New Delhi: India doesn’t expect an immediate impact on its trade ties with Canada due to the disrupted diplomatic relations and there is nothing to worry about at present, officials said, adding that the government doesn’t expect Canadian pension funds to change stance.”We don’t expect an immediate impact. The bilateral trade isn’t that big to significantly impact the overall trade basket,” said an official, adding that New Delhi’s recent trade talks with the US and the UAE indicated readiness for more investments in India.On Monday, New Delhi decided to withdraw its high commissioner from Canada, marking an escalation in the diplomatic tensions that began in September 2023 when Canadian Prime Minister Justin Trudeau accused India of involvement in the killing of a Canadian citizen and Sikh separatist leader. This allegation led to a back-and-forth expulsion of diplomats and paused the talks for a free trade agreement (FTA).Bilateral merchandise trade between India and Canada grew slightly during this period, to $8.4 billion in FY24 from $8.3 billion in FY23. India’s imports from Canada increased to $4.6 billion, while exports saw a marginal dip, falling to $3.8 billion.”These figures suggest that, at least for now, economic ties remain stable, unaffected by the diplomatic storm brewing in the background… But as this dispute drags on, both nations will need to carefully manage their actions to avoid a full-blown economic fallout,” said Ajay Srivastava, founder of think-tank Global Trade Research Initiative (GTRI), emphasising the resilience of the bilateral trade.Despite these significant political frictions, the on-ground impact on trade between the two countries has been minimal. This is largely because trade happens at the private sector level, and neither India nor Canada has introduced regulations that restrict the flow of goods or services.”Ample opportunities exist for Indian businesses and students abroad,” the official said, adding that industry from the western world indicated opportunities worth $3 trillion chasing India.Officials also said that the diplomatic row may be an opportunity for India to be able to diversify its lentils imported from Ottawa and buy more from Australia under the quota given to the island nation as part of the Australia-India Comprehensive Economic Cooperation Agreement.”India must start exploring new sources of pulses and fertilisers because we import around 25% of the pulses from Canada,” said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO), adding that alternative suppliers such as Mozambique, Myanmar, Australia and Tanzania could be tapped for pulses.New Delhi sources about 5% of its fertiliser requirements from Canada and other producers like Russia and Oman could be explored.”In other words, while diplomatic relations may have soured, businesses on both sides have continued to engage, insulated from the political noise,” Srivastava said.
Source link
Follow Us:
https://facebook.com/gagab2b
https://youtube.com/gagab2b
https://gagab2b.com
