A source said the deal would likely be announced later this month, during Indian Prime Minister Narendra Modi’s first visit to Egypt, which is facing a hard currency shortage.
“The deal will allow Egypt to make purchases in rupees and barter is being discussed as a way to settle this debt by selling Egyptian products that could benefit India,” the source added.
An Indian official said that the Indian Ministry of External Affairs was consulting with the administrations on their desire to buy fertilizers and gas in Cairo in partial payment for the line of credit.
New Delhi is keen to diversify its fertilizer imports, especially after 2021 when some Indian states faced shortages due to Chinese export restrictions and record price hikes.
The Indian official added that as part of the facilitation, Egypt wants to have supplies of wheat among others, but New Delhi is unlikely to ship the grain due to the wheat export ban.
India, the world’s second-largest wheat producer, banned wheat exports in May 2022 to help control soaring domestic prices, and scrapped a plan to export 3 million tonnes of wheat to Egypt during of the 2022-23 financial year. Egypt now depends mainly on Russia for grain.
“There are ongoing negotiations and discussions on the use of local currencies in trade with countries, including India,” Egyptian Supply Minister Ali Moselhi told Reuters, adding : “Which countries will participate and for which products? Everything is still under discussion”.
India exported goods worth $4.11 billion to Egypt in the last fiscal year, while it imported $1.95 billion.
Last month, Reuters reported that Egypt had delayed payments on its large wheat purchases, in some cases for months, due to a shortage of dollars.
Meanwhile, the Egyptian cabinet denied that Egypt had failed to pay for its imports of imported wheat.
The Egyptian government this week secured $700 million in funding from the International Islamic Trade Finance Corporation to finance grain imports, according to statements by Egypt’s supply minister.
“The country’s strategic wheat reserves are sufficient for 5.9 months,” al-Moselhi said, adding that “the government has purchased 3.44 million tons of local wheat.”
Egypt is trying to stabilize its economy, which was hit by the epidemic and then the war in Ukraine, which caused a sharp wave of rising commodity prices, prompting foreign investors to withdraw around $ 20 billion from its financial markets in so-called “hot countries”. money”.
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