Canadian efforts to boost trade with India

When the federal budget was announced last month, much emphasis was placed on improving trade with growing economies, specifically India. This comes as no surprise. India has a relatively high growth rate in what feels like an epidemic of recessions. But some experts believe that money and effort spent on increasing trade with India may not yield the results the Canadian government is hoping for.

Vivek Dehejia is among the sceptics. A professor of economics specializing in trade at Ottawa’s Carleton University, Dehejia is currently conducting research in Mumbai, India. He is also a contributing writer to the New York Times India blog. He says that while India is very much on Canada’s priority list, the reverse is not true as far as trade is concerned.

“Canadian business and Canada in general has a fairly low profile in India,” says Dehejia. “We are pretty low on the radar screen.”

We may be hearing applause on increasing trade numbers with India, but Dehejia cautions us to look at them closely. “If you look at the trade between Canada and India, it’s miniscule, it’s tiny,” he says. “It’s less than one percent of the total trade that each country does. So when the folks at DFAIT (the Department of Foreign Affairs and International Trade) tell us that trade with India has jumped – it’s doubled, is their most recent claim – sure, it’s doubled from almost zero to slightly more than zero.”

Professor Dehejia questions the government’s motives. “I do understand why it appears in the budget statement and I also understand why Minister Ed Fast (the Minister of International Trade) has talked about the importance of the bilateral trade relationship with India, because, to some extent, it’s driven by the importance of the large Diaspora,” he adds.

Dehejia says hard business deals don’t happen because people in Canada like people in India, or some of us may have relatives there, or we all love samosas. That’s not the way things work in real life. Appealing to the over one-million strong and vibrant Indian diaspora in Canada is good for votes, and good economics doesn’t necessarily make good politics.

According to Dehejia, trade makes up about 60 percent of the total Canadian economy, and, of that, about three quarters is trade with one country: our neighbours to the south. However, Canada does have a competitive advantage in certain sectors.

Arvind Vijh, the Director of the India Services Group at Deloitte Canada, agrees. “The biggest component of our trading relationship is around food and food products, specifically lentils and pulses and other products that come from provinces like Saskatchewan. That speaks to one of the key needs for the Indian economy: their search for food security. With a growing population, that’s always one of the areas that they’re looking for.”

Vijh believes food security and fuel security are also priorities for India. A growing country needs energy, and Canada can provide it. He also sees infrastructure as an area with tremendous growth potential.

“If, as Canadians, we focus on these areas, then in the medium to long term, we will succeed because Canada has a lot to offer India, and in return we can learn a lot from India,” Vijh asserts.

But he cautions that growing a trade relationship takes time and hard work, but concedes that both the government and the private sector in Canada are making concerted efforts in this respect. And it's not just the federal government that's doing so. Vijh says provincial governments and even cities are moving in this direction.

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