This unique instance of diplomatic friction with a Western nation arises at a time when India enjoys rich, multi-faceted ties with Canada, spanning trade, education, and personal exchanges. Any strain in this association could potentially have spill-over effects that may reverberate across the international community.
Canada’s financial engagement in India is noteworthy. As per the data from the Indian Department for Promotion of Industry and Internal Trade (DPIIT), between April 2000 to June 2023, Canada contributed 0.5644 percent ($3,642.5243 million) of the total Foreign Direct Investment (FDI) equity inflow of $645,386.0884 million in India. Despite constituting a small slice of India’s total FDI, disruptions in this avenue due to the discord could impact specific sectors dependent on Canadian investments.
Canada has also been a chosen destination for the Indian diaspora and students. With 5.26% of overseas Indians residing in Canada and a significant number of Indian students choosing Canada for their overseas education, this diplomatic discord could potentially strain these human connections. The bilateral tourism sector might also experience a downturn. In 2021, Canada emerged as the fourth largest source of tourists in India, with a significant number being members of the Indian diaspora.
Trade relations have been balanced and beneficial, albeit not massive. The bilateral trade during 2022-23 stood at $8,161.02 million, making up a modest 0.70% of India’s total trade. The balanced nature of this trade, with India enjoying a slight trade surplus, suggests a symbiotic relationship now at risk.
The crux of the trade comprises essential commodities like coking coal, potassium chloride, lentils, newsprint, and wood pulp imported from Canada, and medicines, vannamei shrimp, smartphones, jewelry, and more exported to Canada.
Among these, coking coal and potassium chloride are critical for India’s steel and fertilizer industries respectively, making Canada a significant trade partner. The ongoing dispute could threaten the steady supply of these vital resources, pushing India to seek alternatives, potentially reshaping global trade routes and alliances.
This dispute also puts a strain on India’s relations with the Western world, considering this is a unique situation in India’s diplomatic history. The global trade community will be keenly watching as the scenario unfolds, the repercussions of which might echo far beyond the borders of the two nations involved.
As Canada and India navigate through this diplomatic challenge, the stakes are high not just for them, but for the larger global trading ecosystem. The dispute accentuates the delicate interplay of diplomatic relations and global trade, the dynamics of which could sway in unpredictable directions in the coming times.
DON’T MISS IT | India-Taiwan Trade Ties to New Level
