Future looks bright after ‘Year of India in Canada’

With the official “Year of India in Canada” having just ended, it is worth reflecting on the year’s success and the opportunities for India and Canada to build stronger trade and economic ties. Among notable events in 2011, Toronto hosted Pravasi Bharatyia Divas (PBD) Canada last summer, one of the most successful PBD events to be held outside of India, with a strong focus on economic and business activity between the two countries.

EEPC India (formerly the Engineering Export Promotion Council) was the Canadian Manufacturing Technology Show’s 2011 Strategic International Partner, hosting a pavilion with a focus on innovative Indian engineering. Indeed, “Indo-vation”, as it has become known in business circles, was and remains a hot topic for Canadian business leaders. The remarkable C$35 (US$35) tablet computer distributed by the Indian government (and produced in partnership with a Canadian company) and the Tata Nano are often cited as examples of how India is leading the charge on innovative low-cost products for mass markets.

Such efforts are paying off. Two-way trade between India and Canada is currently approximately C$5 billion, close to double what it was in 2005. Prime ministers Manmohan Singh and Stephen Harper have exchanged visits over the past two years, and both have focused on efforts to increase trade to C$15 billion by 2015, including by reaching a comprehensive economic partnership agreement.

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Perfect partnership

There are several areas in which India and Canada can benefit from one another’s strengths. Canada is uniquely positioned to meet India’s rapidly growing appetite for resources. India, with its growing reputation as a centre for innovation and its ability to achieve cost savings and volume through technological advances in the energy and resources sector, is a perfect partner for Canadian companies seeking to develop and maximize efficient production of their resources.

The province of Alberta’s oil reserves (including oil sands) rival those of Saudi Arabia. Alberta’s Department of Energy has predicted that Alberta’s oil supply will grow from 1.31 million barrels a day in 2008 to 3 million barrels a day by 2018. While most of this supply currently goes to the US, the US government’s recent refusal to approve the Keystone pipeline from Canada to refineries in the US should have Canadians more carefully considering other markets for Canadian oil.

Opportunities in energy

Similarly, Indian oil companies should carefully consider investing in the oil sands, if not for import into India, due to transportation costs, then from an energy security perspective, as China has done. In addition to abundant supply, Canada offers arguably the highest levels of political and social stability of any major oil producer.

As coal prices rose sharply in light of increased global demand and reduced supply due to flooding in Australia last year, Canada’s coal reserves remained available to help ensure global demand was met. Canada’s exports of coal are among the highest in the world, and Alberta’s reserves are estimated at 37 billion tonnes.

Recent developments provide room for even greater growth in the alternative energy sector. For example, in June 2010 at the G-20 Summit in Canada, India and Canada signed an Agreement for Cooperation in Peaceful Uses of Nuclear Energy, which makes the countries partners in the nuclear energy market and gives India access to Canada’s nuclear technology, equipment and fuel.

Ideal match

The match is ideal. India intends to establish 12 new reactors requiring 1,500 additional tonnes of uranium each year and Canada is the world’s largest uranium-producing region, with about 30% of global production each year. And with India’s nuclear engineering expertise and more than 40 years of experience with CANDU-based technology, Indian engineering companies could be of assistance in the refurbishment and further construction of Canada’s nuclear facilities.

Additional opportunities lie in the agriculture and food processing sector, to ensure India’s food resources keep up with its growth. Potash is an essential component of industrial fertilizers, and Canada is currently the world’s largest potash producer.

Canada is also one of the world’s largest exporters of lentils and other pulses. It is already one of India’s largest suppliers of pulses and there is room for growth in this sector.

The Year of India in Canada was indeed a banner year in which Indian governmental, business and cultural groups did a remarkable job of ensuring that the Indian brand became well recognized in Canada. With the wheels in motion, it is now incumbent on business leaders and their advisers in both countries to ensure that momentum is maintained and translates into greater economic prosperity for both nations.

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Raj Sahni is a partner and co-chair of the India business group at Bennett Jones, a leading Canadian law firm with offices in Calgary, Toronto, Edmonton, Ottawa, Dubai, Abu Dhabi, Doha, and a representative office in Beijing.