Commerce Minister Piyush Goyal and his Canadian counterpart Mary Ng will meet in New Delhi on Friday to initiate talks for a free trade agreement (FTA) between the two countries. Negotiations for a Comprehensive Economic Partnership may also include investments and services. However, India is looking for an early harvest or an interim trade deal before going ahead with a full deal.
“India and Canada are set to start FTA talks on Friday. A government official said, “We will go ahead with the same strategy that we have with other developed countries for early harvest deals.”
While Canada is considering an investment protection agreement as part of a wider deal, India is keen to discuss market access for agriculture, textiles, pharmaceuticals and easing of technical and sanitary and phytosanitary barriers to trade.
“India-Canada talks will be officially launched by trade ministers in New Delhi,” one of the two officials cited above said on condition of anonymity.
The launch of the trade talks comes in the backdrop of worsening geopolitical tensions following the Russian invasion of Ukraine, which has affected global trade. Earlier in 2019, India had decided to exit the Regional Comprehensive Economic Partnership (RCEP) citing “important outstanding issues that remain unresolved”. The domestic sector had argued that it could be affected by cheaper alternatives from other countries.
The two sides began negotiations for a Comprehensive Economic Partnership Agreement in 2010, but did not make much progress, although negotiations lasted until 2017. This time around, the two sides may consider signing a mini trade deal or an early harvest deal. , which keep difficult and sensitive issues to be dealt with later as part of the full agreement.
Canada is India’s 31st largest market, accounting for just $3 billion or 0.88% of India’s total outbound shipments in April-January 2021-22. Imports from the North American nation stood at $2.5 billion during the period, accounting for 0.52% of India’s total inbound shipments. With imports of $2.68 billion and exports of $2.9 billion in 2020-21, India had a small trade surplus of around $200 million with Canada.
Organic chemicals, pharmaceuticals, and apparel and textiles have been India’s top exports to Canada, with shipments of $198 million and $261 million and $210 million in the April-January period of 2021-22. Iron and steel exports to Ottawa amounted to $300 million.
Imports from Canada included vegetables and petrochemicals worth $343 million and $542 million, respectively.
Mint had earlier reported that India is keen to have a stronger service agreement under the proposed CEPA as Canada is not a large market for Indian goods. In addition, India is looking to create more jobs for its IT professionals by facilitating easy work visas for Canada under the trade agreement.
dilasha.seth@livemint.com
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