The diplomatic landscape between India and Canada is currently turbulent, casting a shadow over their economic ties:
- Trade Talks Paused: Recent allegations surrounding the death of Khalistani activist Hardeep Singh Nijjar have strained relations between the two nations. Consequently, the ongoing negotiations for the India-Canada Comprehensive Economic Partnership Agreement (CEPA), which saw a revival in March 2022, have been temporarily halted.
- Trade Mission Postponed: Canadian Trade Minister Mary Ng’s anticipated trade mission to India this October has been put on hold indefinitely.
- Trade Figures: Bilateral trade between India and Canada reached a commendable $8.16 billion for the fiscal year ending March 2023. The trade balance is notably even, with India exporting goods worth $4.1 billion and importing items valued at $4.06 billion during 2022-23.
- Key Trade Items: India’s primary imports from Canada encompass mining products, fertilisers, timber, and paper products. In contrast, Canada’s imports from India are diverse, ranging from garments and electronics to auto parts and jewellery.
- Investment Landscape: Canadian pension funds, especially the Canadian Pension Plan Investment Board (CPPIB), have significant stakes in renowned Indian companies, including Paytm, Zomato, and Infosys. Over 600 Canadian firms have established their footprint in India, with companies like Bombardier and SNC Lavalin leading the pack. Conversely, Indian IT giants such as TCS and Wipro have made substantial investments in Canada.
- People-to-People Ties: Despite the diplomatic rift, the deep-rooted connections between the Indian and Canadian populace remain robust. Sharad Kumar Saraf, Chairman of Technocraft Industries, emphasized that trade is driven by commercial interests and that political disturbances are transient. He cited the sustained trade between India and China despite their diplomatic challenges as an example.
- Educational Ties: India remains the top source of international students for Canada, with Indian students contributing a whopping $4.9 billion to the Canadian economy in 2021.
- Britain’s Stance: In a related development, Britain has chosen to continue its trade discussions with India, undeterred by the allegations from Canada. The British spokesperson emphasized the distinction between trade negotiations and other issues, assuring that the trade talks would proceed unaffected.
In the grand tapestry of international relations, the current situation between India and Canada is a reminder of the delicate balance between diplomacy and commerce. As both nations navigate this challenging phase, the global community will be keenly observing the developments and their implications for the Asia Pacific region.