Egypt, India consider using local currencies for bilateral trade
In an interview with Al Arabiya Business on Monday, Reddy stated that the two countries’ central banks have reached an advanced technical stage in their talks on using the Indian Rupee and the Egyptian pound instead of the US dollar.
This move aims to ease pressure on foreign currency reserves and exchange rate volatility, which will facilitate trading in goods and services and achieve sustainable trade growth.
It will also reduce reliance on the dollar in intra-bloc transactions for BRICS member countries, promoting industrial, agricultural, and service cooperation.
Egypt faced a shortage in hard currency amid a decline in direct and indirect investments since the start of the war in Ukraine, and has been urging BRICS members to trade in their national currencies.
The group members’ discussion of boosting non-dollar transactions led US President Donald Trump to threaten the countries with 100 percent tariffs if they undercut the US currency.
Brazil, Russia, India, China, and South Africa, the five founding member states of BRICS, account for 41 percent of the world's population.
Egypt has been seeking to strengthen economic ties with India, planning to expand industrial and production integration, focusing on increasing market access and boosting investment flows.
Cairo is also looking to support growth while maintaining fiscal discipline and attracting more Indian investment in renewable energy, pharmaceuticals, and automotive manufacturing to support local production and exports.
Moreover, Egypt has been negotiating with India to explore issuing rupee-denominated bonds in Indian markets and considering a presence in the Indian stock markets.
Bilateral exchange between Egypt and India has reached $6 billion and rose 12 percent in 2025, making it among Cairo's top ten trading partners. In tandem, India’s Investment in Egypt has reached $5 billion across leading sectors such as manufacturing, renewable energy, and food processing.
Indian pharmaceutical firms are looking to establish Egypt as a central production and exporting hub to Africa, while studies are in the pipeline to establish phosphate production plants in Ain Sokhna, according to Ambassador Reddy.
The two countries also established the Egypt-India Joint Business Chamber and are considering plans for an Indian industrial zone within the Suez Canal Economic Zone (SCZone) to expand trade and industrial cooperation.
According to Central Bank of Egypt (CBE) data, Egypt’s trade deficit widened by 49 percent year-on-year to $10.3 billion in January and February 2026, up from $6.93 billion in the same period in 2025.