TORONTO: The Business Council of Canada and the Canada-India Business CouncilThe business Council of Canada have called for a new thrust to Canadian-India ties and the completion of a comprehensive free trade and investment agreement between the two countries.
A report released by the two organizations said: “ India represents a vital door to the future in global trade. The Canadian government is currently developing its long-awaited strategy for the Indo-Pacific region. And there is no path to achieving success in this massive and strategically important region without building strong and enduring economic ties with India — one of Canada’s last large, untapped trade opportunities.”
It pointed out that India was today “in the midst of an economic surge, powered by an explosion of consumer spending, a rapidly expanding middle class and massive investments in infrastructure and digitization.”
Pointing out that an “early progress” deal with India will be an important first step in enhancing the relationship, it said that a comprehensive trade and investment agreement that reduces tariffs and other barriers, increases labour mobility and improves investor confidence would generate significant economic gains for both countries.
The report urged more Investment in the India relationship. “To demonstrate Canada’s commitment to forging closer ties, federal ministers should commit to visiting India frequently. Ideally such visits and trade missions would be coordinated with provincial, territorial and municipal officials, as well as Canadian business organizations. In addition, Canada should ensure it hastalent on the ground, including at the state, territorial and municipal levels, to support this fast-growing relationship. The government should work closely with business groups and companies that are in a position to help open doors in India. It should also collect and share data on the most promising market opportunities for Canadian goods and services.”
The report goes on to say: “Economic growth is expected to lift nearly a billion Indians out of poverty in the next five years. That will help propel India — currently the world’s sixth largest economy — to No. 3 by 2030. With 1.4-billion consumers, India is the world’s second most populous country. Its population is on course to overtake that of China by 2027, according to the United Nations. India is also home to 17 of the 20 fastest-growing cities in the world. Over the next three years, India is projected to be the world’s fastest-growing large economy, with real GDP growth well above its peers in Asia, North America and Europe.”
It was in early 2022, Canada and India announced the resumption of talks toward a comprehensive free trade agreement. Both sides are aiming for singing a deal by next year, when India is slated to host the G-20 leaders summit for the first time.
The report noted that U.S. President Joe Biden had this year launched the Indo-Pacific Economic Framework for Prosperity. A dozen other countries, including India, Japan, and Australia, have joined the framework – but not Canada. “Signing a free trade agreement with India would give Canadian companies and investors a leg up over competitors from many other countries. By the same token, failure to act soon would leave Canada at a disadvantage, the report said.
Canada has lost market share in the expanding Indian market. An analysis by Ciuriak Consulting (commissioned by the Business Council of Canada and the Canada-India Business Council) shows that Canada’s share of two-way goods trade with India has eroded from 1.02 per cent in 2001 to 0.81 per cent in 2021.
The report also called upon Canadian businesses to grab the opportunity now. “Businesses must develop their own India strategies. Just as they did with China 20 years ago, Canadian companies must give serious thought to India. India is poised to become the world’s third-largest economy. Every company with global ambitions should have a strategy to seize potential opportunities in India and keep pace with competitors. This could include establishing a presence in India to better understand the challenges and opportunities of the complex and diverse Indian market.”
More than 600 Canadian companies and organizations have already established a presence in India. Hundreds more are actively pursuing opportunities there.