness through a series of free trade agreements that span Africa (ACFTA; AGADIR; COMESA), Europe (EFTA), Latin America (MERCOSUR), and the Arab world (GAFTA). Leveraging these attributes, Egypt is trying to secure investment into several distinct sectors, including bunkering and logistics; castings; solar photovoltaics; petrochemicals, pharmaceuticals and APIs; agribusinesses; building materials; electric batteries, tires, and automobiles; textiles and garments; and, most recently, green hydrogen.

Therefore, a deeper economic engagement with Egypt acquires an additional strategic imperative for India. While Egypt needs to do more to market itself as an investment destination in India, it is also vital for industry bodies like CII, FICCI, and ASSOCHAM to take a more proactive approach. Can South Block lend its support for such an approach by using the visit of President Sisi to pitch for a tract of land in the Ain Sokhna or Port Said sectors of the SCZONE that would form the nucleus of an Indian business cluster on the lines of a Teda Suez? ReNew Power has shown the way, but it will need a joint government-industry initiative to acquire the scale needed to make an impact.

For now, there are clear indications that India under Prime Minister Modi and Egypt under President Sisi may be moving towards achieving the great potential that lies in the greater cooperation of these two emerging economies and great countries.