New Delhi:
Egypt’s announcement that it will offer a special slot for India within the Suez Canal Economic Zone (SCEZ) will be high on the agenda during Prime Minister Narendra Modi’s visit to the country from June 24-25, the first by an Indian prime minister since 1997.
Egypt is positioning its Suez Canal region as a key investment prospect for Indian companies.
One of the most important strategic bottlenecks in the world connecting the Mediterranean to the Red Sea and the Indian Ocean, the Suez Canal is controlled by Egypt and controls 20 percent of the global container trade.
The Suez Canal is also very important for Indian trade. Out of a total of 4.8 million barrels of crude oil shipped and transported through the canal per day, 500,000 barrels of crude oil are shipped to India per day.
The development axis of the Suez Canal region, SCZONE, includes a number of industrial and logistics zones.
The SCZONE is part of Egypt’s plan to transform the country into a global logistics and commercial center by connecting the Red Sea and the Mediterranean through mega-industrial and logistics zones.
It is a 460 km independent emerging international commercial center with six seaports strategically located between Africa, the Middle East and Europe.
A delegation led by the President of the Suez Canal Economic Zone (SCZONE) Walid Gamal Eldien recently held discussions on the economic engagement between India and Egypt, in particular potential investment opportunities in various areas such as renewable energy, green hydrogen and infrastructure.
During Egyptian President Abdel Fattah El-Sisi’s visit to New Delhi in January, India received full support for establishing a strong industrial presence in the SCZONE.
Sisi had then told a gathering of leading Indian businessmen that the Suez Canal region offers promising opportunities for companies seeking to take advantage of Egypt’s strategic location.
SCZONE recently signed a framework agreement with Indian company ACME to begin construction of a planned green hydrogen project in Sokhna in early 2024.
Increasing trade and investment ties
The move comes as India is also considering strengthening ties with Egypt, a major player in the politics of both the Arab world and Africa.
The Egyptian government said it would welcome Indian investments, particularly in green hydrogen production.
Indian private sector companies have already implemented important projects in Egypt.
According to SCZONE officials, Indian manufacturers from the energy, steel, chemical and agricultural equipment industries have expressed interest in setting up projects in Egypt.
While Indian investment in Egypt was $3.15 billion last year, India could invest up to $700 million in the coming years, according to reports.
Why is Egypt important?
With a population of nearly 110 million and a location that spans Africa and Asia, it is a country with which India had an exceptionally close relationship in the first few decades after our independence.
Both countries have helped each other at crucial moments over the past two years.
PM Modi has worked to build stronger ties with Egypt and even invited the country as a special guest to the G20 summit during the Indian presidency.
Much of the groundwork for the Prime Minister’s meeting in Cairo was done through successive visits to Cairo by Defense Minister Rajnath Singh and Foreign Minister Dr. S. Jaishankar in October last year.