Algeria
Akash N. Bhowmick-02
Pankaj Rastogi-25
Himanshu Titoria-16
Zoheb Zuber-54
Presention Date: 20 February 2010 Anshul Jain-05
At a glance
A brief profile of Algeria
India’s present trade relations with Algeria – composition of exports
and imports
India-Algeria bilateral agreements
Major Indian projects in Algeria
Major trade barriers in Algeria
Identifying major trade items for the future
India’s strategy for improving trade relationship with Algeria
PEOPLE
The principal ethnic majority are the Arabs who account for around 83% of the population while the remaining 17% are Berbers.
RELIGION
The official religion is Islam with 99% of the population Sunni Muslims while Roman Catholics and Jews combined represent less
than 1% of population.
LANGUAGES
The official language is Arabic which is spoken by approximately 81% of the population. Rest speak French.
CURRENCY
The official currency is the Dinar (DA) divided into 100 Centimes.
MAIN EXPORTS
Crude Oil, Dates, Liquefied Natural Gas (LNG), Petroleum Products, Wine, Dates, Fruits and Vegetables.
MONETARY POLICY
The official policy aim of Banque d’ Algerie (the central bank) is to control the expansion of the
money supply in order to contain inflation though it does not publish its target for monetary growth.
The BdA is likely to keep the interest rates low to encourage the development of the banking sector.
ECONOMIC GROWTH
Growth in hydrocarbons production was low in 2008 thereby restricting GDP growth. Non-
hydrocarbons sectors however posted robust growth rates owing to steady expansion in
construction and public works backed by intensive government sponsored initiative to
upgrade Algeria’s infrastructure and to provide affordable homes. Strengthening oil prices
will support investment and will help to counteract the slowdown in export growth caused by
the economic downturn in U.S.A and Europe. The GDP growth is expected to be 4.5% in
2010.
INFLATION
Inflation averaged 4.3% in 2009. It is expected that average inflation will fall to 3.4% in
2010.Governemt will continue to subsidize many food products in order to maintain
artificially low inflation.
EXCHANGE RATES
The BdA continues to operate a managed float of the Algerian dinar. The main
aim is to maintain exchange-rate stability particularly with the US dollar and the
euro. To curb the rising inflation, BdA allowed the currency to appreciate against
the dollar during 2008 when it averaged AD65:US$1. Since then they have allowed
the currency to depreciate to around AD73:US$1 to reduce the demand for imports.
The government is likely to continue to depreciate the currency further in 2010.
EXTERNAL SECTOR
Strong domestic demand and higher commodity prices, specially for food and
construction materials, in 2010 will pressurize the import bill to move upward but it
would be outweighed by higher exports stemming from rising oil prices. The trade
surplus is expected to widen to US$17.8bn in 2010.
Turnkey Projects
Algeria is facing an acute shortage of suitably sized firms having desired competence
which can takeover the responsibility of major turnkey projects in different sectors.
This is a shimmering scope for Indian construction giants to plunge in and bring back
home projects worth millions of dollars.
Algerian importers are looking for Indian suppliers for those goods which they
are presently importing from China. Indian exporters should be made aware of
this growing opportunity.
Joint venture projects between the two countries should be initiated and
promoted so that India can take active part in Algeria’s modernization drive and
in turn do business with Algeria.
Algeria imports textiles to cater to its local market. This sector also provides an
opportunity for textile exporters from India. Adequate steps should be taken by
the Indian government to facilitate textile exports.