India-Canada to begin talk on Free Trade Agreement
- Indian Commerce minister and his Canadian counterpart to begin talks for a free trade agreement (FTA) between the two countries.
- The two sides had begun talks for a comprehensive economic partnership agreement in 2010.
- But it did not see much progress although the negotiations went on till 2017.
Focus of meeting
- Canada will focus on investment protection agreement as part of the comprehensive deal
- While India is focussed to discuss market access for agriculture, textiles, pharmaceuticals, and easing of technical and sanitary and phytosanitary barriers to trade.
- The negotiations for a comprehensive economic partnership may also cover investment and services
- However, India is looking for an early harvest or an interim trade deal before progressing with a full pact
India-Canada trade relations
- Canada is India’s 31st largest market, accounting for just $3 billion or 0.88% of India’s total outbound shipments in April-January 2021-22.
- India had a small trade surplus of nearly $200 million with Canada with imports worth $2.68 billion, and exports worth $2.9 billion in 2020-21
- Exports to Canada : Organic chemicals, pharmaceuticals, and apparel and textiles, Iron and steel
- Imports from Canada: vegetables and petro products
Cooperation in Energy sector
- In 2010, Both signed a Nuclear Cooperation Agreement (NCA) establishing the Joint Committee on Civil Nuclear Cooperation.
- Uranium supply agreement inked in 2015 when the Indian PM visited Canada.
Cooperation in S&T and Space sector
- ISRO and CSA (Canadian Space Agency) signed MOUs for collaboration in the field of space exploration and use.
- Many Canadian satellites have been launched by ANTRIX, ISRO's commercial arm.
Indian Diaspora
- The Indian diaspora in Canada is the world's eighth largest.
- In the 2019 federal elections, 23 Indo-Canadians (Punjab ties) elected as MPs.
- Both countries have estd. several organisations to boost coop. including Canada-India Parliamentary Friendship Group (CIPEG), Canada-India Business Council (CIBC),
- Canada-India Foundation (CIF), and Indo-Canada Chamber of Commerce (I-CCC).
Challenges
- Khalistani separatist factor: single most significant obstacle to India-Canada relations.
- Sikhs (~1%) make up a considerable component of the Indian diaspora. Few Canadian leaders support Khalistan cause for electoral advantages.
- Commerce Relations: Despite both being active in commerce for a long time, India's MEA claims that trade treaties are ""always underperforming.""
- Canadian Trade Policies are Being Feminised: Gender clauses included in trade agreement by Canadian govt. Perceived as a non-tariff barrier in countries like India.
- Bilateral agreements: CEPA and Investment Promotion and Protection Agreements (BIPPA) in works for some time, but far from finalisation.
- Strategic Location: Canada, surrounded by developed Western countries, cannot fully comprehend India which is bordered by hostile neighbours like China and Pakistan.
Way forward
- Feminisation clauses: Canada needs to understand and eliminate Feminisation clauses from trade agreements, or give India more time to finish obligations.
- Renewable energy usage: With a focus on renewable energy targets in INDCs, India needs to reach an agreement or MOU on renewable energy.
- Infrastructure and transportation are two areas where coop. and investment could be beneficial.
- Convergence on China: Canada has announced that it would diverge its trade relations and reject China's diplomacy. India has the potential to become a provider of goods.