India and Canada Eye Early Trade Deal Ahead of PM Modi’s December Visit
BENGALURU: India and Canada are intensifying efforts to seal a bilateral trade agreement before Prime Minister Narendra Modi’s scheduled visit to Canada in December. With both nations signaling high-level political intent, trade officials are working toward a definitive conclusion that could redefine the economic partnership between the two countries.
Canadian Minister for International Trade, Maninder Sidhu, announced in Bengaluru that negotiating teams are set to meet in New Delhi on November 9 for a critical round of talks. The objective is to finalize the deal before Prime Minister Modi’s visit to Canada on December 11-12. Sidhu expressed optimism regarding the progress, noting a palpable sense of momentum and “real energy” surrounding the discussions, which have been moving at a formal pace since August.
Trade Priorities and Sectoral Gains
The proposed agreement seeks to diversify trade baskets for both nations. Canada is primarily looking to expand its footprint in the Indian market for minerals, fertilizers, aerospace, and advanced manufactured goods. Conversely, New Delhi is pushing for improved market access for its labor-intensive sectors, including textiles, apparel, footwear, and furniture.
A significant area of focus for India is the information technology sector. Currently, Indian IT services account for only a marginal share—just over 1%—of total Canadian service imports. India aims to leverage this trade agreement to significantly increase its service exports to the North American nation, highlighting a key strategic goal for the domestic IT industry.
Investment Treaties and Taxation Hurdles
While the primary trade deal remains the immediate priority, discussions regarding a Bilateral Investment Treaty (BIT) are expected to take center stage once the trade agreement is formalized. However, this path is not without obstacles. A major point of contention remains India’s firm stance on excluding taxation-related matters from the treaty’s framework. Negotiators will need to navigate this sensitive issue to ensure a cohesive investment landscape that satisfies both Ottawa’s regulatory requirements and New Delhi’s policy constraints.
Deepening Financial Ties
The economic synergy between the two countries is already visible in the financial sector, as underscored by the recent move by Canadian holding company Fairfax to acquire a controlling stake in IDBI Bank. Valued at $5.6 billion, the deal stands as the largest financial transaction between the two nations to date.
Minister Sidhu cited this deal as a clear indicator of growing Canadian confidence in the Indian market. Beyond banking, Canadian pension funds, asset managers, and financial institutions have already funneled approximately $107 billion into India, targeting critical areas such as highway infrastructure, healthcare, technology, cleantech, and energy.
“From my conversation with the pension funds, they are looking to do more,” Sidhu noted, suggesting that the conclusion of a trade agreement would act as a catalyst for further capital inflows. As the November 9 deadline for the next round of negotiations approaches, both governments appear determined to transform these aspirations into a concrete policy framework that will bolster bilateral ties for years to come.
Disclaimer: This content is auto-generated for informational purposes only.
Source: Read Original News
