INDIA – CANADA

INDIA – CANADA

Current Relations

1. Economic
   • Bilateral Trade: Total bilateral trade between the two countries including goods and services crossed almost $11 billion. During April 2021-January 2022, Indian exports to Canada increased to $3 billion, up almost by a fourth as compared to a year-ago period.
   • Trade Relations:

• CEPA: In 2010, Canada and India launched negotiations toward a Comprehensive Economic Partnership Agreement (CEPA). The most recent full negotiating round was held in August 2017 in New Delhi.
• Indian Exports: Canada’s Imports from India were US$4.77 Billion during 2021
• Indian imports: Canada’s Exports to India were US$2.38 Billion during 2021

• Top Exports from India: The main items exported by India to Canada are Jewellery, Cotton yarn, Organic chemicals, Coffee, Spices, Iron and steel articles, Textiles, Carpets, Floor spreads, and processed foods.
• Top Imports to India: The main products exported from Canada to India were Dried Legumes (S524M), Coal Briquettes (S406M), and Potassic Fertilizers (S365M).
  o Growth rate: During the last 25 years the exports of Canada to India have increased at an annualized rate of 8.81%, from $327M in 1995 to $2.7B in 2020.
• Economic Presence: More than 400 Canadian companies have a presence in India, and more than 1,000 companies are actively pursuing business in the Indian market.
• Bilateral Agreements: Canada also has an advanced suite of bilateral agreements and MOUs with India that touch on commerce, including:
  
  • Nuclear cooperation
  • Double taxation
  • Science and technology
  • Agriculture
  • Civil aviation
  • Energy
  • Education
  • Information and communications technologies
    

• India-Canada Comprehensive Economic Partnership Agreement (CEPA)
  • Relaunch of negotiations: The Ministers agreed to formally re-launch the negotiations for India-Canada Comprehensive Economic Partnership Agreement (CEPA) and also consider an Interim Agreement or Early Progress Trade Agreement(EPTA) that could bring early commercial gains to both the countries.
  • Collaboration on supply chain: The Ministers acknowledged the significance of establishing resilient supply chains in critical sectors and exchanged views on collaboration in this area.
  • Enhancing cooperation: They emphasised enhancing cooperation in sectors such as pharmaceuticals and critical and rare earth minerals as well as in areas like tourism, urban infrastructure, renewable energy and mining.

1. Strategic/Security
   • Renewables: Canada supports India’s energy security and environmental ambitions through increased exports of renewable energy and clean technology, with a focus on bioenergy, wind, hydro and solar, as well as water and sewage treatment.
   • Civil Nuclear Cooperation: A Nuclear Cooperation Agreement (NCA) was signed in 2010 and came into force in 2013. The Appropriate Arrangement (AA) for the NCA was signed in 2013, under which a Joint Committee on Civil Nuclear Cooperation was constituted.
   • Space Cooperation: ISRO and the Canadian Space Agency (CSA) signed two MOUs in the field of exploration and utilisation of outer space in October 1996 and March 2003. ANTRIX, the Commercial arm of ISRO, has launched several nanosatellites from Canada. ISRO in its 100th Satellite PSLV launched on 12 January 2018, also flewCanada’s first LEO satellite.
     • Benefit: It can also help ISRO tap the vast Canadian space market.
   • Counter-Terrorism: There is robust cooperation on counter-terrorism issues, particularly through the framework of the JWG on Counter-Terrorism.
     • Fact: The security cooperation was further enhanced with the Framework for Cooperation between India and Canada on Countering Terrorism and Violent Extremism signed by the NSA of India and the National Security and Intelligence Advisor of Canada on 14 February 2018
   • Uranium Exports: Canada 2015 agreed to supply 3,000 metric tonnes of uranium to energy-hungry India from this year under a $254 million five-year period.
     • Benefit: India’s rising Nuclear energy security for civilian and renewable purposes.
   • India-Canada Strategic Dialogue: It was co-chaired by former EAM Smt. Sushma Swaraj and her Canadian counterpart Chrystia Freeland were held on 22 February 2018 on the sidelines of PM Trudeau’s visit.
     • Benefit: Consolidating the common concerns facing both democracies like rise of China and unilateralism.

