Despite recent turmoil in diplomatic relations, trade and investment ties between India and Canada remain on solid footing, thanks to deep-rooted economic partnerships and shared commercial interests, assert experts.
Ajay Srivastava, Co-Founder of the Global Trade Research Initiative (GTRI), emphasised that the economic relations between the two nations are primarily driven by commercial dynamics and not fleeting political events. He noted that the complementary nature of the traded products — India’s pharmaceuticals, gems, and textiles meeting Canada’s demand, and Canadian pulses, timber, and mining products finding a market in India — could be a stabilising factor.
The diplomat expulsion incident on Tuesday comes on the heels of serious concerns expressed by Indian Prime Minister Narendra Modi to his Canadian counterpart Justin Trudeau about extremist activities in Canada. Despite this, Srivastava remains optimistic that the deep-rooted people-to-people connections and the burgeoning trade that reached USD 8.16 billion in the fiscal year 2022-23 will stand resilient amidst political oscillations.
Sharad Kumar Saraf, the Chairman of Technocraft Industries in Mumbai, echoed similar sentiments, highlighting that political turmoil is temporary and should not overshadow business ties grounded in firm commercial interests. Saraf urged leveraging bilateral trade as a potent tool for mending and fostering political relations, drawing parallels with India’s substantial trade engagements with China despite political frictions.
The encouraging trend extends to investments, with Srivastava indicating that Canadian pension funds, buoyed by lucrative returns and India’s vast market, continue to exhibit a strong investment presence in India, directed mainly towards infrastructure, renewable energy, technology, and financial services sectors. As of 2022, India was the fourth-largest global recipient of Canadian FDI, with an investment portfolio exceeding USD 45 billion. Education partnerships, a cornerstone of India-Canada relations, are expected to remain unaffected, providing a further buffer to the existing diplomatic unease. The alliances between educational institutions across the borders are notably robust, facilitated by a significant Indian student population contributing USD 4.9 billion to the Canadian economy in 2021. Both Srivastava and the Canadian Bureau for International Education (CBIE) affirm the mutual benefits derived from these educational ties, hinting at a resilient foundation that could weather the present diplomatic discord.
As experts advocate for sustained efforts to bolster bilateral trade, eyes are on the evolving landscape, with hopes that economic prudence will triumph over transient political disruptions, maintaining a thriving and mutually beneficial relationship between India and Canada.