India Mulls Barter Trade With Crisis-Hit Egypt, Likely To Extend Multi Billion-Dollar Credit Line To Cairo: Report

India is considering a proposal to initiate barter trade with Egypt, involving goods such as fertilisers and gas.

This move is part of a larger deal that may see India extending a credit line worth several billion dollars to Egypt.

According to sources cited by Reuters, an announcement regarding this agreement is likely to be made later this month, during Prime Minister Narendra Modi's first visit to Egypt.

To address Egypt's prolonged foreign currency shortage, Cairo may be allowed to make purchases in rupees as part of this agreement.

The sale of Egyptian products that could be of use for India is being considered as a means to settle this debt through bartering.

To facilitate this agreement, India's Ministry of External Affairs is reportedly consulting with various departments on their interest in fertilisers and gas from Cairo as part payment for the credit line.

As part of the facility, Egypt is interested in acquiring wheat supplies, among other items.

However, due to India's wheat export ban, New Delhi is unlikely to ship the grain to Egypt.

India, the second-largest wheat producer in the world, imposed a ban on wheat exports in May 2022 to control the rising domestic prices.

As a result, India had to cancel its plan to export 3 million tons of wheat to Egypt for the year 2022-23. Consequently, Egypt is now mostly dependent on Russia for the grain.

According to Egypt's supply minister Ali Moselhy, the negotiations on the facility are still ongoing.

"It's a negotiation. Which companies will be involved and in which commodities? All of that is still in discussion," Moselhy was quoted as saying by Reuters.

Moselhy also added that there are many discussions taking place, but the model for the facility is not yet defined.

The size of a possible credit line was not specified by the minister.

In the previous fiscal year, India exported $4.11 billion worth of goods to Egypt while importing $1.95 billion.

Due to a shortage of funds, Egypt has postponed payments for its large wheat purchases, in some cases for several months.

Egypt's economy has been affected by the pandemic and high commodity prices, leading to foreign investors withdrawing around $20 billion from its financial markets. The country is now focusing on stabilising its economy.