Live Mint - 07 March 2022
India, Canada set for FTA talks on Fri
By Dilasha Seth, Ravi Dutta Mishra
Commerce minister Piyush Goyal and his Canadian counterpart Mary Ng will meet in New Delhi on Friday to begin talks for a free trade agreement (FTA) between the two countries, two people aware of the development said. The negotiations for a comprehensive economic partnership may also cover investment and services. However, India is looking for an early harvest or an interim trade deal before progressing with a full pact.
“India and Canada are set to launch FTA talks on Friday. We will go ahead with the same strategy as that with other developed countries of doing an early harvest deal first," said a government official.
While Canada is looking at an investment protection agreement as part of the comprehensive deal, India is keen to discuss market access for agriculture, textiles, pharmaceuticals, and easing of technical and sanitary and phytosanitary barriers to trade.
“The India-Canada talks will officially be launched by the trade ministers in New Delhi," one of the two officials cited above said on condition of anonymity.
The launch of trade talks comes in the backdrop of worsening geopolitical tensions following the Russian invasion of Ukraine, which has impacted global trade. Earlier in 2019, India had decided to opt out of the Regional Comprehensive Economic Partnership (RCEP) citing “significant outstanding issues, which remain unresolved". The domestic sector had argued that it could get hit due to cheaper alternatives from other countries.
The two sides had begun talks for a comprehensive economic partnership agreement in 2010, but it did not see much progress, although the negotiations went on till 2017. This time, the two sides may look at signing a mini trade deal or an early harvest deal, which keep the difficult and sensitive issues to be dealt with later as part of the full pact.
Canada is India’s 31st largest market, accounting for just $3 billion or 0.88% of India’s total outbound shipments in April-January 2021-22. Imports from the North American nation stood at $2.5 billion during this period, making up for 0.52% of India’s total inbound shipments. With imports worth $2.68 billion, and exports worth $2.9 billion in 2020-21, India had a small trade surplus of nearly $200 million with Canada.
Organic chemicals, pharmaceuticals, and apparel and textiles have been India’s top exports to Canada, with shipments worth $198 million and $261 million and $210 million in the April-January period of 2021-22. Iron and steel exports to Ottawa stood at $300 million.
Imports from Canada included vegetables and petro products of $343 million and $542 million respectively.
Mint had earlier reported that India is keen to have a strong services agreement under the proposed CEPA as Canada is not a large market for Indian goods. Besides, India is looking at generating more jobs for its teeming IT professionals, by facilitating easier work visas for Canada under the trade agreement.