India is building its North Africa ties piecemeal, forgoing a regional corridor

India is building its North Africa business one country at a time, but the patchwork approach is costing it the region’s biggest prize: A connected production base across Egypt, Morocco, Algeria, and Tunisia that could carry Indian manufacturing into African and European markets.

The individual relationships are growing. New Delhi has set bigger trade targets with Egypt and Morocco, Indian companies are moving into local manufacturing, and both sides are going long on pharma, automotive, fertilizers, machinery, and energy. But each relationship runs on its own terms and its own timetable, and little yet links a factory in one country to suppliers or buyers in the next.

“What we see in North Africa today is better described as the development of interconnected economic gateways rather than an established Indian North Africa corridor,” Manish Karmwar, professor at the University of Delhi’s Department of African Studies, tells EnterpriseAM.

Egypt leads while Tunisia lags

Egypt has the largest trade relationship with India, and it’s still well short of its goal. Trade reached USD 6.5 bn in FY 2025-26, according to the Indian Embassy in Cairo. That’s just over half the USD 12 bn five-year target set in 2023, which Egyptian President Abdel Fattah El Sisi and Indian Prime Minister Narendra Modi reaffirmed at the Brics Summit in New Delhi this month. More than 700 Indian companies are registered in Egypt, around 70 of them active, with combined investments above USD 5.5 bn.

Morocco is on its own clock. The two countries agreed last month to double bilateral trade within five years, from around USD 4 bn in 2025, and to set up a joint working group to explore a preferential trade agreement (PTA).

Algeria is smaller but accelerating, while Tunisia is lagging altogether. Indian exports hit a record USD 1.1 bn in FY 2025-26, up from USD 947 mn the year before, according to the Indian Commerce Ministry. India and Tunisia have repeatedly targeted USD 1 bn in bilateral trade, but trade came to USD 521.7 mn in FY 2024-25.

Each of those figures comes from a separate negotiation, and no target or framework covers all four.

Why New Delhi goes country by country

The piecemeal approach is partly by design. “India’s trade strategy has tilted decisively towards bilateral deals over region-wide agreements," says Tanu M. Goyal, senior fellow at the Indian Council for Research on International Economic Relations.

Bilateral agreements let India tailor its commitments to each partner’s interests. “The experience with ASEAN showed India that bloc-level negotiations can produce weaker outcomes because terms end up being set by the ‘lowest common denominator,’” Goyal says. Morocco’s PTA talks follow that model.

The region also gives New Delhi little reason to try anything else. “The national interests of the countries of the region are highly fragmented,” says Samir Bhattacharya, fellow at the Observer Research Foundation. That fragmentation, he says, has kept the Arab Maghreb Union largely dormant since the 1990s, and he points to how differently the four countries see themselves: Egypt as African and Arab, Morocco as African but also European, and Tunisia as barely African at all, “except for geography.”

The four markets also barely trade with one another. “Intra-North Africa exports made up just 4% of the region's total exports in 2021, as against roughly 60% within the European Union,” Malinne Blomberg, deputy director general for North Africa at the African Development Bank (AfDB) Group, tells EnterpriseAM. Tunisia sends 7% of its exports to its North African neighbors, Egypt 5%, Algeria 4%, and Morocco 2%, she says.

India is also not alone in working this way. Blomberg says the EU, China, the Gulf, and Turkey all pair a regional interest with country-by-country deals. “Bilateral-by-default may be less a distinctly Indian habit than the only way anyone actually operates in North Africa today,” she says. If every major partner works bilaterally, the advantage goes to whichever one connects its separate country agreements first.

What the patchwork costs

The cost shows up in Africa’s own trade framework. Egypt, Morocco, Algeria, and Tunisia all belong to the African Continental FreeTrade Area (AfCFTA), and Egypt and Tunisia already trade under its Guided Trade Initiative. But AfCFTA preferences are protected by rules of origin, Goyal says, so goods exported from India don’t qualify. India’s only comprehensive trade agreement in force on the continent is its 2021 CECPA with Mauritius.

“The more durable route to capturing value from Africa’s regional integration is likely to run through outward investment and local production rather than through market-access concessions alone,” Goyal says. For Indian companies, that means manufacturing inside North Africa to sell across the continent on AfCFTA terms. A set of plants that don’t trade with one another captures only part of that value.

India’s plants in the region don’t connect

India already has industrial anchors in three of the four markets. In Tunisia, Indian companies GSFC and Coromandel each hold 15% of the USD 465 mn Tunisia-India Fertilizer Joint Venture, which was set up in 2006 and began operating in 2013. Egypt has built an Egyptian-Indian Industrial Integration Platform for joint production, component exchange, supplier development, and export manufacturing. Morocco hosts the IMACID phosphates partnership and Tata’s first overseas defense plant, in Berrechid, which Defense Minister Rajnath Singh inaugurated in September 2025.

Each of these projects belongs to its own bilateral relationship, and none yet feeds a supply chain that reaches the other three markets.

Making the pieces work together

India doesn’t need North Africa to act as one market to benefit from it. Each country could play a different role: Egypt offering manufacturing scale and Suez connectivity, Morocco access to European and African markets, Algeria energy, mining, and industrial projects, and Tunisia fertilizer and specialized manufacturing.

That would require Indian companies to plan production across borders: Making goods in one country, sourcing from a second, and selling into a third, rather than exporting from India to each market separately.

Blomberg says the region’s gaps are practical ones. “What’s needed is better port-to-port connectivity and customs interoperability, closer alignment on standards and rules of origin, and the regional value chains that would let a company source in one North African country and sell in another,” she says. Closing those gaps doesn’t require a political union, she adds — only steady investment in the plumbing.

Policy is only partway there. New Delhi treats North Africa as a distinct region within its West Asia-North Africa (WANA) framework, Karmwar says, but its trade diplomacy remains largely bilateral. “The policy ingredients for a North African corridor are emerging,” he says, “but they have not yet been consolidated into a single North Africa strategy.”

Bhattacharya is more skeptical. “India’s engagement in the region will remain bilateral,” he says, citing the strategic differences between the four countries. If he’s right, connecting these markets will depend on Indian companies and on the ports, customs systems, and standards Blomberg describes. Until those links are built, India will have four growing trade relationships in North Africa and no regional play.