India-Canada second round free-trade agreement talks start next week

Canada is expected to seek greater market access for agricultural products such as pulses. Both nations may steer away from including sensitive items such as dairy in the trade deal

Officials from India and Canada are expected to meet virtually next week to commence the second round of negotiations for a free-trade agreement (FTA) that aims to strengthen economic ties between the two countries.

India is expected to push for greater market access for pharmaceutical products, readymade garments, agriculture goods and easier movement of skilled workers, to create more jobs for its IT professionals, people aware of the matter said. Canada is expected to seek greater market access for agriculture products such as pulses. Both nations may steer away from including sensitive items such as dairy in the trade deal, they said.

“The first round of negotiations happened soon after the fifth Ministerial Dialogue on Trade and Investment, where broader issues were discussed. There will be more clarity on the way forward as something more concrete is expected after the second round of discussions,” one of the officials cited above said.

India and Canada had launched negotiations towards a comprehensive economic partnership agreement (CEPA) in 2010. However, no headway was made even after the 10th round nearly five years ago.

A joint statement released by India and Canada in March stated that both the countries are looking to finalise an interim or an early progress trade agreement (EPTA). A spokesperson from the High Commission of Canada said that while India has rolled out various reform measures over the last few years, uncertainty caused due to unpredictable tariff rates in India’s agriculture sector are some of the hurdles faced by the exporters from Canada. "Canada is happy to note that India is steadily moving up the ranking of the World Bank’s ‘Ease of Doing Business’. This has been possible, in part, as a result of some Government of India initiatives such as the establishment of the National Investment Promotion and Facilitation Agency, Similarly, the amalgamation of various taxes into one GST has been welcomed by the business community and has facilitated trading across state borders. The debt and insolvency law, as well as implementation of the PLI, are being used by some Canadian producers in India,” the spokesperson told Business Standard.

“However some challenges still exist, mostly at the local and state level, such as permit approvals, land acquisition, supply-chain unpredictability, and high tariffs. And in the agricultural sector, unpredictable tariff rates and quantity restrictions can cause uncertainty,” the spokesperson said.

Canada was India’s 36th largest trading partner in FY22. India exported goods worth $3.76 billion to Canada, while importing goods worth $3.13 billion in the financial year 2021-22.