(MENAFN- KNN India)
Trade Concerns Loom As India-Canada Lock Horns Over Political Issues
New Delhi, Sept 22 (KNN)
The widening rift between India and Canada over political issues has raised concerns about its potential impact on foreign trade.
The diplomatic relations between both the countries have become sour and could have possible ramification of trade.
Currently, the India-Canada FTA negotiations have been put on hold, and progress is expected only after existing issues are settled.
After being relaunched in March 2022, nine rounds of negotiations for the India-Canada Comprehensive Economic Partnership Agreement were held till July.
Although Canada ranks as the world's ninth largest economy and India as the fifth largest in terms of GDP, it is the services that take precedence over merchandise trade, and significant potential for growth exists in both sectors, reported BQ Prime.
While Canada ranks 31 in merchandise exports from India, it ranks 30 for imports.
In the current fiscal, between April and July 2023, exports to Canada amounted to USD 1.2 billion, making up 0.9 per cent of all merchandise exports. This was 20 per cent lower than a year ago amid a broader decline in merchandise exports because of the global slowdown.
Imports, too, have been easing. Between April and July 2023, merchandise imports from Canada fell to USD 1.4 billion, 6.4 per cent lower than imports over the same duration a year ago.
Imports from Canada made up 0.6% of all merchandise imports.
Pharmaceutical products made up the largest export component to Canada at USD133 million between April and June 2023.
While there are concerns regarding the impact of the fallout on foreign trade so far, differences between both nations are largely political and are expected to subside, said Arun Garodia, chairman, Engineering Export Promotion Council.
“Even though exports to Canada are limited, every dollar earned is business,” he added.
Earlier this year both the countries in a joint statement highlighted the contribution of the services sector to furthering the bilateral relationship and noted the significant potential for increasing bilateral services trade.
Union Minister of Commerce and Industry Piyush Goyal and Mary Ng, Canadian Minister of International Trade, said that the trade-related strengths of India and Canada are complementary and that real potential exists for trade in both goods and services to expand significantly in both traditional and emerging sectors.