1. Social Sector
   • Social Infrastructure: Canada is also helping India meet its substantial urban and transportation infrastructure needs for roads, rail, airports, ports, dams and services segments through the provision of financing, equipment, technology and engineering services.
2. Education
   • Indian students studying in Canada: Recently India became the top source of foreign students with 203000 Indian students studying in Canada.
   • GIAN: 69 reputed Canadian faculty members have visited India, so far under the Global Initiative of Academic Works (GIAN) programme for teaching assignments in Indian institutions.
   • SPARC: Canada is one of the 28 countries covered under the Scheme for promotion of Academic and Research Collaboration (SPARC), an initiative aiming to improve research ecosystems in India’s higher education institutions.
3. Science and Technology
   • Research: Promoting commercial research and development and collaboration to drive innovation in sectors such as information and communications technologies, science, technology and innovation, digital industries, artificial intelligence, deep technology, machine learning and the internet of things (IoT)
   • Pharma Sector: Canada is focussing on opportunities for Canadian partnerships as suppliers in the Life Sciences sector to support India’s industry-leading presence in the pharmaceutical sector.
     • Benefit: This can also in turn lead to Canada being an eligible market for Indian Pharma exports.
   • Agriculture: The fifth (5) round of JWG on Agriculture was held on 13-14 November 2017. A Joint Working Group for Pulses has been set up separately.
   • Indo-Canadian Science and Technology cooperation: It has been primarily focused on promoting Industrial R&D which has potential for application through the development of new IP, processes, prototypes or products
   • IMPACTS Scheme: Department of Biotechnology under the IC-IMPACTS program implements joint research projects in health care, agri-biotech and waste management

1. Cultural
   • Film Festivals: Canada was the Country of Focus at the 48th International Film Festival of India held in Goa in November 2017.
   • Diaspora: Canada hosts one of the largest Indian diasporas in the world, numbering 1.6 million (PIOs and NRIs) which account for more than 3% of its total population.
     • Benefit: Remittances to India as well as showcasing India’s soft power.

Issues/Challenges to relations

1. Historical
   • NATO-NAM Issue: Canada’s status as a founding member of the North Atlantic Treaty Organization (NATO) was at odds with India’s Non-Aligned Movement (NAM) membership and its aim to maintain strategic neutrality between the two Cold War blocs
   • Kashmir: Faultlines first emerged in 1948 when Canada supported in the Indian state of Kashmir, a position that was antithetical to India’s interests. Differences over other issues of international importance further deepened the gulf between India and Canada.
     • Example: During the 60s John Diefenbaker’s Conservative Party-led government in Canada was considered to be closer to Pakistan under the leadership of Ayub Khan than to India.
   • Ideological: Canada was sympathetic to the US position on Vietnam in the International Control Commission established by the Geneva Conference in 1954, India was more sensitive to the interests of the Communist bloc.
   • Pokhran II: Canada viewed the Pokhran event as an act of betrayal by India, and policymakers in Ottawa were concerned that Indian nuclear tests would motivate other non-nuclear states to pursue similar capabilities.

1. Security
   • Khalistani Movement: India’s concerns about the presence of radical elements within the Canadian Sikh diaspora are rooted in the troubled history of its northern state of Punjab. Between the 1980s and 1990s, the Khalistan movement in Punjab threatened India’s territorial integrity and communal harmony.
     • Example: In 2010, for instance, Liberal MPs Sukh Dhaliwal and Andrew Kania introduced a petition in the House of Commons asking Ottawa to consider the 1984 riots as an act of genocide and discuss the issue with New Delhi.
     • India’s concerns about the presence of radical elements within the Canadian Sikh diaspora are rooted in the troubled history of its northern state of Punjab. Between the 1980s and 1990s, the Khalistan movement in Punjab threatened India’s territorial integrity and communal harmony.
   • Rising Indian Asylum Seekers: The 2018 report by the intelligence and analysis wing of the Canada Border Services Agency has complicated matters. According to the report, by mid-2018, asylum claims by Indian nationals had risen by 246 per cent.
     • Fact: “A frequent claim cited by Indian nationals is the fear of arbitrary arrest or abuse by the police based on accusations of supporting militant organizations.
2. Economic
   • Delayed Agreements: While the CEPA negotiations continue, there has been a delay in the FIPPA discussions, due to differences between India and Canada on issues such as the Investor-State Dispute Settlement.
   • Low Trade Volumes: Canada remains an insignificant trading partner for India. In 2017, compared to other North American countries, Indian exports to Canada stood at just over US$2 billion, behind the US and Mexico.
   • Canadian Public Perception: India must foster a deeper understanding of Canada and the potential it holds for India. While the Indian public perception of Canada seems positive, there is little understanding of Canada and its position in world affairs.
     • Data: According to a Pew Research Center survey, about 40 per cent of Canadian respondents believe that India plays a more important role in the world.

Way Forward

• Greater Collaboration: India must foster a deeper understanding of Canada and the potential it holds for India.
• Dehyphenated Approach: It will be helpful to develop a new framework of cooperation that is more pragmatic and emphasises mutually beneficial areas, such as trade, where opportunities lie and much work remains to be done.
• Diversified Energy Aid: Canada can also be a significant source of Liquified Natural Gas (LNG) for India; it is estimated that the latter will import 44 billion cubic metres of LNG by 2025. Amongst Indian investors, there has been an increased interest in Canada’s energy sector.
• Environmental Aid: Also, Canada’s experience in developing environment-friendly urban infrastructure can prove beneficial for India.
• Consolidate mandate-based Ties: India’s growing economy offers opportunities for a G-7 country such as Canada.