HE Mr Wael Hamed, Ambassador of Egypt to India, talks about Egypt’s strengths as an investment destination, especially through various regional and bilateral free trade agreements with the USA, European, Arab and African countries. He also shares details of ongoing discussions with India on focus sectors including information technology, pharmaceuticals, education, and tourism.
IBT: India and Egypt are home to two of the world’s oldest civilisations, and have enjoyed a history of close contact and friendly relations since independence. How does Egypt view its diplomatic and cultural relations with India in the present global order?
HE Wael Hamed: This year is very special in the friendly relations between Egypt and India as it marks the 75th anniversary of establishing diplomatic relations between our two countries. Egypt recognized the independence of India on 18 August 1947, just three days after Jawaharlal Nehru delivered the Tryst with Destiny speech proclaiming India’s independence. To commemorate this occasion, we are organizing a number of cultural events throughout this year.
As two great ancient civilizations with geostrategic locations in their respective regions, Egypt and India have long been bound together with historic relations in all political, economic, and cultural fields. Recent years have witnessed a great boost in our bilateral relations after the election of Egypt’s President Abdel Fattah Al-Sisi in May 2014, which coincided with the formation of a new government in India, headed by Prime Minister Narendra Modi.
Our two countries look forward to promoting closer bilateral relations and elevating it to new horizons in the post-pandemic era. The aim of such efforts is to meet the aspirations of our two peoples in achieving socio-economic development, as well as promoting peace and stability in our respective regions in an ever-challenging global environment.
IBT: The past two years have witnessed a major reset in global trade and economy, as well as severe disruptions in supply chains. How has the pandemic impacted the Egyptian economy?
HE Wael Hamed: When the pandemic broke out, we decided not to shut down completely and instead tried to strike a balance between imposing precautionary measures to prevent the spread of the virus and keeping the economy functioning normally to prevent a socio-economic breakdown.
Egypt was one of the few countries to post overall positive rates of growth in 2020 and 2021, thanks to the economic policies adopted by the government during the pandemic as well as the successful implementation of Egypt’s economic reform program that was initiated in 2016.
IBT: What have been the key learnings from the trade volatility in the past 3 years for Egypt, as the country charts its economic and trade roadmap ahead? How are Egyptian companies looking to de-risk their supply chains?
HE Wael Hamed: What we have seen over the past two or three years, is that crises are increasingly international and not local in nature. COVID-19 started in China; just two or three months later, it jumped to the EU, then to the US and back to Asia. So, this is totally an international crisis. It’s the same with environmental problems. Yet at the same time, we have seen an increased trend towards localization of production because every country wants to protect itself as much as possible from the problems. This comes with some positive and negative consequences.
When it comes to certain aspects of production, it is important for countries to be self-sufficient. For example, if Egypt was not self-sufficient in many medical products, it would have faced a severe problem when COVID hit. Similarly, now we are trying to increase our production of wheat for food security, to be more self-reliant.
So, we have seen these two seemingly opposing trends. As a matter of fact, it boils down to the difference between strategic products and consumer products. We can remain open to and sustain globalisation in consumer products, but in some strategic products, we will have to be more self-reliant to protect ourselves from a global crisis. I think India is also doing the same thing when it comes to a strategic sector like defence.
So, the recent global economic challenges – particularly related to the COVID pandemic and the situation in Ukraine – have shown the crucial importance for every developing nation, such as Egypt and India, to diversify its economy to be able to adapt to such external shocks.
The global supply chain crisis has also taught us to give more attention to localization of the production of strategic and non-strategic goods in the different fields of agriculture, industry and health care. Moreover, the global food security crisis has shown the importance of diversifying our wheat imports and increasing local production.
Egypt’s Vision 2030 strategy for sustainable development is focused on long-term strategic planning based on extensive evaluations of previous studies, visions, and strategic plans at the local and international levels. It outlines the country’s roadmap for competitive, balanced and diversified economy that supports innovation and knowledge, social justice, economic development, and the environment.
IBT: How do you see the trajectory of trade relations between India and Egypt over the past decade? Which are the sectors with most untapped potential?
HE Wael Hamed: Bilateral trade between Egypt and India witnessed positive growth rates with every passing year as the trade volume in the financial year 2021-22 recorded US$ 7.26 billion, a significant increase from US$ 4.15 billion in 2020-2021.
The Joint Trade Committee (JTC) and the Joint Business Council (JBC) between Egypt and India are expected to be held this week to explore ways to strengthen our trade, business, and investment ties for the years to come. We are also planning to explore new opportunities for cooperation in different goods and services sectors, such as information technology, pharmaceuticals, education, and tourism.
Tourism accounts for around 12% of Egypt’s annual GDP and tourists from Russia and Ukraine make up around 40% of beach holidaymakers in Egypt. And, with the outbreak of the war, it was put under severe pressure. And when I speak about the tourism sector, it’s not only hotels. It’s restaurants, cab drivers, shopkeepers – a lot of things. So, this is a major problem for us.
Over the past several months, we have been trying to tap into new markets. India is one of them. It is a huge market, with potentially around 40 million outbound tourists. So this is one of the modes in which Egypt and India can come closer. In my view, Indian tourists are very promising and have a distinct approach. When they think about Egypt, the first thing they talk about is Egypt’s unique history, culture, heritage, and these are the most important things that make Egypt unique as a tourist destination.
