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India-Canada Trade Suspended: Impact, Causes, and Outlook.



  Sep 26, 2023

India-Canada Trade Suspension



Why were trade negotiations suspended between India and Canada?

Diplomatic Meeting: Trade negotiations were suspended following a diplomatic dispute between India and Canada.
After Prime Minister Justin Trudeau's return from the G20 meeting in New Delhi, Canada postponed a trade delegation's visit to India,
which was set to discuss the Early Progress Trade Agreement (EPTA).

How does this suspension affect the economic interests of both countries?

Economic Graph: At least for now, the suspension of trade negotiations is unlikely to significantly impact the economic interests of India or Canada.
Bilateral merchandise trade between the two nations is around $8.16 billion, a relatively small portion of their total trade volumes.

What was the potential impact of the Comprehensive Economic Partnership Agreement (CEPA)?

Trade Agreement: Industry experts had estimated that the conclusion of CEPA could have nearly doubled bilateral trade figures in the next few years.
However, this growth would not have represented a substantial portion of India's total merchandise trade, which is close to $1.2 trillion.

How are investments between the two countries affected?

Investment: Over 600 Canadian companies have invested in India, and about 30 Indian companies operate in Canada.
These investments are unlikely to be significantly impacted by the current diplomatic tensions, as they are driven by commercial considerations and long-term interests.

What is the concern regarding persons of Indian origin in Canada and Indian students?

Indian Community: Approximately two million persons of Indian origin live in Canada, along with Indian students and young people on temporary visas.
The future of these individuals, including their aspirations for citizenship and their families in India dependent on remittances,
faces uncertainty due to deteriorating bilateral relations.

How might the diplomatic crisis impact the harmony between different communities in Canada and relations in India?

Community Relations: The diplomatic crisis could strain relations between persons of Indian origin in Canada and other Canadians.
There may also be consequences for certain sections of people living in India due to the deteriorating quality of dialogue between the two countries' leaders.

What is the suggested way forward?

Diplomacy: Leaders in both India and Canada should consider toning down aggressive rhetoric and pursuing quiet diplomacy.
Encouraging bilateral trade and people-to-people exchanges can help build bridges between the two nations,
given their shared democratic values and interests in the context of a rising China.
Please note that the situation is dynamic, and outcomes may change based on diplomatic developments.


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