However, tension between India and Canada has increased in the last few years. But trade between the two countries is good, which means trade is running smoothly. In fact, the tension at the diplomatic level will now affect trade as well. The main reason for tension at this time is the activities of pro-Khalistan organizations. India says that the Canadian government has failed to take action against Khalistanis.
However, amid tension and statements, Canadian Prime Minister Justin Trudeau reached India to attend the G-20 conference held in India. After attending the conference, Trudeau stayed in India for two days. Because his private plane was damaged. Due to this, Trudeau was criticized a lot. India alleges that the Trudeau government has failed to crack down on Sikh separatists operating in Canada.
Trudeau was criticized in G-20
Now the tension between the two countries is directly impacting trade. Because as soon as Justin Trudeau returned to Canada after attending the G-20 meeting, he announced the end of the trade mission with India. He did not give any reason for this. He only said that trade treaty negotiations with India have been stopped. Due to which doing business with Canada is no longer easy. However, imports and exports between India and Canada are almost equal.
India was Canada’s 10th largest trading partner in 2022. In the financial year 2022-23, India exported goods worth $ 4.10 billion to Canada. Whereas Canada exported goods worth $4.05 billion to India in 2022-23. A year before this, in 2021-22, India had exported $3.76 billion to Canada. Whereas in the year 2021-22 the import figure stood at 3.13 billion dollars. Bilateral trade between the two countries was seven billion dollars in the year 2021-22, which has increased to $8.16 billion in the year 2022-23.
Not only this, due to ease of trade between India and Canada, India has also made huge investments. Canadian pension funds have invested $55 billion in India. Whereas Canada has made direct investment of 4.07 billion dollars in India since 2000. At least 600 Canadian companies are currently operating in India, while over 1000 companies are in line to enter India.
If we talk about India, Indian IT companies have a big business in Canada. Apart from this, Indian companies are active in software, natural resources and banking sectors.
What does India buy from Canada?
Let us tell you what things are bought and sold between India and Canada. Canada mainly buys jewellery, precious stones, pharmaceutical products, ready-made garments, organic chemicals, light engineering goods and iron and steel products from India. While Canada sells pulses, newsprint, wood pulp, asbestos, potash, iron scrap, minerals and industrial chemicals to India. Trade between the two countries is almost equal.
India is a big market for Canada. India mainly buys pulses from Canada. At present, about 230 lakh tonnes of pulses are consumed annually in India whereas the production is less than this. Therefore, the Indian market can prove to be the best option for Canada. Canada is a major producer of peas, and India was looking to export again. But now the path has become difficult.
impact of stress on business
Apart from this, both the countries had come very close regarding FTA which now seems to be in trouble. In fact, FTA was to prove to be a milestone in increasing trade between the two countries. India and Canada launched fresh talks on a comprehensive trade agreement in March 2022 for a new opportunity to boost trade and investment. It was also decided that the Early Progress Trade Agreement (EPTA) would be the first step after the Comprehensive Economic Partnership Agreement (CEPA). According to the information, so far 6 rounds of talks have taken place between the two countries on this issue. But now this matter will be resolved again.
What is FTA?
Two countries that enter into an agreement under an FTA have tariffs significantly reduced or eliminated on most goods traded between them. Indian companies are seeking duty-free access to Canadian markets for their textile and leather goods. Apart from this, India is demanding Canada to ease professional visa rules. On the other hand, Canada wants to open the Indian market for its dairy and agricultural products. But now the talks are stalled due to tension.
How is the economic situation of Canada?
Canada is an economically strong country. A large part of its economy is based on the mining of natural resources such as gold, zinc, copper and nickel which are widely used around the world. Canada is also a big player in the oil business with several major oil companies. However, people of Indian origin contribute significantly to the Canadian economy.