Al Akhbar, p.14, (21/4/2008)

 

The Indian investment pours to Egypt and the Egyptian exports flood the Indian market

 

By: Mohammad El Hawari

 

India is another emerging economy where the middle class supports the government. India is maintaining a growth rate of 9%. The large number of population does not represent any impediment to this growth. India together with Brazil, South Africa, and Russia formed an economic group to be able to compete with the G8.

 

Engineer Rashid Mohammad Rashid paid a visit to India heading a 40-member delegation to explore the Indian market and form partnerships with Indian businessmen. Indians still remember the historical ties between the two countries.

 

Increase of investments 

 

The objective of the visit, as stated by Engineer Rashid, was to increase the volume of trade between the two countries, boost bilateral investments, enhance Indian investments in Egypt and have technical cooperation in the production and administrative fields. One of the customs barriers in India is the 30% to 35% customs duties imposed on imports while such duties do not exceed 6.9% in Egypt. There are 300 commodities covered by these high duties in India.

 

The visit followed the African-Indian summit and Indians believe that Egypt is their gate to Africa. Engineer Rashid says that Indians have the desire to establish major industrial projects in Egypt in the fields of petrochemicals, iron and steel, fertilizers and infrastructure. An initial agreement was made for establishing an Indian industrial zone. Probably it will be in the 10th of Ramadan City on an area of two million square meters. India is considered one of the largest consumers of fertilizers so it intends to establish fertilizers projects in Egypt. We have also strong ties in the field of information technology and there is a joint commission with the Ministry of Telecommunications.

 

The visit made by Engineer Rashid which he started since his arrival to New Delhi during which he met with the most senior ministers in the Indian government such as the Minister of Finance, the Minister of Trade and Industry, the Minister of Mineral, Chemical and Fertilizers Industries. He also attended the business workshop held in New Delhi and Egypt-Indian seminar held in Mumbai. He also met with several CEOs of major companies.

 

The meetings resulted in a new phase in the economic and commercial ties between the two countries. The Egyptian Minister held talks with the Indian Minister of Finance regarding the possibility of signing an agreement for avoidance of double taxation to help the flow of investments between the two countries and to encourage Indian financial institutions to have their presence in Egypt.

 

During the Egyptian Indian symposium, the Indian businessmen expressed their desire to invest in different fields in Egypt. The symposium comprised CEOs of major Indian industrial, commercial, and banking institutions. During the meeting, Minister Rashid reviewed the growth rate in Egypt that reached 7% during the past two years and the targeted increase of this rate. He also referred to Egypt's attraction of foreign investments that reached $ 11 billion last year. It is predicted that this figure will increase to $ 15 billion during the current year.

 

The customs problem

 

Abdel Rahman Fawzi, Chairman of the Agreement Department at the ministry of Trade said that India is using protective policies in its customs. It set 10% customs duties on Egyptian carpets so that duties levied on carpets are not less than $ 1.75 per each meter. This led to the reduction of Egyptian carpet exports to India.

 

The same case applied to marble. India is also one of the countries that strictly adheres to the anti dumping controls. The problem of customs duties is being discussed for solving it.  He added that the discussions of businessmen on establishing joint ventures in different fields will benefit Egypt; as for India, it will benefit from the exporting benefits Egypt has because of the agreements it concluded with third parties.

 

He indicated that Eng. Rashid Mohammed Rashid and the Indian Minister of Commerce have signed a protocol to enhance commercial and economic relations between the two countries. They have also agreed to enhance industrial development, encourage technological innovation and transfer of new technologies. The two sides also agreed to create an appropriate atmosphere for investments and offer preferential treatment, such as the establishment of free trade zone, removing all barriers and obstacles facing trade exchange and setting up effective mechanisms to further facilitate trade between the two sides. The Egyptian and Indian sides also agreed to activate the Egyptian-Indian Business Council, organize trade fairs, exchange visits of delegation for promoting industrial cooperation and human resources development and training, and coordinate the stances of the two countries at the WTO negotiations, especially the ongoing Doha Round.

 

Adham Nadim, the CEO of the Industrial Modernization Center says that the MOU signed by the two ministers regarding providing the Egyptian industry with Indian experts for helping the center to achieve its goals. It is predicted that the Egyptian companies will require more than a thousand Indian experts annually to train the Egyptian labor and transfer technology in the fields of agriculture, textiles, furniture, shipping, engineering industries, services, project management and pharmaceuticals.

 

Special industrialized zones

 

Engineer Amr Asal, Chairman of the Industrial Development Authority said that the special industrial zones boost the industrial development. This can be easily felt in countries like Vietnam that has about 153 special industrial zones. Currently, we have approved establishing 6 special industrial zones; during the second phase 19 special industrial zones will be established including a Turkish, Qatari, Jordanian, Saudi and Chinese zones in addition to the Indian zone which will be dedicated for car components, pharmaceuticals, and food industries. Such industries require lots of labor and the law stipulates that only 10% of labor could be foreign labor. The agreement of establishing this zone will be signed during the coming two months. Currently we have 29 Indian factories and there are proposals for establishing new 12 factories with investments amounting to $ 3 billion.

 

Mamdouh Mostafa, Chairman of the Commercial Representation  Office, confirmed that the Indian Minister stressed the keenness of the Indian government on boosting ties with Egypt due to the active role it is playing in the region. He lauded the good indicators of the Egyptian economy which are closely monitored in India.

 

Promotion of Relations

 

Eng. Rashid Mohammed Rashid expects that the Egyptian-Indian cooperation would witness a remarkable progress in the coming period in the fields of commerce, trade, transportation, agriculture, healthcare and tourism. In fact, we want to increase tourist arrivals from India from 100.000 to 500.000. Rashid indicated that reports expect that tourist arrivals from India and China to the world countries would increase in the coming few years to 50 million and 100 million respectively. He said that Egypt, if got 10% of these figures, will attract 16 million tourists.

 

Ambassador of Egypt in New Delhi Dr. Mohammed Hegazi said that we are heading on the right path to enhance the Egyptian-Indian relations. He added that the visit of Eng. Rashid Mohammed Rashid would further strengthen cooperation between the two countries.

 

Ambassador Nabila Salama, Egypt's Consul General in Mumbai referred to the necessity to increase exchange of bilateral visits between the officials and businessmen of the two countries in order to cement economic and commercial relations between the two sides.

 

The head of the Egyptian media office in New Delhi Mr. Raafat Youssef confirmed that the increase of media cooperation between the two countries would push forward bilateral relations in other domains, such as investments, tourism and trade. He highlighted that the Indian people is highly regarding Egypt and Egyptians and raises high the historical relations between the two countries.

 

This tour to India was not an exploratory visit, as it has several positive results, which will pop up in the coming short period at different levels, such as bilateral exports and Indian investments (experts expect them to touch of US$ 23 billion). The efforts exerted by the Egyptian Embassy, Consulate in Mumbai and the Egyptian Commercial Counselor Mr. Mohammed Abdullah as well as the desire of businessmen contributed to the success of this visit and its positive results. This visit was timely conducted so that we can catch up with the procession of progress in India. I am very happy that we have taken this step in order to restore our distinguished relations with India like what we have done recently with Russia.

 

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