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Long way to go
Niveen Wahish
Published in
Al-Ahram Weekly
on 08 - 02 - 2001
By Niveen Wahish
Suketo Mehta's family has been selling imported
Indian
-made irrigation pumps in
Egypt
since 1962. In 1996, to get around increasing import costs, they began producing the pumps in
Egypt
. Mehta's company is one of around 30 projects worth some $330 million set up by
Indians
alone or with
Egyptian
partners. In fact, according to
Egypt
's General Authority for Foreign Investment (GAFI),
India
is the 12th largest investor in
Egypt
. Nevertheless, as
Indian
Minister of External Affairs Jaswant Singh put it this week, "The scope for economic cooperation is larger than what we have today."
A partnership agreement between the two countries was expected to boost economic cooperation and joint investments, but since the agreement was initialled two years ago, it remains on the table with no date set for its signature.
Egypt
has traditionally been one of
India
's main trading partners on the African continent.
Indian
exports to
Egypt
-- cotton yarn and fabrics, machinery, transport equipment, pharmaceuticals, chemicals, tea, tobacco, sesame seeds and lentils -- have risen steadily to reach $269 million in 1999, more than double the $128 million recorded in 1994.
Egyptian
exports to
India
are at a similar level, having increased little during the same period. In 1999 they amounted to $235 million, up from $224 million in 1994.
Egypt
's exports are largely limited to raw materials such as petroleum and its by-products, raw cotton, organic and inorganic fertilisers, metal ores and metal scrap.
Sherif Delawar,
Egyptian
businessman and former honorary consul for
India
, explains that
Egypt
's exports to
India
consist primarily of raw materials because the two countries have a similar industrial structure, with
India
's being more developed. As a result, whatever
Egypt
produces may already be found in
India
-- and possibly at a cheaper price. In fact, as Suketo Mehta, chairman of the Kirloskar-
Egypt
Engineering and Diesel Pumps company puts it, "Exporting manufactured goods to
India
would be a futile exercise."
To Delawar, relations with
India
should not revolve around exports alone. "Joint investments are more worthwhile," he says, pointing out that
Egyptian
and
Indian
businessmen working together could provide for the needs of both the
Egyptian
and
Indian
markets, as well as produce exports to other countries. Moreover,
Egyptian
businesses could gain
Indian
technical know-how and expertise by participating in joint-venture projects.
Combining forces to target exportation could be the key to success for
Egyptian
-
Indian
cooperation and the way to encourage
Indian
businessmen to enter the
Egyptian
market. According to Mehta, what would really attract
Indian
investors is seeing the actual implementation of the free trade agreements which
Egypt
has signed with the European Union and the Common Market for East and Southern Africa. Once put into effect, these agreements would make
Egypt
the "springboard into these markets".
Some
Indian
investors have already grasped the opportunity. Ken Agarwal, managing director of
Alexandria
Carbon Black (ACB), believes that even without any free trade agreements
Egypt
is in an excellent geographical location, a factor that is vital for business. "Both the
Egyptian
authorities and the private sector need to market this asset more aggressively," Agarwal says. ACB, an Indo-
Egyptian
joint venture that manufactures carbon black, which is used in the tyre and rubber industries, began production in 1994. Today it exports around 90 per cent of its production to major tyre makers in more than 30 countries.
Other
Egyptian
-
Indian
joint ventures include one producing laminated toothpaste tubes for Procter & Gamble
Egypt
, Dabur
India
manufacturing hair oils and other cosmetic products in 10 Ramadan City and others making auto valves, water-storage tanks, pickups and trucks.
Recommend this page
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