Egypt is positioning itself as a strategic logistics and industrial extension for India on the Mediterranean, with a target of increasing annual bilateral trade from a current USD 5 bn to USD 12 bn within a few years, Egypt’s Ambassador to India Kamel Galal told CNBC TV18. The ambassador stressed that India's manufacturing scale and service sectors align with Egypt's strategic geography and resources.

The new trade runway for India-Egypt is sectoral and monetizable, with Galal pointing out key avenues, including potentially adding USD 800 mn in additional trade volumes from the joint manufacturing of fashion goods in the Suez Canal Economic Zone, as well as rising solar panel imports from India. Egypt is also looking to the Indian IT sector as a major contributor to its digital transformation, particularly a USD 500 mn initiative for digital port automation. Meanwhile, agro-parks and value-added food processing for Egypt are being pitched to boost trade by an additional USD 1 bn by 2026 — with India already exporting basmati rice, spices, and fruit worth USD 300 mn in 2024.

Trade along the Suez Canal has stabilized since the Sharm El Sheikh Summit for Peace last month, the ambassador said, after it had been disrupted by Houthi militia attacks against commercial ships in the Red Sea between 2023-25. Transit volumes are now 85-90% of pre-2023 levels — helped by multinational naval escorts and AI-monitored drone patrols, he added.

Why does this matter for New Delhi? A secure Suez is critical for the India-MiddleEast-Europe Economic Corridor (IMEC), Galal said. A predictable Red Sea passage reduces arbitrage loss, stabilizes container schedules, and lowers risk pricing on goods moving from India to the Mediterranean. The IMEC was announced at the G20 Summit in 2023 as a major infrastructure and trade project connecting India to Europe via the Arabian Peninsula, and is predicted to reduce transit time by 40% and shipping costs by 30%.

Egypt argues its role in the IMEC is irreplaceable given its control of the Suez — which handles 12% of global trade. For Indian exporters, Egypt is signaling that the future play is collaboration and co-production going beyond traditional commodity trade as Egypt offers a wider access to the African continent.

REMEMBER: This comes after Egyptian Foreign Minister Badr Abdelatty’s meetings in New Delhi with Prime Minister Narendra Modi last month. Abdelatty stressed the need to set up an Egypt-India Business Council, a chamber of commerce, and a joint business forum. These initiatives are on the agenda for Commerce Minister Piyush Goyal’s visit to Egypt early next year. The two sides also floated proposals on setting up an Indian Industrial Zone inside the Suez Canal Economic Zone.

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