Al Alam Al Youm, p.7, (21-8-2006)
After the Chinese, the Indians emerge in the Egyptian market
By: Heba Al Qodsi and Mohammed Gad
As the Chinese cheap products of all kinds overwhelmed the Egyptian markets, India sought to open new markets in Egypt. The Indian products succeeded in establishing a powerful market in Egypt in various sectors. This poses the following important questions: will Egypt be an arena of competition between the Chinese products and the Indian ones? Will the next period witness the emergence of the Indians in the Egyptian market? What are we doing in this regard? Will we continue as a consuming market?
A report by the Economist magazine said the share of India and China together of the world economy will reach US$1 trillion by 2020. The next 15 years will witness the emergence of Asia, specially China and India.
H. E. A. Gopinathan, the Ambassador of India to Egypt, said the Indian investors and manufacturers do not look at Egypt as an arena for competition with the Chinese products. Rather, they seek to promote trading and economic relations with Egypt. As long as the Indian products carrying the label of “made in India” are imported to Egypt according to the requirements stated by Egypt and the conventions concluded between the two countries, there is no problem.
Market situation
Abdel Moneim Seoudi, former Chairman of the Industries Association and an agent for a world car maker, said India managed to open a car market in Egypt by exporting cars affordable to people with low income. He considers India “the next giant” in the engineering industries in general.
Mohammed Rushdi, an importer, pointed out that the Indian products in the fields of manual tools and mechanical engineering have become of high quality, although they are more expensive than those of China. China offers products of various levels of quality and prices, while India is keen on offering high-quality products regardless of the price. He added that Indians have expanded their existence in the engineering industries market through their marketing style which is different from the Chinese marketing style. The Indian investors are keen on personally visiting importers or sending them representatives with samples of the product. They also invite importers to visit India at their own expenses. The Chinese marketing style depends on promoting products through exhibitions.
Ihab Faltas, a manufacturer of paint chemicals, said India excelled recently in the industry of the “basic colours” of paints, through exporting products of European quality but 30% lower in costs. Sharif Al Gabali, Chairman of the Chemical Industries Chamber, said India established itself in the Egyptian markets in the paints and dying industries offering products of competitive prices comparing to the local products.
Strong competitor
Ahmed Abu Gabal, Head of the Stationery Supplies Department of Cairo Trading Chamber, said India controlled a considerable share of the “standard” paper market in Egypt. Although it is not very high in quality, paper is imported from India at costs lower by 10% than the local product. Photocopying paper is also imported from India at lower costs. India, he said, do not compete with China in this field as China concentrates on stationery supplies. The Indian investors have offices in Egypt for marketing the Indian products in a regular way unlike the Chinese exporters who depend on promoting their products individually.
India is a strong competitor as an exporter of yarns to the Egyptian market. Khaled Raafat, Chairman of the Readymade Clothes Exporters Association, said India controls 30% - 40% of the Egyptian market in the field of medium- and short-staple yarns. It competes with big countries in this field such as Turkey, Indonesia and Malaysia. India imports from Egypt long-staple raw cotton.
In the field of pharmaceuticals, Ahmed Al Hakim, Head of the Pharmaceutical Policy Department at Pfizer, said India has 25,000 drug factories. These factories would think of exporting their products to Egypt in the future, especially as Egypt has become committed to protecting intellectual property rights. He pointed out that India has succeeded in making innovations and attracting foreign investments in the drug industry. Making successes with R&D in the drug industry, India joined the countries exporting drugs to the US and Europe.
No competition
Economist Dr. Sharif Dollar thinks it is hard for India to compete with China in the Egyptian or world markets in the industrial sector in general since India does not have an industrial base as large as that of China. Also, the Indian government does not control its economy as China does with its own in order to offer very competitive products to the world markets. According to him, it is not probable for India to become an industrial giant and invade the world markets, especially as India focuses on investing in IT services.
Comparisons
Dr. Salah Al Hagar, AUC professor, stated that the industrial boom in India depends mainly on establishing technology institutes where human cadres are trained to create technology, which made India offer products of high quality and competitive prices. Indian engines, for example, are cheaper than the German ones and more expensive than those of China. Yet, they are of a medium quality. China, Al Hagar added, depends on reverse engineering in manufacturing. This enabled China to export imitated products to world markets at lower prices. He pointed out that Egypt is a consuming country although it has begun establishing technology institutes at about the same time as India. But, these institutes were run in an autocratic manner, unlike the Indian ones.
Pressures on raw materials
Abdel Rahman Abdel Raouf, commercial counsellor, indicated that India is interested in high value-added industries. Although the balance of trade is in favour of the Egyptian side, most of the Egyptian exports to India are raw materials while the majority of the Egyptian imports from India come as manufactured products. Notably, we export to India raw materials that the Indian market needs in the manufactured form. For example, we export to India phosphate which India uses in the industry of fertilizers. In addition, our raw material exports face pressures in India as represented in the duties imposed to protect the local production. To face the overwhelming inflow of the Indian products to the Egyptian markets, he said, the best way is to attract Indian investments to manufacture and sell the imported products locally.
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