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India paused trade talks with Canada over Khalistan row after Trudeau G20 visit

India has already paused negotiations for a comprehensive free trade agreement (FTA) with Canada, which is not a “strategically” important country for nation’s commodities’ requirements as bilateral merchandise trade between the two countries was a mere $8 billion in FY23, with exports and imports almost evenly balanced, two officials said.

Canada Prime Minister Justin Trudeau leaves the House of Commons on Parliament Hill in Ottawa, Ontario. (AP)

Canada is allowing its land to be used by subversive elements against India. However, since India’s imports from the country can easily be substituted from any other friendlier supplier in the country’s national interest, New Delhi does not have to solely rely on Canada for key commodities, the officials who asked not to be named said.

“Even our bilateral trade is not significant,” one of them said. In 2022-23, India exported merchandise worth $4.11 billion to Canada and imported goods, such as coal, fertiliser, pulses, pulp and aluminium worth $4.17 billion, according to official data.

India’s exports to Canada fell year-on-year by over 20% to $1.24 billion in the first four months of current financial year (FY24). Imports also contracted by 6.39% in the same period at $1.32 billion, according to official data.

India exports pharmaceuticals, iron products, telecom equipment, garments, marine products, auto components, iron and steel to Canada.

HT on September 16 reported that New Delhi suspended free-trade talks with Canada as Ottawa was encouraging subversive elements who are carrying out anti-India activities on its soil. The development came just days after Prime Minister Narendra Modi conveyed to his counterpart Trudeau strong concerns about anti-India elements promoting secessionism during Canadian PM’s India visit earlier this month.

India-Canada FTA negotiations were progressing well before the pause. The ninth round was held from July 12 to July 21 in a virtual format. The two countries had, so far, discussed matters related to goods, trade remedies, rules of origin, origin procedures, services, institutional and core provisions. The previous and the sixth ministerial dialogue on trade and investment (MDTI) was held on May 8 in Canada.

Also Read: India may expel Canadian official in reply to Trudeau govt action on Nijjar killing

India was negotiating an interim Indo-Canada Early Progress Trade Agreement (EPTA), which would have finally culminated into a Comprehensive Economic Partnership Agreement (CEPA) or a wide-ranging FTA. After the relaunch of FTA negotiations between India and Canada in March, 2022, nine rounds of negotiations had already been held until July this year.

Canadians have made huge investments in India due to the growth potential of the Indian market and its robust economy. According to official data, Canadian Pension Funds have cumulatively invested over $55 billion in India and are increasingly viewing India as a favourable destination for investments. More than 600 Canadian companies have a presence in India and more than 1,000 companies are actively pursuing business in the Indian market.

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