Bridging Border: Egypt and India Reshaping Economic Future

Updated 3/25/2025 8:00:00 AM

Egypt and India have cultivated robust economic ties for many years, yet significant opportunities remain to be explored. Forming new partnerships marks a strategic milestone in their evolving relationship, characterized by remarkable growth in trade and investment.

As both nations navigate shifting economic landscapes, the potential for job creation and export expansion is considerable. Ongoing collaboration in information and communication technology (ICT) and renewable energy is poised to redefine the economic futures of Egypt and India, unlocking new avenues for mutual benefit and prosperity.

Egypt-India Economic Boom

In 2024, Egypt imported $3.259 billion worth of goods from India, while exports to India were valued at $517.445 million, according to the Central Agency for Public Mobilization and Statistics’ (CAPMAS) Foreign Trade Data Bulletin for February 2025.

To strengthen economic ties and attract investments, Egypt's Minister of Investment and Foreign Trade Hassan El-Khatib visited India in March 2025. During his visit, El-Khatib held high-level meetings with Indian officials, including Minister of Commerce and Industry Piyush Goyal, along with industry leaders.

The meeting with Goyal addressed expanding trade between Egypt and India, with a target of $12 billion in five years, nearly tripling the $4.2 billion recorded in 2024.

In this regard, Ahmed Ghaly, a trade economist, comments: “This ambitious goal requires a combination of policy measures, strategic investments, and enhanced private-sector cooperation between both countries.”

Ghaly explains, “To boost trade exchange, Egypt and India are expected to focus on reducing trade barriers, improving logistics infrastructure, and facilitating smoother customs procedures. The expansion of direct shipping routes and trade financing mechanisms will play a crucial role in increasing efficiency and reducing costs for businesses on both sides.”

Discussions also focused on renewable energy, chemicals, automotive manufacturing, pharmaceuticals, and ICT as priority investment sectors. The Egyptian-Indian Business Council aims to increase Indian investments in Egypt to $5 billion by 2027, reflecting a bold vision for mutual economic growth.

One of the notable agreements signed during El-Khatib’s visit is an $8 billion green hydrogen plant in the Suez Canal Economic Zone (SCZONE). Led by India's ReNew Power and Egypt's Elsewedy Electric, this project is set to produce 20,000 tons of green hydrogen annually by 2026, with plans to scale up production to 200,000 tons per year. This initiative positions Egypt as a regional leader in renewable energy and contributes to global decarbonization efforts.

Moreover, the Egyptian-Indian Business Council has launched an ambitious investment initiative, targeting $5 billion by 2027. This includes projects in renewable energy, ICT, and industrial manufacturing zones. Indian companies are expected to invest heavily in Egypt’s economy, further diversifying the bilateral relationship.

Commenting on this initiative, Salma Chalabi, an economics specialist and a PhD student, tells Arab Finance: “The initiative is set to significantly reshape bilateral trade and investment dynamics. This effort expands beyond traditional sectors like chemicals and tourism into high-growth areas such as renewable energy, green hydrogen, and IT.”

Coupled with Egypt’s efforts to streamline investment processes and address regulatory hurdles, Chalabi sees this diversification as a driver to bring bilateral trade closer to the $12 billion target by 2028. She also highlights that renewable energy and green hydrogen will be key focus areas.

Economic Impact of Indian Investments in Egypt

A key element fueling India’s increasing investment in Egypt is the establishment of dedicated industrial zones. Ghaly notes, “These zones offer an attractive business environment for Indian manufacturers by providing incentives such as tax breaks, reduced bureaucratic hurdles, and access to Egypt’s strategic location as a gateway to Africa, Europe, and the Middle East.”

“By setting up manufacturing bases in these zones, Indian companies can not only tap into the Egyptian market but also leverage Egypt’s free trade agreements with Africa and the European Union (EU) to access a wider consumer base,” Ghaly adds.

Ghaly points out, “As Egypt and India continue to expand their economic cooperation, one of the most direct benefits for Egypt will be job creation. Indian investments in manufacturing, IT, agriculture, and pharmaceuticals will generate employment opportunities for Egyptians at various skill levels.”

Additionally, collaborations in ICT will drive Egypt’s digital transformation agenda, improving connectivity and fostering innovation. Chalabi stresses, “Recent partnerships in cybersecurity and IT are advancing Egypt’s economic modernization, supporting the Digital Egypt strategy that focuses on expanding 5G networks and satellite projects to boost connectivity and attract technology investments in areas like e-government and fintech.”

“Egypt’s cybersecurity sector is expected to grow by 12.39% annually, reaching $444 million by 2030. Collaborations with Indian companies like Trend Micro, which successfully blocked 73 million threats in Egypt in 2023, contribute to this growth. This achievement included the prevention of 18 million email threats, 2 million malicious URL attacks, and 8 million malware attacks. These efforts showcase the company’s advanced threat detection and response capabilities in safeguarding Egypt’s digital infrastructure, including energy grids and financial systems,” according to Chalabi.

Moreover, the recent economic developments between the two countries are expected to have a positive impact on Egyptian exports. Chalabi highlights, “Recent initiatives to deepen ties between Egypt and India are poised to significantly boost Egypt’s export potential by expanding trade opportunities and harnessing Indian expertise.”

“Egypt’s position as a regional energy hub, combined with India’s demand for liquefied natural gas (LNG) and green hydrogen, creates new export opportunities. The $40 billion in green energy projects in the SCZONE reinforces this collaboration. Streamlined investment processes and regular bilateral trade forums are also driving Egypt’s export growth and diversifying its trade landscape,” Chalabi emphasizes.

With ambitious trade targets and substantial investments across various sectors, Egypt and India are poised to reap substantial benefits. Their shared commitment to increasing bilateral trade, alongside initiatives in renewable energy and ICT, underscores the strategic vision driving this partnership.

By Sarah Samir