Writuparna Kakati | 02 Aug, 2008
For most of us Egypt stands for antiquity- a window to humanity's distant past, mankind's greatest glories, achievements and mistakes.
Egypt's history covers thousands of years, from the earliest known human civilization in Babylonia, and encompasses so many great eras of the history of mankind including the rise of Greeks and Romans, the establishment of the Jewish, Christian and Islamic religions, the colonial era when the country came under France and English rule, and finally its return to independence.
In Egypt, we find some of the first written words of civilization, the earliest detailed records of warfare, the first paved roads, the first wines and beer and even the first peace treaties between organized governments. Giant Pyramids, mighty monuments of the Greeks and Romans, mysterious mummies, the lost city of great Alexandria and its famous library, and many more- the magic of Egypt mingles everything to mesmerize the world since antiquity.
Indo-Egypt trade since antiquity
In ancient times, Egypt was a centre for International trade. Egypt held the largest supply of gold in the ancient world and during the three millennium of Pharaonic history, Egyptians traded goods regularly with India and other countries. The Silk Route served as the primary path of commerce for the states along its way and contributed significantly in the development of the great civilizations of India, China, Egypt, Mesopotamia, Persia, and Rome.
Indian spices and cotton were sent to Rome and Greece through the overland caravan routes via Egypt, Anatolia and Persia. A few years back, archaeological digs at the ancient Egyptian town of Berenike produced spices and gem fragments. It indicate that even sea trade between India and Egypt during the Roman Empire was far more noticeable than previously thought.
In modern times, a very good relationship is being established between India and Egypt both in economic and political spheres from the very beginning during the non-aligned movement, which is considered as the land mark of the freedom struggle of India. India emerged as Egypt's third largest trading partner behind the US and Italy in 2006. In 2007, India's rank was fourth behind the US, Italy and Saudi Arabia. For both the years, India was the largest importer of Egyptian products. According to Egyptian trade figures, India's exports to Egypt amounted to USD 534.00 million in 2007, a growth of 51% over the 2006 figure. India's imports from Egypt stood at USD 1882.64 million during 2007, showing a growth of 35% over the previous year.
Nearly 95% of Egypt's exports to India comprise oil and gas. Coking coal, raw cotton, rock phosphate, and marble constitute the other import items. The principal Indian export items include frozen meat, cotton yarn and synthetic yarn, rice, diesel, tobacco, electrical machinery, soybean, chemicals, automobiles and components, sugar, pharmaceuticals and tea.
Egyptian economy
Since the beginning of 2005, Egypt’s economy has improved considerably due mainly to a reformist government. The Government have successfully taken several steps including floatation of the Egyptian pound, elimination of the foreign exchange shortages, reduction in tariffs and simplification of the tariff structure by cutting the number of rates and categories, and the reduction of the amount of red tape obstructing the business, etc. The economy grew at a 5.1% rate in 2005 and the new measures have inspired a wave of enthusiasm in the business community. Trade agreements with the European Union and the establishment of Qualified Industrial Zones (QIZs) allowing duty-free exports to the United States augur well for strong export growth.
Textile industry in Egypt
The textile industry in Egypt covers the entire spectrum of cotton processing operations, including spinning, weaving, converting, knitting, and garment manufacture. It is growing at an average rate of 6.5% annually and is considered of paramount importance to the Egyptian economy. It employs more than half a million Egyptians and is a crucial foreign exchange earner.
One of the important characteristics of the textile/garment industry is that it is one of the very few manufacturing processes in Egypt that is handled completely in country. Thirty-one large public entities account for 100% of spinning, 70% of weaving, 40% of knitting, and 30% of the garment manufacturing industry. Although government-owned companies have traditionally dominated the industry, due to poor management and other reasons, many have recently suffered from losses. The public sector is by far the main supplier for many textile products such as lint, yarn, and fabrics. On the other hand, textile exports with higher value added items, such as ready-made garments and clothing dominated by the private sector, have expanded successfully.
Egyptian apparel has a well-deserved reputation of quality and competitive price. A growing number of international fashion designers and department stores in the U.S. and the European Union make use of production facilities located in Egypt; placing orders for private label products designed for export markets.
