Trade pact to boost India’s ties with Canada
Financial Express, India
Trade pact to boost India’s ties with Canada
By Huma Siddiqui
6 June 2011
Taking forward their long-standing relationship, India and Canada aim at a bilateral trade target of $15 billion in the next five years. Both countries are in talks for a Comprehensive Economic Partnership Agreement (CEPA) that would yield significant economic benefit and lower tariff on a large number of products for both the countries.
The bilateral relationship is based on shared democratic values, multi-cultural, multi-ethnic and multi-religious nature of the two societies and strong people-to-people contacts. Speaking at Seoul last November at the G20 Summit, Prime Minister Manmohan Singh noted that the India-Canada relations had undergone a “sea change”. On November 12, 2010, Singh and his Canadian counterpart Stephen Harper announced the launch of talks on the CEPA.
“A Comprehensive Economic Partnership Agreement is an FTA from our perspective. It is aimed at promoting market opening policies and stands to become one of the most important building blocks in constructing a broader, deeper bilateral relationship,” said Stewart G Beck, Canadian high commissioner at New Delhi. “First round of negotiations have already taken place and we are now awaiting dates for the second round. Everything is open to discussions. Financial services are very active in Canada and we would want to discuss this along with other sectors, including agriculture and mining.”
The high commissioner said Canada was particularly well placed to collaborate with India in knowledge-based industries. “This is largely due to the tremendous investments Canada has made to support the country’s research and investment infrastructure,” he said.
A Canada-India joint study estimated that an agreement could increase GDP in each country by approximately $6 billion and increase our two-way bilateral trade by 50%. A free trade agreement with India stands to benefit a wide range of Canadian export sectors such as forest products, minerals, manufactured goods, agricultural products, fish and seafood products, machinery, construction materials and equipment, aerospace and environmental technologies.
“Right now, there are about 250 Canadian companies active in the Indian market and we have set a target of 750 companies. By having more companies involved it will be easier to reach the trade target of $15 billion by 2015 as set by the two leaders,” Beck added.
Bilateral trade figures of the two countries indicated an upward trend during the January-October 2010 period as compared with the same period in 2009. India’s exports to Canada registered a 11.4 % increase whereas India’s imports from the the North American country were up 7.9 % over the same period in 2009. Overall, bilateral trade during January-October 2010 showed 10.28% increase over the same period in 2009.
Canadian investments in India are present in energy, infrastructure, banking, insurance, oil and gas, and transportation sectors as also in engineering and consultancy services. The Indian economy has attracted many Canadian companies, including SNC Lavalin, Bombardier, RIM, CAE Electronics, Sun Life, MDS Nordion and BCE. Royal Bank of Canada and Scotiabank have branches in India. Canadian clean technology companies have also entered into joint ventures with companies in India. Also, three new trade offices have been opened in India in 2010, raising the number to eight.
At the seventh round of annual India-Canada Trade Policy Consultation held in New Delhi last October, the two countries agreed in principle to establish working groups on the private-public partnership (PPP) model to focus on infrastructure, energy and mining, agro-processing, information and communication technologies and education.
The government of Canada in its budget has proposed an India-focused $12-million chair under the Canada Excellence Research Chair (CERC) programme. To be called Canada-India Excellence Research Chair, its objective is to bring the best minds from India to Canada to conduct groundbreaking research.
On the energy front, after taking a back seat to China, India is ready to enter the Canadian energy scene. Recently, Indian officials were in Calgary to drum up investment and promote the country’s latest licensing round just as PetroChina made a $5.4-billion foray into Encana’s unconventional natural gas play. Representatives of ONGC Videsh and Gas Authority India were reportedly in Calgary with the Indian delegation to discuss possible oil sands and unconventional gas buys. Both countries have also signed a nuclear deal to promote and develop co-operation in civilian nuclear energy. The Nuclear Cooperation Agreement which has been ratified by the Canadian Parliament will see uranium exported to India.
Indian investment in Canada has increased steadily in the recent years, especially in the information technology sector. Other areas of significant Indian investment in Canada are financial services and pharmaceuticals.
