Egypt-India Economic Ties Eyeing US$12 Billion Trade Target & Investment

Egypt and India are strengthening trade and investment ties, aiming to increase bilateral trade from US$4.2 billion in 2024 to US$12 billion in five years, with key sectors including renewable energy, pharmaceuticals, and infrastructure. However, challenges such as regulatory hurdles and logistical inefficiencies must be addressed to unlock the partnership’s full potential.

By Sudhanshu Singh

Egypt and India have shared a long-standing economic partnership, with bilateral trade experiencing steady growth in recent years. Both countries have identified and cooperated on major areas of trade, leveraging their strategic locations, economic reforms, and favorable trade policies.

In March 2025, Egypt’s Investment and Foreign Trade Minister, Hassan El-Khatib, visited India to strengthen economic ties and attract more Indian investments. During his visit, he met with India’s Commerce and Industry Minister, Piyush Goyal, discussing potential collaborations in renewable energy, chemicals, IT, automobile manufacturing, and pharmaceuticals. Both the leaders expressed their aspiration to increase bilateral trade from US$4.2 billion in 2024 to US$12 billion over the next five years.

This article provides an analysis of Egypt-India trade relations, covering trade volumes, investment regulations, legal frameworks, and prospects.

Also Read:

• Egypt’s Tax Reforms: Boosting Business Confidence and Export Growth

Bilateral trade overview

India is one of Egypt’s most important trading partners in Africa, with trade between the two nations increasing significantly over the past decade. The India-Egypt Bilateral Trade Agreement, which has been in operation since 1978, has facilitated this growth. Bilateral trade between the two countries touched a high of US$7.26 billion in FY 2021-22, a 75 percent increase compared to FY 2020-21. However, trade volume declined to US$6.06 billion in FY 2022-23 and further dropped to US$4.6 billion between April 2023 and February 2024. This decline is largely attributed to Egypt’s economic difficulties, as well as external disruptions like the Israel-Hamas conflict and Houthi threats affecting Suez Canal traffic.

Despite these challenges, India remains an important trading partner for Egypt, ranking as the 6th largest partner in FY 2021-22. Mechanisms such as the ‘Joint Trade Committee’ (JTC), ‘Joint Business Council’ (JBC), and ‘Joint Working Groups’ facilitate trade relations, with ongoing efforts to address non-tariff barriers, such as India’s accreditation for wheat exports to Egypt. 

Investment landscape

Indian investments in Egypt have expanded across various sectors, contributing significantly to the country’s economy. Currently, over 55 Indian companies have invested more than US$ 4 billion in Egypt, providing direct and indirect employment to approximately 38,000 Egyptians. In 2023-24, Indian companies invested an additional US$175 million, with major contributions from Flex P Films (US$ 110 million in chemicals), EKC Cylinders (US$33 million in industrial cylinders), and Abdos Life Sciences (US$ 22 million in FMCG manufacturing).

Egypt’s Suez Canal Economic Zone (SCZone) has emerged as a lucrative destination for Indian investments, with firms like Indorama planning a US$ 600 million greenfield fertilizer plant. The renewable energy sector is another promising avenue, with Indian companies ReNew, ACME, and OCIOR signing MoUs worth US$ 18 billion to establish green hydrogen plants in Egypt.

The SCZone, spanning 461 sq. km with six ports and four industrial clusters, serves as a linchpin for bilateral collaboration. Indian firms like Sterlite Power are proposing a US$5–6 billion electricity grid to support green hydrogen projects, aligning with Egypt’s ambition to produce 200,000 tons annually by 2026.

Meanwhile, Egypt’s bid to join the India-Middle East-Europe Economic Corridor (IMEE) aims to integrate its Red Sea-Mediterranean Road networks with global trade routes, mitigating Suez Canal congestion risks.

While Indian investments in Egypt have been substantial, Egyptian investments in India remain relatively modest, totaling around US$37 million. Major Egyptian players investing in India include ElSewedy Group (smart electrometers), KAPCI Coatings (car paints), and Modern Waterproofing Group (construction materials). With India’s fast-growing economy, there is potential for Egyptian firms to explore further opportunities, particularly in IT, manufacturing, and energy.

