The MED This Week newsletter provides expert analysis and informed insights on the most significant developments in the MENA region, bringing together unique opinions and reliable foresight on future scenarios. Today we shed light on the latest chapter in the Egypt-India relationship, as both countries seek to strengthen bilateral ties on the occasion of Indian Premier Modi’s visit to Cairo.
On June 25, Indian Prime Minister Narendra Modi left Cairo after a historic state visit to Egypt. This two-day stop in the North African country is the first by an Indian prime minister in over two decades, and took place amid new efforts to revive relations between the two nations. In Cairo, Modi and Egyptian President Abdel Fattah al-Sisi signed a strategic partnership agreement, underlining the growing ties between the two countries and marking the visit with geopolitical and economic importance. From Delhi’s perspective, Egypt’s geostrategic location – as a link between Africa, West Asia, and the Mediterranean – makes it an essential partner if India wants to strengthen its presence in these regions. Similarly, enhancing trade relations with India is particularly important for Egypt, the most populous country in the Arab world, currently troubled by an economic downturn. Today, India is Egypt’s seventh-largest trading partner and the fourth major importer of Egyptian goods. On Sunday, the two sides agreed to set the ambitious target of increasing bilateral trade to USD 12 billion per year over the next five years. Furthermore, Cairo sees significant geostrategic potential with Delhi, especially in its quest for enhancing South-to-South relations. After gaining status of Dialogue partner within the SCO, Egypt is among the numerous Arab states that have not hidden their desire to join the BRICS bloc, making India an ideal partner for achieving this goal. In the meantime, al-Sisi will attend the upcoming G20 Summit – to be hosted in New Delhi in September – as a guest of honour.
Experts from the ISPI network react to Modi’s visit to Cairo and its outcomes on the India-Egypt strategic partnership.
+The rationale between a win-win partnership
“Egypt-India relations are exceptional in many aspects. Both maintained long-lasting direct bilateral ties as colonies of the British Crown. Soon after gaining independence, they also worked closely as founding members of the Non-alignment Movement in the mid-1950s. Modi’s recent visit builds on this historical basis in this framework to develop what they now plan as a ‘Strategic Partnership’. The moment is suitable for such a consolidation. Given the Russia-Ukraine war, Egypt will need more wheat from India. Furthermore, the emphasis is also increasingly on collaboration in technological innovations. But pure political calculation is not absent. Egypt is interested in consolidating relations with the world’s most populated country. For India, whose present government is accused of persecuting Muslims, Delhi is interested in maintaining close ties with a principal and influential Muslim country. So it is a win-win. Additionally, as head of G20, Modi has invited al-Sisi as a special guest at the Group’s next summit.”
Bahgat Korany, FRSC Professor, Department of Political Science, American University in Cairo
Global South calling: India and Egypt in a changing world
In a rapidly changing global scenario where concepts such as multipolarism, multi-alignment and Global South have become the “geopolitical lens” through which a large number of countries look at the future of international affairs, the timing and scope of Prime minister Narendra Modi’s visit to Cairo is not without interest. Modi arrived from the United States, where he addressed the Congress and held talks with President Biden. Washington rolled out the red carpet for the once-banned Indian Prime minister who is now courted by Western countries hoping to consolidate their partnership with a key Asian ally amidst US-China tensions, global value chain disruptions and the hope to isolate warring Russia. We should remember that New Delhi and Cairo (and Moscow) have not only played a leading role the Non-Aligned Movement decades ago: today, both countries are entering a world where their worldviews are starting to align again, driven by the need to secure their national interests in a war-torn global order, and the need to build new safe spaces amidst rising US-China tensions. No wonder that Modi’s stopover on his way back to India happened precisely in a region (“West Asia”, as India calls it) where the US is losing ground, and in a country that aspires to play a key role in the Global South.”
Nicola Missaglia, ISPI India Desk
Cairo needs to increase (and balance) economic ties with India
“The deepening of ties between Egypt and India could bring some strategic and economic benefits in terms of investments and job creation. However, if the trade balance between the two countries persists, it will only deepen one of Egypt’s critical economic challenges, its current account deficit. For the past several years, Egypt has run a persistent and sizable current account deficit which the government has offset with unsustainable external borrowing. Egypt currently imports more than double what it exports to India. Doubling the trade volume, as planned, without changing the trade balance will increase pressure on the current account. Over the past decade, Egypt’s leaders have focused investments incoherently in nontradables at a time when Egypt needs to expand its exports or at least increase import substitution. The Egyptian government’s investment strategy of covering the country in concrete does neither.”
Timothy Kaldas, Deputy Director, The Tahrir Institute for Middle East Policy
Egypt wants to be the BRICS’ new African node
“The diverse geopolitics, economics, and geographical distance among BRICS countries have diminished the need for a unified cooperation framework, emphasizing the importance of strengthening bilateral relationships to achieve effective economic objectives. Transforming the group into a counterbalance to the G7 is geopolitically and economically unrealistic, as all members, except Russia, maintain crucial links with the West, including China. Egypt acknowledges this reality, but Cairo seeks global platforms to address financial challenges while seeking to surpass Nigeria and become Africa’s largest economy, solidifying its position in the emerging multipolar order. India and Egypt have substantial potential for trade and investment cooperation. India’s IT, pharmaceuticals, agriculture, and renewable energy expertise align closely with Egypt’s economic goals. Egypt’s strategic location provides access to Middle Eastern, European, and African markets, positioning it as an ideal trade partner for India.”
Mohammed Soliman, Director, Strategic Technologies and Cyber Security Program, MEI