India-Canada to begin talk on Free Trade Agreement

Contact Counsellor

Last Updated07/03/2022

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.

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

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

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.

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.

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).

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.

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.