The Suez Canal is controlled by Egypt and controls 20 percent of the world’s container trade. (File)
New Delhi:
Egypt’s announcement that it will offer India its own place within the Suez Canal Economic Zone (SCEZ) will be high on the agenda during Prime Minister Narendra Modi’s June 24-25 visit to the country, the first by an Indian prime minister since 1997.
Egypt has positioned its Suez Canal region as a prime investment opportunity for Indian companies.
The Suez Canal is one of the most important strategic bottlenecks in the world, connecting the Mediterranean Sea with the Red Sea and the Indian Ocean. It is controlled by Egypt and controls 20 percent of the world’s container trade.
The Suez Canal is also of great importance for Indian trade. Of the 4.8 million barrels per day of crude oil shipped and transported through the canal, 500,000 barrels per day of crude oil are shipped to India.
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 trade hub by connecting the Red Sea and the Mediterranean through mega-industrial and logistics zones.
It is a 460 km independent emerging international trade center with six seaports strategically located between Africa, the Middle East and Europe.
A delegation led by Suez Canal Economic Zone (SCZONE) Chairman Waleid Gamal Eldien recently held talks on economic engagement between India and Egypt, particularly potential investment opportunities in various areas such as renewable energy, green hydrogen and infrastructure.
During the visit of Egyptian President Abdel Fattah El-Sisi to New Delhi in January, India was offered full support for building a strong industrial presence in SCZONE.
Sisi then told a gathering of Indian business leaders that the Suez Canal region offers promising opportunities for companies looking to capitalize on Egypt’s strategic location.
SCZONE recently signed a framework agreement with Indian company ACME to start construction of a planned green hydrogen project in Sokhna by early 2024.
Development of trade and investment relations
The move comes at a time when India is also considering expanding ties with Egypt, a major player in politics in both the Arab world and Africa.
The Egyptian government said it wants to welcome Indian investment, particularly in green hydrogen production.
Indian private companies have already carried out significant projects in Egypt.
According to SCZONE officials, Indian manufacturers from the power, steel, chemical and agricultural machinery industries have expressed interest in setting up projects in Egypt.
While Indian investments in Egypt totaled US$3.15 billion last year, India could reportedly invest as much as US$700 million in the coming years.
Why is Egypt important?
With a population of almost 110 million and situated between Africa and Asia, the country is one with which India enjoyed an exceptionally close relationship in the first decades after our independence.
Both countries have helped each other at crucial times over the past two years.
Prime Minister Modi has advocated forging closer ties with Egypt, even inviting the country as a special guest to the G20 summit during India’s presidency.
Much of the preparatory work for the Prime Minister’s meeting in Cairo was done through back-to-back visits by Defense Minister Rajnath Singh and Foreign Minister Dr. S. Jaishankar in Cairo last October.
