India-Canada conclude trade & investment dialogue on IT, smart cities

India and Canada held the fifth Ministerial Dialogue on Trade & Investment (MDTI) in New Delhi on March 11, 2022. The Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, Government of Canada and Indian Minister of Commerce and Industry, Consumer Affairs and Food, and Public Distribution and Textiles, Piyush Goyal, co-chaired the MDTI. The Ministers underlined the robust trade and economic relationship between India and Canada and resolved to further strengthen the bilateral ties and economic partnership.

The Ministers expressed satisfaction over the strong recovery of bilateral trade in 2021 after the economic contraction as a result of the COVID-19 pandemic, with bilateral trade in goods reaching US$ 6.29 billion registering a growth rate of 12% as compared to the previous year. The Ministers emphasized the contribution of the services sector in furthering the bilateral relationship and noted the significant potential for increasing bilateral services trade. The Ministers also appreciated the impressive growth of two-way foreign direct investment and its contribution to deepening economic and trade ties. The Ministers welcomed various reforms and initiatives taken by both countries to improve the business ecosystem and make it investor-friendly.

The Ministers highlighted the existing trade complementarities between India and Canada and recognised the need to expand bilateral trade through unlocking the potential across priority and emerging sectors both in goods and services. They reaffirmed their commitment to strengthen trade and commercial ties through enhanced partnerships and cooperation in identified areas such as information technology, electronics, automobiles, energy, minerals and metals, urban development, and others.

The Ministers underlined the significance of the MDTI as an institutional mechanism for forging robust bilateral trade and investment ties and enhancing economic cooperation between both countries. Recognising the need for a comprehensive trade agreement between the two countries that would help in bolstering trade, investment and further strengthen the bilateral relationship, the Ministers agreed to formally re-launch the India-Canada Comprehensive Economic Partnership Agreement (CEPA) negotiations. Both sides agreed to consider an interim agreement or Early Progress Trade Agreement (EPTA) that could be concluded early as a transitional step towards the CEPA. Ministers agreed that an EPTA would be consistent with Article XXIV of the General Agreement on Tariffs and Trade. Ministers further agreed that EPTA shall include high level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover any other areas mutually agreed upon. Furthermore, Canada and India agreed to promote and protect bilateral investment, including through the intensification of negotiations toward a Bilateral Investment Agreement, while considering options to achieve this goal alongside CEPA.

Both sides expressed interest in cooperation in urban development and infrastructure including smart cities and physical infrastructure, especially water supply, sewerage, power and roads; skill development, transfer of technology and R&D in the construction sector.

The Ministers noted the significant movement of professionals and skilled workers, students, and business travellers between the two countries, and its immense contribution to enhancing the bilateral economic partnership. Both sides agreed to continue to discuss ways to support the innovation ecosystem in both countries. India welcomed the recent announcement by Canada easing the COVID-19 testing regulations for travellers from India. The Ministers agreed there is significant potential to strengthen science, technology and innovation collaboration between their research and business communities in support of a sustainable economic recovery and the prosperity and wellbeing of their citizens.

The Ministers also acknowledged growing concerns about challenges to global supply chains, including disruptions linked to the COVID-19 pandemic, and discussed the continued importance of working together to promote the international rules-based order and supply chain resilience in critical sectors. They emphasised enhancing cooperation in sectors such as critical and rare earth minerals for mutual benefit. The Ministers welcomed the export in potash from Canada to India and collaboration within the sector, demonstrating Canada as a strategic and reliable partner.

Reaffirming their commitment to the rules-based, transparent, non-discriminatory, open, and inclusive multilateral trading system embodied by the World Trade Organization, the Ministers agreed to work together to further strengthen it.

The Ministers agreed to remain engaged to provide sustained momentum to building linkages and strengthening cooperation across sectors to harness the full potential of the trade and investment relationship between India and Canada.

CT Bureau