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A Drop In The Ocean-India To Invest 1 Billion Dollars In Canada
A one-billion-dollar investment announcement for the Canadian PM’s visit is just a drop in the ocean. There is a trade influx of 2 billion dollars daily on the Canadian-American border. So a visit of the PM to India (the first one after he assumed office) should reap higher dividends
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Canadian PM Justin Trudeau on Tuesday announced that corporate India has committed to invest 1-billion-dollar worth of investment in Canada leading to upto 5000 jobs to be created in the country.
The announcement from Trudeau came after he held meetings with Indian corporate giants and industry leaders including Tata Group chairman N.Chandrasekaran; Birla Group chairman Kumar Mangalam Birla; Mahindra group chief Anand Mahindra; Salil Parikh of Infosys, and Cyrus Mistry of the Pallonjee Mistry group, among others.
He also held a roundtable premier women business leaders in India including the ICICI Bank Chief Chanda Kochhar and Swati Piramal of the Piramal Group.
1 Billion Dollars- What do you mean?
Of what it looks superficially the numbers are not as powerful as they seem. A one-billion-dollar investment announcement for the Canadian PM’s visit is just a drop in the ocean. There is a trade influx of 2 billion dollars daily on the Canadian-American border. So a visit of the PM to India (the first one after he assumed office) should reap higher dividends. Given India’s strong ties with Canada and its position the global front. The two countries have not tapped the wide trade potential and it doesn’t look like it would happen at least during this visit. At present, India ranks 100 on ease of doing business and has a rapid growing economy at a rate of seven per cent.
Trudeau has made these announcements after meetings with the biggest industry stalwarts of the country. Does that mean it is a reaction of the Indian government to the Canadian Premier’s support to the Khalistan movement in Canada which is affecting the Indo-Canada trade ties? Otherwise, they would have committed to bigger numbers. During the visit, there have been no talks on FIPA (Foreign Investment Promotion & Protection Agreement). A bilateral FIPA will provide greater predictability and certainty for Canadian investors considering higher investment opportunities in India.
Shape of Trudeau’s First Visit
Trudeau who is on a week-long visit to India is in the news for apparently all the wrong reasons. The Canadian PM has been in India for about four days now but no senior government official has met him so far. The big names so far on his trip have been the who’s who of Bollywood including Shah Rukh Khan and Farhan Akhtar and a few Industry leaders from the country.
A junior official had greeted Canada’s first family when they landed. The Canadian PM is set to meet Prime Minister Modi and EAM (External Affairs Minister) Sushma Swaraj on Friday, where the two will address the media and exchange bilateral agreements.
Athithi Devo Bhava?
So far it has been four days into the trip, PM Modi has not even tweeted a welcome note for Trudeau. In the past, Modi had broken protocol when he personally went to receive his good friend and Israeli PM Benjamin Netanyahu.
Of what it looks like this snub to the Canadian PM visit could be a rebuttal to the Trudeau government of backing Sikh separatist movement known as the Khalistani movement that seeks an independent Sikh homeland in the Indian state of Punjab.
However, no official sources have confirmed this report.
India and Canada share friendly relations with each other. Canada is home to over 1.2 million Persons of Indian Origin (PIO) who comprise more than 3% of its population. As per the data from MEA (Ministry Of External Affairs), the two-way trade has increased from $ 4.2 billion (US$ 3.21 bn approx.) in 2010 to $8.02 billion(US $6.05 bn approximately) in 2016, but does not reflect the true potential. India accounts for only 1.95% of Canada’s global trade.
Canadian Companies in India
As for the Canadian Companies in India, there is an investment of around $750M annually in India. Canadian companies are investing in India, the majority goes to the country’s challenged financial sector.
Canadian company Brookfield is spending $480 million to buy Indian investor Essar’s 1.25-million square foot office complex in Mumbai.
Another Canadian giant Fairfax India Holdings Corporation of Canada has announced an expenditure of $200 million on a 51 per cent stake in the Catholic Syrian Bank Ltd. What is noteworthy here is that it is the first time the RBI(Reserve Bank Of India) let a foreign bank take a controlling interest in an Indian Bank.