The Suez Canal is controlled by Egypt, and commands 20 percent of global container trade. (file)
New Delhi:
The announcement by Egypt that it will offer a dedicated slot for India within the Suez Canal Economic Zone (SCEZ) is set to figure high on the agenda during Prime Minister Narendra Modi’s visit to the country from June 24-25, which will be the first by an Indian PM since 1997.
Egypt has been positioning its Suez Canal region as a prime investment prospect for Indian businesses.
One of the major strategic choke points in the world connecting the Mediterranean Sea with the Red Sea and the Indian Ocean, the Suez Canal is controlled by Egypt, and commands 20 percent of global container trade.
The Suez Canal holds significant importance for Indian trade too. Out of the total 4.8 million barrels per day of crude oil shipped and transported through the canal, 500,000 barrels per day of crude is shipped to India.
The development axis of the Suez Canal region, SCZONE, includes a number of industrial and logistical zones.
The SCZONE is part of Egypt’s plan to transform the country into a global logistical and commercial centre by linking the Red and Mediterranean seas through mega industrial and logistical zones.
It is a 460-kilometre independent, emerging international commercial hub with six maritime ports strategically located between Africa, Middle East and Europe.
A delegation led by the Chairman of the Suez Canal Economic Zone (SCZONE) Waleid Gamal Eldien recently held discussions on India-Egypt economic engagement, especially potential investment opportunities in diverse areas like renewable energy, green hydrogen, and infrastructure.
India was offered full support for establishing a strong industrial presence in the SCZONE during the Egyptian President Abdel Fattah El-Sisi’s visit to New Delhi in January.
Sisi had then told a gathering of leading Indian businessmen that the Suez Canal region provides promising opportunities for companies wishing to benefit from Egypt’s strategic location.
SCZONE signed a framework agreement with Indian company ACME recently to start construction on a planned green hydrogen project in Sokhna by early 2024.
Ramping up Trade & investment ties
The move comes at a time India is also looking at expanding ties with Egypt, a key player in the politics of both the Arab world and Africa.
The Egyptian government said it wants to welcome Indian investments, particularly in green hydrogen production.
Indian private sector companies have already undertaken significant projects in Egypt.
Indian manufacturers from the power, steel, chemicals, and agriculture equipment industries have expressed interest in setting up projects in Egypt, according to SCZONE officials.
While Indian investments in Egypt last year stood at $3.15 billion, India could be investing up to $700 million in the coming years, according to reports.
Why does Egypt matter?
With a population of almost 110 million and a location that straddles Africa and Asia, the country is one that India enjoyed an exceptionally close relationship with in the first couple of decades after our independence.
Both countries have helped out each other at crucial times over the last two years.
PM Modi has worked towards building stronger ties with Egypt, even inviting the country as a special guest at the G20 summit during India’s presidency.
A lot of the groundwork for the PM’s meeting in Cairo has been done through back-to-back visits to Cairo by Defence Minister Rajnath Singh and External Affairs Minister Dr S Jaishankar in October last year.