The Egyptian apparel industry is one of the most dynamic industrial sectors in Egypt. It comprises some 1500 private sector apparel and intermediate manufacturers, the majority of which are equipped with state-of-the-art machinery. The latest technologies are adopted in all phases of production: pattern making, spreading, cutting, sewing, and packaging. Apparel manufacturers also apply the latest technical innovations such as Electronic Data Interchange (EDI), Supply Chain Management (SCM), and Product Data Management (PDM). Total apparel production output is approximately USD 3 billion per year, representing 3.5% of Egypt's total GDP.
Indo-Egypt textile trade
Both India and Egypt have highly developed textile and garment industries. Egypt imports a large part of the requirement of Man Made Fibres (MMF) for its textile and garment industries from India.
On the other hand, India is the largest importer of Egyptian raw cotton and cotton yarn for its textile and garment industries. The industries of both countries can cooperate in upgradation and modernization.
Import of MMF (Man Made Fibre) textiles into Egypt
Egypt imports only a little portion of its total MMF imports from India thus providing a great potential for expanding exports of the Indian Man Made Fibre Textiles to this market.
Main MMF items imported by Egypt
- Yarn
- Synthetic & Rayon textiles
- Viscose Filament & Viscose Spun
- MMF Fabrics
- Polyester Filament fabrics
- Polyester Viscose Fabrics.
India's exports of MMF textiles to Egypt
The export of MMF textiles to Egypt have been growing consistently at a CAGR of 30.5% since the year 2001-02. Yarn constitute (59.67%) of the total exports to Egypt followed by Fabrics (30.61%), Fibre (6.71%) and Made-ups (3.01%).
During 2004-05 man made textile export were US 2.5 billion, recording a growth of 12.6% as compared to the corresponding period of 2003-04. During 2005-06 the man made textile export amounted to US $ 2.00 billion, recording a decline of 2.47% over the exports during the corresponding period of 2004-05. During the first quarter of 2006-07, exports have amounted to US$ 0.52 billion, which reflects an increase of 13.15% over the exports during the corresponding period of 2005-06.
India's main items of export to Egypt
- Fabrics
- Polyester Filament Fabrics
- Polyester Viscose Fabrics
- Polyester Blended Fabrics
- Synthetic Non Specified Fabrics
- Made-ups
- Yarn
- Fibre
Egypt- a fast growing market for Indian MMF textiles
Egypt is one of the fast growing markets for the Indian Man Made Fibre Textiles. The exports of MMF Textiles to this market have been growing nearly 30% annually for the past four years and reached a level of Rs. 281.54 crore during 2005-06.
The clothing and textile sector in Egypt is the largest industrial employer and also a major foreign exchange earner. Much of the apparel and textile sector has been dominated by state-owned firms but the access to the U.S. economy through the Qualified Industrial Zones (QIZ) is expected to bring a push for privatization and new investment in this important sector.
Egypt’s overall textile import was to the tune of US$466.82 million during 2004. It may be observed that MMF textiles covered under chapter 54 and 55 constitutes majority of imports.
Indian MMF fabric and yarn Industry: Present scenario
India has unparalleled legacy of excellence in textiles from time immemorial. Traditional skill of craftsmanship, abundance of all raw materials, low cost of labor, modern technology - all these have enabled the Indian man made textile industry to to compete effortlessly in the global markets.
The production of man-made fibre during 2007-08 shows an increasing trend as compared to the corresponding period of 2006-07. The production of Viscose Staple Fibre & Acrylic Staple Fibre is expected to decrease by 10% and 3%, respectively, during 2007-08. The production of Polypropylene Staple Fibre and Polyester Staple Fibre is expected to increase by 11% and 10%.
The total production of man-made filament yarn increased by 9.5%, during April-December 2007, as compared to corresponding period of the previous year. The production of Nylon Filament Yarn and Viscose Filament Yarn is also expected to increase during 2007-08. The production of Polypropylene Filament Yarn and Polyester Filament Yarn is expected to increase by about 10% during 2007-08.
The above facts and figures imply that the Indian man-made fiber and yarn industry is uniquely placed with its own dynamic advantages and the industry is surging ahead swiftly in the world textile space. In this scenario, Indian companies engaged in this sector could grab enough opportunities if they search for proper market for their products. As the Egyptian textile industry is highly dependent upon imports of man-made fiber and yarn, there is good scope for Indian companies engaged in this field to export and expand their business to this land of giant pyramids.