Conversely, we have noticed over the past, maybe 2-3 years, that there is a sense of curiosity from Egyptian tourists when it comes to India. Earlier, most of the tourists in Egypt used to go to Europe and the US. But now Egyptian tourists, are becoming increasingly interested in other countries that they have not been to, including India.
The second thing is, of course, food security. Egypt is one of the major, if not the biggest importers of wheat with annual imports of 12-13 million tonnes. Now with the Ukraine crisis, the question of food security has become increasingly important. One of the fruitful developments from our perspective is that last April, Egypt approved India as a wheat supplier after a technical delegation visited the country and concluded that India’s wheat meets the essential sanitary and phytosanitary requirements as well as other food quality standards.
We understand and appreciate the background behind the recent wheat export ban by India, as the country wants to ensure that the market is not disrupted when it comes to such vital commodity. But we have also applied for exemptions and we hope that in the very near future, we will have some good news on this. It’s in the interest of both countries because this can lead to a strategic relationship that can extend over years and years.
The third aspect is that Egypt is rich in natural gas. We have reached the level of self-sufficiency and also export liquified natural gas. Egypt is one of the main partners for India and we are supplying at reasonable prices.
In order to facilitate the visits of business and trade delegations and tourism between our two countries, Egypt’s national flight carrier, EGYPTAIR, has resumed last May its direct flights between Cairo and Mumbai. It is also currently negotiating a direct link between Cairo and Delhi. In this context, Egypt has further relaxed visa procedures to attract more businesspeople from India.
IBT: What are the key sectors where Egyptian companies have been successfully investing in India (please cite some examples), and what is their view of the business environment and growth prospects?
HE Wael Hamed: We are fully aware about the Indian Prime Minister H.E. Narendra Modi’s ambitious initiatives Make in India and hence the Egyptian companies also shown interest to invest in India. The Egyptian Investments in India are now represented by three major Egyptian companies:
IBT: What are the major advantages that Egypt offers for investments (as a market and as a gateway to Africa) and what are the focus sectors? What key incentives is the government offering overseas companies?
HE Wael Hamed: The Suez Canal Economic Zone is a well-established location for foreign investors and is very encouraging in terms of location, infrastructure, and logistics. The focus sectors in the SC Zone are pharmaceuticals, agribusiness, logistics, petrochemicals, automotive, and textiles, food processing, and green hydrogen/ammonia etc. Corporate tax, VAT and customs tax incentives are there for investors along with incentives fæor labour-intensive projects using local components and export support programme etc.
Egypt has access to large key markets through various regional and bilateral free trade agreements with the USA, European, Arab and African countries; which secures benefits to Egyptian-based producers supplying these markets. This is a market of 1.3 billion people, if we had a view of Africa, Europe and the Middle East all together, which is equivalent to the size of the Indian market. But on top of that, it encompasses high per-capita income markets like Europe and the Middle East. Egypt is also located on key international logistics routes, particularly the Suez Canal, which is considered to be the shortest link between the east and the west due to its unique geographic location.
For example, Indian companies have the opportunity to establish themselves in Egypt and enjoy the benefits of Egypt’s free trade agreement with the European Union. If the Indian producer comes to Egypt, his product will be able to access the European market duty free, because Egypt already has a free trade agreement with the EU. Moreover, with Egypt, you are basically cutting down the distance between India and Europe into half, thereby cutting down on the costs of fuel, shipments, insurance and time.
IBT: Talking about new-age technologies, like AI, machine learning, green tech, how do you see Egypt’s vision for these areas and prospects of collaboration with Indian companies and the Indian government?
HE Wael Hamed: As a matter of fact, I see both countries not only as potential partners, but also as pioneers. For example, India is one of the leading countries in the world in solar energy. Prime Minister Modi has called for the creation of the International Solar Alliance Initiative – One Sun, One World, One Grid, which is extremely important. Egypt is interested in cooperating with India in this initiative, because we are one of the biggest producers of solar energy in the region. As a matter of fact, we have one of the largest solar parks in the world.
Also, Egypt is one of the major countries attracting investments in green hydrogen energy, where Indian companies are also interested. So definitely, this is a technology for the future to tackle the environmental crisis.
In other aspects as well, there is a huge potential. In information technology, India has experience, but Egypt also has a very good infrastructure, not only in terms of application, but also location. One can see the Suez Canal, not only as a connection between the East and the West in terms of maritime trade, but also in terms of data connectivity. Also, we have a labour force of educated people including software engineers, call centres, etc that are needed for a dynamic information technology sector.
And then there is pharmaceuticals. India is rightly called the ‘world’s pharmacy’ thanks to its advancement in the field of pharmaceutical industry, education and research. It’s also well-known for its indigenous and alternative medicine systems (AYUSH). That’s why, we seek greater cooperation with India to develop research and manufacture of pharmaceutical products. Now we’re thinking about cooperation projects between the Serum Institute of India and the Egyptian Holding Company for Biological Products and Vaccines (VACSERA) that is responsible for the production of vaccines in Egypt. So, there are new areas of higher technology that both countries are coming up with.
We have also shown interest in forming some kind of cooperation between the Egyptian Ministry of Education and the Indian Institute of Technology (IIT) to establish a branch of the IIT in Egypt. Egypt is a country where many African students like to go for education. So basically, if we have an Indian Institute of Technology opening up, it will attract students from Africa and the Middle East apart from Egypt.
HE Wael Hamed is the present Ambassador of Egypt to India
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