Trade commodities between Egypt and India

The trade relationship between Egypt and India is characterized by distinct commodity profiles, reflecting complementary strengths and structural asymmetries. Both nations strategically move their key commodities, sometimes reinforcing each other’s strengths and, at other times, competing in the same arena. Cotton, for instance, Egypt’s long-staple cotton, famous for its superior quality, finds its way to India, while India, a global textile powerhouse, sends back its short-staple cotton. Similarly, mineral fuels remain a dominant force in their trade exchanges, but recent fluctuations suggest an evolving energy landscape. As Egypt works to establish itself as a regional energy hub and India accelerates its renewable energy ambitions, the two could move beyond fossil fuels and collaborate on solar, wind, and green hydrogen projects for a more sustainable future.

There’s potential for both nations to carve out specialized niches: India’s expertise in pharmaceuticals and specialty chemicals could integrate with Egypt’s strategic access to African and European markets. The same can be said for steel, where India’s exports have faced headwinds as Egypt boosts domestic production and American tariffs affect trade dynamics. Instead of competing outright, Indian companies could tap into Egypt’s booming infrastructure sector, providing machinery, technology, and investments to fuel its construction boom.

Trade agreements and legal framework

To facilitate trade and investment, both nations have signed several agreements which include:

• Double Taxation Avoidance Agreement (DTAA): DTAA prevents double taxation for businesses operating in both countries;
• Bilateral Investment Treaty (BIT): BIT is crucial in ensuring investor protection and quick dispute resolution; and
• Preferential Trade Agreements (PTAs): PTAs offer both nations access to each other’s market with reduced tariffs on select goods.

Egypt’s regulatory framework also provides incentives for foreign investors. Investment Law No. 72 of 2017 offers tax exemptions and duty reductions, while the Special Economic Zones Law No. 83 of 2002 establishes investor-friendly policies in designated zones.

Opportunities for business expansion in Egypt and India

Several sectors offer significant growth potential for India-Egypt economic collaboration:

1. Renewable energy: Egypt’s ambitious renewable energy targets present opportunities for Indian companies in solar and wind energy projects.
2. Pharmaceuticals: India’s strong pharmaceutical industry can contribute to Egypt’s growing demand for affordable medicines.
3. Infrastructure and construction: India’s expertise in infrastructure development can support Egypt’s mega projects.
4. IT and digital economy: Egypt’s digital transformation initiatives create potential for Indian IT firms.

Challenges and barriers for business expansion

Despite robust trade ties and a shared commitment to achieving the US$12 billion bilateral trade target, several structural and operational challenges continue to temper the full potential of Egypt-India economic collaboration. Persistent tariff and non-tariff barriers, including complex customs procedures and inconsistent application of trade policies, occasionally hinder the competitiveness of goods and services.

Bureaucratic delays in approvals, licensing, and certification processes further compound these hurdles, raising transaction costs for businesses. Regulatory complexities, such as evolving compliance requirements and discrepancies in local investment laws, demand meticulous due diligence from investors, particularly in sectors like renewable energy and pharmaceuticals where project timelines are sensitive to delays.

To add to this, logistical bottlenecks, spanning underdeveloped maritime routes, limited direct air connectivity, and inefficiencies in port handling, inflating transportation costs and transit times. Addressing these challenges through streamlined trade agreements, harmonized regulations, and infrastructure upgrades will be critical to unlocking seamless cross-border commerce and sustaining the momentum of this strategic partnership.

Final thoughts

Egypt-India trade relations continue to strengthen, driven by complementary economic interests and strategic cooperation. While opportunities for expansion are vast, businesses must navigate regulatory frameworks and market conditions carefully. With proactive policy measures and investment-friendly initiatives, the bilateral partnership is set to thrive in the coming years.

• Previous Article UAE-US Economic Relations: Trade, Investment, and Strategic Cooperation
• Next Article Saudi Arabia Introduces New Ultimate Beneficial Ownership Rules