In a new report, two major Canadian business groups have called for Canada to develop a “comprehensive India strategy” so as to unlock the potential of bilateral economic ties.
The report, released on Thursday by the Business Council of Canada and the Canada-India Business Council noted, “India represents a vital door to the future in global trade”.
The report cited data from Ciuriak Consulting which stated that Canada’s global share of two-way goods trade with India has eroded from 1.02% in 2001 to 0.81% in 2021. Over the past two decades, Canada has captured just 1% of the growth in global exports of goods, services and intellectual property destined for India. Bilateral investment is also under-developed, a worrying sign at a time when India is poised for an investment boom.
“Canada has been punching well below its weight in one of the major global markets,” Ciuriak Consulting concluded.
It warned against Canada missing in action as it has through its absence from the Indo-Pacific Economic Framework for Prosperity, launched by US President Joe Biden earlier this year, as an effort to counter China’s growing influence in the region.
“Canada could, and should, be doing much better. Ciuriak Consulting estimates that if our trade with India was on par with the business we do with similar-sized economies in the rest of the world, our exports would be nearly 2 ½ times higher than now. That represents more than US$3 billion a year in lost export opportunities,” it said.
Of course, the Early Progress Trade Agreement (EPTA), currently under consideration, will help bridge the gap, but even better will be the Comprehensive Economic Partnership Agreement (CEPA).
It suggested that a free trade agreement “has the potential to deliver a greater economic boost to Canada than the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a deal which has succeeded in strengthening trade ties with 10 other countries in the Asia-Pacific”.
“Simply put, there is no path to a successful Indo-Pacific strategy without going through India,” Business Council of Canada President and CEO Goldy Hyder said, in a release. He added, “Canada should move quickly to become one of the first advanced economies to secure a comprehensive trade and investment agreement.”
“India is experiencing a massive economic surge and Canadian companies should have an actionable strategy to take advantage of this unique window of opportunity,” Canada-India Business Council President and CEO Victor Thomas stressed.
“Signing a free trade agreement with India would give Canadian companies and investors a leg up over competitors from many other countries. By the same token, failure to act soon would leave Canada at a disadvantage,” the report cautioned.