Business councils call on the federal government to secure trade agreement with India

As Canada and other Western nations ramp up their efforts to build stronger political and economic ties in Asia, business groups are calling on the federal government to finally lock in a trade agreement with India.

The Business Council of Canada and the Canada India Business Council released a report on Aug. 4 that looks at Canada’s current trading relationship with India and the economic benefits that would come from establishing a trade agreement.

The report, which includes analysis from Ciuriak Consulting commissioned by the two councils, calls India “one of Canada’s largest untapped trade opportunities” and compares its economy to where China was two decades ago.

The analysis finds that while trade with India has grown on average by nearly 12 per cent over two decades, Canada has lost its market share over the years.

“The best path forward is a comprehensive economic partnership agreement (CEPA) with India,” the report says, estimating that such an agreement would increase two-way trade by $8.8 billion a year and bring about an annual GDP boost of 0.25 per cent by 2035.

Trade negotiations between Canada and India began in 2010 under the Conservative government of former prime minister Stephen Harper.

Twelve years later, a deal has yet to be struck.

After years of no movement on reaching a deal, Canada and India announced in early 2022 that they resumed talks toward a comprehensive free-trade agreement.

The announcement was made following a trip to India by International Trade Minister Mary Ng.

Ng and her Indian counterpart, minister Piyush Goyal, agreed to relaunch negotiations with an effort to secure an early progress trade agreement, which would hold in the interim until progress is made on establishing a comprehensive trade agreement.

The two ministers have been holding monthly calls since the visit to further talks.

According to a senior government official with knowledge of the negotiations, an early progress trade agreement is expected to be reached in the coming months.

The official, who spoke on condition of anonymity to share information not yet public, said the agreement will avoid contentious trade-related issues that would require more time to negotiate.

The potential for an agreement comes as the federal government works toward releasing its Indo-Pacific strategy, which will aim to further its political and economic reach in the region.

India’s pursuit of trade deals comes as many countries, Canada included, are taking stock of their position with China amid growing concerns about human rights.