5th India-Canada Ministerial Dialogue on Trade & Investment

12 Mar 2022

On 11th March, 2022, India and Canada held the fifth Ministerial Dialogue on Trade & Investment (MDTI) in New Delhi.

The robust trade and economic relationship between India and Canada was highlighted and both countries resolved to further strengthen the bilateral ties and economic partnership.

A Joint Statement was issued at conclusion of the dialogue.

Key Highlights

Recovery of Bilateral Trade: Both sides expressed satisfaction over the strong recovery of bilateral trade in 2021 after the economic contraction as a result of the COVID-19 pandemic, with bilateral trade in goods reaching US$ 6.29 billion registering a growth rate of 12% as compared to the previous year.
Services Sector: India and Canada emphasized the contribution of the services sector in furthering the bilateral relationship and noted the significant potential for increasing bilateral services trade.
Two-Way Foreign Direct Investment: Both sides also appreciated the impressive growth of two-way foreign direct investment and its contribution to deepening economic and trade ties, welcoming various reforms and initiatives taken by both countries to improve the business ecosystem and make it investor-friendly.
Role of MDTI: The significance of the Ministerial Dialogue on Trade & Investment (MDTI) as an institutional mechanism for forging robust bilateral trade and investment ties and enhancing economic cooperation between both countries was highlighted.
Comprehensive Economic Partnership Agreement (CEPA) Negotiations: Recognising the need for a comprehensive trade agreement between the two countries that would help in bolstering trade, investment and further strengthen the bilateral relationship, India and Canada agreed to formally re-launch the India-Canada Comprehensive Economic Partnership Agreement (CEPA) negotiations.
Early Progress Trade Agreement (EPTA): Both sides agreed to consider an interim agreement or Early Progress Trade Agreement (EPTA) that could be concluded early as a transitional step towards the CEPA. Both countries agreed that an EPTA would be consistent with Article XXIV of the General Agreement on Tariffs and Trade and shall include high level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover any other areas mutually agreed upon.
Bilateral Trade Issues: Both sides agreed to undertake intensified work with respect to the recognition of Canada’s systems approach to pest risk management in pulses and market access for Indian agriculture goods such as sweet corn, baby corn and banana, etc.
Canada welcomed India’s consideration to allow the import of pulses without penalty in case of fumigation on arrival by Methyl Bromide (MBr) until finalization of a systems approach for Canadian pulses.
Canada also agreed to examine expeditiously the request for Conformity Verification Body (CVB) status to APEDA (Agricultural and Processed Food Products Export Development Authority) for facilitating Indian organic export products.
India also noted its interest in recognition of traditional medicine including Ayurveda and other AYUSH systems.
Canada noted its interest in market access for cherries and lumber.
Cooperation Areas: They reaffirmed their commitment to strengthen trade and commercial ties through enhanced partnerships and cooperation in identified areas such as agro-products, chemicals, footwear, textiles, automobiles, energy, electronics, minerals and metals, urban development, information technology and tourism.
They emphasised enhancing cooperation in sectors such as critical and rare earth minerals for mutual benefit and welcomed the export in potash from Canada to India and collaboration within the sector, demonstrating Canada as a strategic and reliable partner.
Complementarities: Both countries highlighted their existing trade complementarities and recognised the need to expand bilateral trade through unlocking the potential across priority and emerging sectors both in goods and services.
Global Supply Chains: Both countries acknowledged growing concerns about challenges to global supply chains, including disruptions linked to the COVID-19 pandemic, and discussed the continued importance of working together to promote the international rules-based order and supply chain resilience in critical sectors.
Public Health Sector: Both sides discussed the potential for strengthening the cooperation in public health sector given that India is a reliable partner for Canada in supplying quality and affordable pharmaceutical products, particularly generic medicines.
Tourism: Both countries recognised the potential for expanding cooperation between India and Canada in tourism, including sharing information and best practices on tourism (e.g. exchange programs), destination management, and interaction between tour operators and travel agents.
Urban Development and Infrastructure: Both sides also expressed interest in cooperation in urban development and infrastructure including smart cities and physical infrastructure, especially water supply, sewerage, power and roads; skill development, transfer of technology and R&D in the construction sector.

Conclusion

Reaffirming their commitment to the rules-based, transparent, non-discriminatory, open, and inclusive multilateral trading system embodied by the World Trade Organization, India and Canada agreed to work together to further strengthen it.