Commentary By Gurmant Grewal

With world leaders descending on our country for the G8 and G 20 summits, it’s time to review Canada’s relationship with growing markets.
Canada’s economy has become dangerously dependent on the American market. Canada’s exports to the United States have grown to over 75 percent of our total world-wide exports. With the American economy in recession and facing a steep road to full recovery, our over-reliance spells trouble.
It is, therefore, imperative that Canada diversify its trade, and India offers a promising solution. It is a logical time to reflect on Canada’s relationship with India and question whether we are doing enough to promote trade between our two nations.
In 1991, India implemented market-based reforms sending its economy into overdrive, doubling the size of its economy and allowing the country to rapidly develop as an emerging economic power. It is now the 10th largest in the world and is forecasted to be the second largest global economy by 2050. In April of this year, India’s industrial production increased by a blistering 17.6%. There are more than 3 dozen billionaires (US dollars) and 100 of the Fortune 500 companies are in India. Indian Foreign Direct Investment in Canada reached $3.0 billion in 2009, making India the 13th -largest source of FDI in Canada. Canadian investment in India was valued at $601 million in 2009.
Countries like the US, China, Germany, and the United Kingdom have benefited from India’s economic growth, but Canada has missed out.
Canada’s bilateral merchandise trade with India totalled $4.1 billion in 2009. India was Canada’s 10th -largest export destination in 2009 and the fourth-largest in Asia. Over 20% of India’s exports go to Europe which is its largest export market. India’s exports are only 24% of its GDP, indicating there is huge potential. India imports billions of dollars worth of fertilizers, chemicals, petroleum products, medicinal equipment, telecommunications equipment, and aircraft. Though Canada’s exports to India have doubled since 2005, they still represent a tiny fraction of our overall trade (0.6% to be exact).
India, the largest democracy in the world, has a population of over 1.1 billion, with a workforce of over 467 million. Almost 50% of Indians are younger than 16 years of age. It should also be noted that India has the 2nd largest pool of scientists and engineers, producing approximately 200,000 engineers, 300,000 technically trained graduates and 2 million other graduates per year.  There are 120,000 Indian IT professionals in Silicon Valley and 150,000 in Bangalore.  35% of Silicon Valley start-ups are also by Indians. In the USA, Indians make up about 38% of all doctors, 12% of all scientists, 36% of NASA scientists, 34% of Microsoft employees, 17% of INTEL scientists, and 13% of Xerox employees. India has an impressive human capital to capitalize on.
Interestingly enough, Canada does not have a well-developed services trade relationship with India. In 2007, Canadian services exports to India totalled $324 million, while services imports were valued at $421 million.
India’s economic growth provides Canadian companies with unparalleled opportunities to sell their goods and services.
It is anticipated that India would implement a fiscal consolidation with tight monetary policy and cautious fiscal policy and will need to closely monitor inflation. It is also expected that there will be a reduction in government subsidies and more investment in infrastructure.
Canada has expertise and resources that India needs. Our mutual priorities include energy, civil nuclear cooperation, science and technology, culture, tourism, mining, agriculture, education and counter terrorism. In civilian nuclear energy alone, India offers a potential investment of $150 billion over 15 years. India’s commitment of reducing emissions by 20-25% of 2005 levels over the next 10 years and its acute energy shortage, leading to the building of solar, wind, renewable energy and power plants, present tremendous opportunities in the field of sustainable energy. Furthermore, India’s mineral deposits and mining sector, hospitality and service sector, and the building of modern water purification and waste management systems as well as cheap medical supplies and services, coupled with quality human resources in medical, engineering, IT and management – all offer unique opportunities for Canadian investment and trade. Tourism and students are other areas which not only bring in capital but also build goodwill. Australia and the US receive 10 and 20 times more Indian students respectively than Canada. Indian visitors alone spend about $100 million per year in Canada.
There are about 2 million Canadians of Indian origin. Indians are a closely knit community and they are well-connected. They have a lot to offer in terms of trade, investment, contacts and goodwill. But the potential of Indo-Canadians remains vastly underutilized in Canada.
Despite the thousands of kilometers separating us, Canada and India share many common bonds thanks to our ties through the British Commonwealth and multiculturalism. These bonds are further cemented by the growing Indian community on our own shores. The presence of English as the language of business and administration and similar parliamentary and legal systems create an environment of familiarity that provides us with a competitive advantage over other nations.
India is driven primarily by domestic (consumer) consumption, - a marked contrast to Japan, the Asian Tigers and now China, all of whom have followed the export-oriented model.
Canada, however, is not well-represented in the Indian economy. The blame for this sad state of affairs rests, at least in part, on the former Chrétien Liberal government.
In 1998, regional tensions led both India and Pakistan to engage in a series of nuclear tests. The Chrétien government mishandled the situation by attempting to isolate India. Canada suspended bi-lateral relations, recalled our High Commissioner, and imposed economic sanctions. At the G8 meeting that year, Chrétien pushed other nations to follow suit, but failed to win the support of European leaders. While Canada wasn’t the only nation to impose sanctions, we were one of the last to lift sanctions. The Clinton administration lifted its sanctions within months, but Canada maintained its sanctions until 2001.
While the international community sought to bring India and Pakistan back to the negotiating table, the Chretien government took an inflexible and unrealistic approach to isolate the two countries. Canada has been the only country to formally complaint of the nuclear tests. Canada’s response to the 1998 nuclear tests resulted in long-lasting damage to Canada-India relations.
Our response to the conflict between India and Pakistan was unproductive. At the time, I argued that Canada was a friend indeed and should be a friend in need. Canada should have intervened to help ease the tension rather than adding to it with a repulsive knee jerk reaction. The cause of peace would have been best served if Canada remained engaged. It would have been in line with our past traditions– think Lester Pearson and the Suez Crisis. Instead the Liberal government took an uncompromising, hard-line stance. So far so, the Canadian DFAIT had decided to vote against India and Pakistan at any international vote, irrespective of the issue; which I resented as the Foreign Affairs Critic of the Official Opposition.
We are now playing catch up with the rest of the world to capture our share of the Indian market. The Harper Government is on the right track – negotiating a trade agreement and allowing high profile visits by key cabinet ministers, including the Prime Minister himself last November. However, we still have a distance to go to make-up for previous missteps. The payoff can be large for the Canadian economy in terms of new markets and new opportunities, but the effort must be similarly great. 
Our two countries have work to do - on building institutional linkages, relations with media, cooperation in bureaucracy, developing strategic partnerships and strengthening friendly and deep-rooted diplomatic relations with appropriate diplomats at the forefront.  
— Gurmant Grewal, M.P. (1997 to 2006) has been the Deputy House Leader and Senior Foreign Affairs Critic (Shadow Minister) of the Official Opposition of Canada.

PM Harper to host Manmohan Singh

Canadian Prime Minister Stephen Harper will hold bilateral talks with Prime Minister Manmohan Singh after the end of the G-20 summit June 27. Singh, the first Indian prime minister to visit Canada in more than a decade, will be the only foreign head of government Harper will host after the summit.
Singh is the first Indian prime minister to visit Canada in about one and a half decades even though three Canadian prime ministers have visited India during this period.
Inder Kumar Gujral was the last Indian prime minister to visit this co