These officials say there will be one more round of talks between the two countries before formally signing a PTA/FTA with Egypt during the course of this year. Earlier, Mr Sastry had two rounds of discussions during the past few months with Egyptian authorities in this regard.
They explain that PTA/FTA once signed will also open up the possibility of Indian tea emerging competitive in the Egyptian market with a lower level of import duty. Besides, prospects will also improve for supplying wheat to Egypt. Egypt has an estimated requirement of around 6.5 million tonne wheat annually. Egypt also imports tyres, gloves etc.
At present, Cairo subjects Kenyan tea to a paltry 5 per cent duty, while Indian tea is made to pay as high a duty as 30 per cent on grounds that New Delhi is outside the Comesa, a regional grouping on the lines of South Asian PTA. Comesa came into being more than two years ago.
Indian tea accounts for about 9 per cent of Egypts total imports, against Sri Lankas share of over 19 per cent. Egypt has been one of Indias trading partners in the African continent for long. The bilateral trade agreement has been in operation since March 1978 and is based on MFN clause. Two-way trade stood at $777.21 million during 2002 with exports at $365.48 million and imports at $411.73 million, resulting in a trade deficit amounting to $46.25 for India, the first time since 1994. Deficit was due to the 57 per cent rise in crude oil imports from Egypt.
Indias major export items to Egypt include iron/steel casings, other engineering goods, including diesel pumps, engines and vehicles, cotton, jute yarn, while imports comprise besides petroleum and products, rock phosphate, cooking coal and marble.
So far, India has signed bilateral PTAs/FTAs with Sri Lanka and Afghanistan. A declaration of intent for a comprehensive economic cooperation agreement with Singapore was signed by commerce and industry minister Arun Jaitley and Singaporean foreign trade minister George Yeo in New Delhi on April 8 this year.
Officials say most countries are now members of one or the other kind of regional trade arrangements or customs unions. Regional trade areas also provide a useful platform for expanding Indias economic space and result in market access for its products.