Algeria's Strategic Shift towards India and Asia
Algeria is witnessing a significant shift in its foreign policy as it seeks to diversify economic partnerships beyond its traditional European ties. This transition comes in light of Indian President Droupadi Murmu's recent four-day state visit to Algeria, marking the first high-level Indian official visit in several years. During her visit, President Murmu and Algerian President Abdelmadjid Tebboune discussed strategies to enhance bilateral economic cooperation, particularly as Algeria prepares to review its partnership agreement with the European Union in 2025. This move signals Algeria's intent to explore new economic avenues, especially with emerging powers in Asia.
The bilateral trade between Algeria and India has fluctuated around $2 billion annually, peaking at $2.9 billion in 2018. President Tebboune emphasized the need to increase economic cooperation and investment, highlighting a joint commitment to fostering business relations. The recent Algerian-Indian Economic Forum, attended by over 300 business leaders, resulted in a Memorandum of Understanding aimed at strengthening ties in sectors like energy, agriculture, and technology, showcasing a new era of cooperation between the two nations.
Economic Aspirations and the Need for Diversification
Algeria's decision to pivot towards India and Asia is underscored by its ambitious goal of achieving a gross domestic product of $400 billion by 2027. Economic experts view this shift as a necessary response to the limitations of Algeria's existing agreements with the European Union, which have been criticized as inequitable. Former Minister Al-Hashemi Djaaboub described the EU agreement as one of submission, which Algeria signed under duress and without adequate negotiation. He argues that the EU has failed to uphold its end of the bargain, prompting Algeria to seek partnerships that offer more equitable terms.
Moreover, Algeria's recent economic reforms, including a new investment law and a push for digitization, have attracted interest from Indian investors. The Algerian Economic Renewal Council has identified key sectors such as pharmaceuticals, tourism, and petrochemicals as critical for future collaboration. Drupadi Murmu's remarks during the business forum highlighted the potential for growth in these areas, indicating a mutual interest in establishing robust economic ties.
As Algeria embarks on this path, experts suggest that its growing relationship with India may compel European nations to reassess their engagement strategies. The shift towards Asia not only aims to secure new markets but also to reduce dependency on traditional partners, thereby enhancing Algeria's economic independence and resilience.
