NEW DELHI — Canada’s new envoy to India says he’s cautiously optimistic the two countries can reach a trade deal in recently relaunched negotiations, even after a previous, decade-long attempt failed to find an agreement. “There’s potential to do much more than we currently are,” said high commissioner Cameron MacKay in a recent interview with The Logic.

Canada and India exchanged $8.96 billion in goods trade in 2021, according to Statistics Canada data, making the subcontinent this country’s 13th largest partner; Canada ranked 36th for India that year. Two-way services trade was worth $6.7 billion.

“We’d like to grow those numbers,” said MacKay, speaking at the high commission in New Delhi, in his first interview with a Canadian publication since officially commencing his duties in March. “The best way to do that is to open up the trading relationship, and wherever possible cut the tariffs [and] non-tariff barriers [to] create a more stable, predictable, transparent business environment.” India is projected to be the fastest-growing major economy in 2022, and is likely to shortly overtake China as the world’s most populous country, he noted. 

The then-Conservative government first launched free-trade talks with New Delhi in November 2010, with a target of $15 billion in commerce within five years. But 10 rounds of negotiations failed to produce a deal. In March, Trade Minister Mary Ng and Indian Commerce Minister Piyush Goyal relaunched the process and agreed to consider an interim or “early progress” agreement. The Business Council of Canada welcomed the announcement.

MacKay declined to identify sectors that Canada is prioritizing in the ongoing negotiations. “To start, we’d like everything on the table,” he said. “We’d like a high level … of ambition on tariff elimination.” Ottawa is also hoping to bring down regulatory and other barriers to the Indian market, and it’s seeking “more clarity” around rules governing services and investment. 

Canadian pulse exporters have frequently expressed concern about New Delhi’s imposition of lentil duties, stock limits and fumigation requirements. Indian officials have told local media they want Ottawa to allow more pharmaceutical imports and movement of IT workers. The two countries have also previously discussed e-commerce and telecommunications rules.

Former federal officials say New Delhi’s public commitment to reaching a trade agreement hasn’t consistently translated to the negotiating table. In dealing with India, there’s been a “disconnect” between “the messages that their bureaucracy sends to our bureaucracy versus the political-to-political conversations,” said Julian Ovens, who served as chief of staff to successive Liberal trade ministers between January 2017 and December 2019. 

“Trade agreements are all about fairness and being pro-competition,” which requires governments to remove barriers and not discriminate against other countries’ products, he noted. India “has not been prepared to make those types of concessions.” Still, Ovens, now a vice-president at government affairs firm Crestview Strategy, said he was pleased to see recent progress in bilateral relations.

MacKay acknowledged that the two countries “spent years not making any real progress,” but said the “world has changed very considerably” since the original negotiations. “Post-COVID and post-Russian invasion, global supply chains are re-aligning,” he said, citing the need for “trusted partners.” While India’s Bharatiya Janata Party (BJP) government had “not concluded any trade agreements at all until just a few months ago,” it’s now completed or is negotiating deals with multiple partners, he noted. “We think we see some momentum on the Indian government side now that gives us cautious optimism that we can move forward successfully.”

(Despite lobbying by the U.S. and allies, India has declined to condemn Russia’s invasion of Ukraine, and continues to buy Russia’s oil.)

In February, India announced a free-trade deal with the United Arab Emirates, its first since the BJP took power in May 2014. In April, New Delhi signed an agreement with Canberra and pledged to eliminate tariffs on nearly 91 per cent of Australian goods exports over a decade. The two sides had initially begun work on an interim deal in September 2021, but the final pact covered more than expected.  

“We’d like to go considerably further than Australia did,” MacKay said, noting that Canada has a larger economy and exports a larger variety of goods to India. He cited as models Ottawa’s existing portfolio of deals, which typically include provisions on goods, services, investment and government procurement. Under the Liberals’ progressive trade agenda, Ottawa has also sought to introduce issues like labour rights, environment and gender into its agreements. MacKay said Canada is raising all of those topics in the current negotiations with India, as well as digital trade. None are included in Australia’s deal. 

“Inclusive growth and human rights lie at the core of Canada’s trade policies and engagements,” Global Affairs Canada (GAC) claimed in a readout of a June call between Ng and Goyal. Human Rights Watch, Amnesty International, Freedom House and other observers have expressed concerns about rising violence against religious minorities, particularly Muslims, in India under the BJP government, as well as declining freedom of expression, academic freedom and protest rights. (New Delhi has rejected those assessments). 

MacKay did not directly answer questions about Canada’s perspective on the state of human rights in India, or how it reconciles its stated commitment to those freedoms with watchdogs’ concerns. The United Nations Human Rights Council is scheduled to conduct its periodic, five-year review of India in November, he noted. “There’s an opportunity … to have a real dialogue and an exploration of these issues at that time,” said MacKay. “That’s absolutely the right forum for that.”

Ottawa doesn’t have a deadline for the early-progress or comprehensive trade agreements, GAC spokesperson Lama Khodr said in a statement to The Logic. Canada and India have conducted two rounds of negotiations on the interim trade deal so far, with a third split between meetings held last week focused on services and talks next month on goods. The two sides have agreed to conduct discussions every four to six weeks. 

Last month, India relaunched trade talks with the EU and held a fourth round of negotiations with the U.K. Both are significantly larger commercial partners than Canada, but MacKay said he’s confident Ottawa can maintain New Delhi’s attention on its own deal “because we have such good negotiators.”

In the meantime, the new high commissioner is continuing to travel around India, with trips planned to Bangalore and Hyderabad, major innovation and IT hubs on the subcontinent. “On the commercial side, technology business leaders in both countries are doing even more business with one another,” he said, citing a visit by representatives of Nasscom, India’s IT consulting industry association, to Canada this spring. Priorities for the local corps of the export-facilitating Trade Commissioner Service include auto, digital industries, cleantech and life sciences.