India-Canada relations: how could trade be affected as tensions rise? 

NEW DELHI, Sept 19 (Reuters) – Commerce talks between India and Canada have taken successful as rigidity rises after Prime Minister Justin Trudeau mentioned authorities had been investigating “credible allegations” linking New Delhi’s brokers to the homicide of Sikh separatist chief, Hardeep Singh Nijjar.

On Tuesday, New Delhi dismissed the allegations as “absurd”, and requested Canada as a substitute to crack down on anti-India components working in its territory.

Here’s what is at stake for each international locations:

HOW ARE TRADE TALKS AFFECTED?

Canada mentioned this month it had paused talks on the proposed treaty with India, simply three months after each mentioned they aimed to seal an preliminary pact this yr.

Trade estimates present the Complete Financial Partnership Settlement (CEPA) between Canada and India might increase two-way commerce by as a lot as $6.5 billion, yielding a GDP acquire of $3.8 billion to $5.9 billion for Canada by 2035.

WHAT ARE THEY KEY ITEMS OF TRADE?

Regular progress has seen items commerce rising to $8 billion in 2022, with Indian exports to Canada touching $4 billion and imports from Canada additionally price $4 billion.

India’s rising demand for imported lentils has benefited Canadian farmers, whereas Indian pharmaceutical and software program corporations have expanded their presence within the Canadian market.

Main imports from Canada embrace power merchandise resembling coal, coke and briquettes, moreover fertilizers, whereas India exports client items, clothes, engineering merchandise resembling auto elements, plane tools, and digital objects.

WHAT IS THE INVESTMENT POSITION?

Canada is India’s seventeenth largest overseas investor, pouring in additional than $3.6 billion since 2000, whereas Canadian portfolio buyers have invested billions of {dollars} in Indian inventory and debt markets.

The Canadian pension fund, CPP, has elevated its funding in Indian markets to about $15 billion, in areas resembling actual property, renewables, and the monetary sector by the top of final fiscal yr in March 2023.

HOW HAVE CORPORATES BENEFITED?

Greater than 600 Canadian corporations, together with Bombardier and SNC Lavalin, have a powerful presence in India, whereas greater than 30 Indian corporations, resembling infotech majors TCS, Infosys, Wipro have invested billion of {dollars} in Canada, creating 1000’s of jobs.

WHAT IS THE ROLE OF INDIAN STUDENTS IN CANADA?

Since 2018, India has been the most important supply nation for worldwide college students in Canada.

In 2022, their quantity rose 47% to just about 320,000, accounting for about 40% of whole abroad college students, the Canadian Bureau of Worldwide Schooling says, which additionally helps universities and schools present a subsidised training to home college students.

WHAT ARE THE IMPLICATIONS FOR SIKHS?

Many analysts say the worsening ties might have an effect on the financial pursuits of 1000’s of Sikh households in India’s Sikh-majority state of Punjab within the north, since they’ve relations in Canada, who remit hundreds of thousands of {dollars} again residence.

The share of Canada’s Sikh inhabitants has greater than doubled in 20 years, to 2.1%, in response to the nation’s 2021 census, as giant variety of Sikhs have migrated from India in the hunt for larger training and jobs.

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