New Delhi, July 4 (IANS) The ongoing political turmoil in Egypt has raised concern in India over possible disruption in crude supplies, two-way trade and investment.
Indian companies operating out of the north African nation are keeping a close watch on the evolving ground realities as the country's armed forces moved in to force a resolution to the crisis, swearing in an interim president in place of the ousted Islamist Mohamed Mursi.
There are currently 352 Indian companies operating in Egypt, in the fields of consumer goods, petrochemicals, oil and gas, textiles and telecommunications.
Traders and oil officials say that in a worst case scenario if the present unrest prolongs, the closure of Suez Canal and the Sumed pipeline linking the Red Sea to the Mediterranean would disrupt oil flows and result in spike in oil prices, spelling bad news for the financial market and the current account deficit.
India imports bulk of its crude from the Middle East and Africa. Nearly 95 percent of Egypt's exports to India comprise oil and gas.
Brent crude came down from a two-week high after Egypt's armed forces ousted Mursi and the head of the country's Constitutional Court, Adli Mansour, was sworn-in interim president Thursday.
Mansour said he planned to hold new elections, but did not say when.
Egypt has been facing mass demonstrations since June 30 by the opposition calling for the resignation of Mursi and his supporters. In fact, the Arab world's most populous nation has been in turmoil since the fall of long-standing president Hosni Mubarak as the Arab Spring uprisings took hold in early 2011. During those tumultuous days, a couple of companies like Dabur, Marico and Asian Paints had to shut their operations in the country temporarily.
Former Indian Ambassador Shiv Mukherjee says the change in political situation in Egypt "does not hold any special threat" to Indian investments. "In fact, there has been no history of any antipathy to Indian investment in Egypt."
At the political level, the developments in Egypt are an internal affair of the country. "We may have our views on the democratic process, we may have an opinion on the army taking over, but it's an internal affair. We deal with states."
Mukherjee said it's a "wait and watch" kind of situation and the Indian embassy in Cairo must be in touch with the companies and taking the adequate steps.
The current political instability has occurred at a time when the two countries were making robust efforts to develop a significant partnership by strengthening the bilateral economic and commercial relations, and Indians have emerged as important investors in Egypt.
In March this year, the Egyptian Ministry of Investment had said several Indian companies were willing to invest up to $400 million towards projects in power generation, plastic and real estate in Egypt.
Bilateral trade has grown more than 60 percent during the last five years from $3,384.35 million in 2007-08 to $5,430.05 million in 2011-12. India's exports to Egypt have grown almost 80 percent from about $1,398.83 million in 2007-08 to $2,421.89 million in 2011-12.