Since the early
1990s, India has transformed its economy into a global powerhouse. Despite
recent deceleration in GDP growth, India continues to be one of the fastest
growing economies in the world and has the potential to become one of the three
largest global economies by 2050. India’s growing population, rising per capital
income levels, rapidly expanding manufacturing and services sectors, and the
associated infrastructure and natural resources requirements make it a
tremendous market of opportunity for
Canadian exporters and investors. Canadian
exporters and investors. The growing competitiveness of its firms—coupled with
their strong desire to venture abroad—also make India an important source of
strategic investment for Canada. India’s potential as a talent pool is
tremendous. It is already a recognized leader in mathematics, sciences and
engineering and its excellent academic institutions continue to produce a large
labour force of well-educated, English-speaking professionals. But India is
also a vast and multifaceted country where conducting business can be
difficult. Key market challenges for Canadian companies include restrictive
import and investment regulations, limitations on foreign services providers,
inadequate enforcement of intellectual property rights and low transparency in
the contracting process. To succeed in this complex environment, Canadian firms
need access to timely and high-quality market intelligence. Concerted effort
between governments and businesses to increase awareness of Canada’s strong
capabilities and cost competitiveness in priority sectors is also essential.
* Commercial Relations, 2009 :-
- Canada’s merchandise exports to India quadrupled over the last decade (compared to a decline of 12.9 percent for Canada’s overall exports), reaching $2.1 billion in 2009.
- Over the same period, Canada’s merchandise imports from India increased by about 62.6 percent, reaching $2.0 billion in 2009.
- Both direct investment in Canada from India and Canada’s direct investment in India increased sharply over their level five years ago, amounting to $3.0 billion and $601 million respectively by year-end 2009.
- Canadian services exports to India were $324 million in 2007, while services imports were $421 million the same year.
The Government of
Canada has identified India as a GCS priority market—based on extensive
consultation with government, academic and Canadian business and industry
representatives—and has developed a comprehensive Market Plan that identifies
the following sectors as offering clear market opportunities well suited to
Canadian capabilities and interests in the region:
1) Agriculture, Food and Beverages:-
Opportunities in India’s agricultural sector encompass a broad range of
sub-sectors including commodities, food and beverage processing and genetics.
Growth in this sector is expected to be driven by increases in middle and upper
income households, increases in youth population and key lifestyle changes.
2) Information and Communication
Technology (ICT):-
The Indian telecommunications industry is one of the fastest
growing in the world. The mobile phone subscriber base is growing at rates of
over 80 percent, while internet access continues to rise at a phenomenal rate
with increasing deregulation, literacy levels, lower costs of PCs and an
overall increase in consumer awareness. Moreover, the Wi-Max/Broadband Wireless
access (BWA) market in India is poised for significant growth with the
Government issuing new licenses as well as a new Telecom policy in 2009. India
also has a vibrant film and entertainment industry that relies heavily on
special effects and animation.
3) Life Sciences:-
While the
biotechnology industry in India currently holds 2 percent of the global market,
it has the potential to emerge as a global player. Some analysts suggest that
India’s biotech industry, which grew by 20 percent in 2008-2009, could see
revenues quadruple within five years.
4) Education:-
The growing dynamism
of the economy and the resulting prosperity are driving demand for quality
education in India. Despite India’s large network of educational institutions,
the increasing demand for quality education far surpasses the supply. An
estimated 160,000 Indian students study abroad each year; Canada’s share,
though growing quickly, remains small.
5) Power and Renewable Energy:-
In
order to sustain its economic growth, India is poised to increase its installed
capacity five-fold within the next 20 years, offering short- and long-term
opportunities to Canadian companies in all areas of the power sector. Efforts
on new and renewable technologies are increasing with global emphasis on clean
energy and combating climate change.
6) Transportation Infrastructure:-
The Government of India estimates that $500 billion will be spent in the
infrastructure sector in the next decade, with the private sector playing an
important role. Important opportunities exist for investors, as well as
Canadian companies with international experience in project planning,
engineering and implementation, feasibility and environmental impact studies
and construction.
* Government Leadership & Support :-
The
Government of Canada will continue to monitor and influence India’s commercial
policies and regulations in favour of Canadian interests, including by working
closely with Canadian companies active in the market to address key barriers
such as the country’s restrictive import regulations, limits on foreign
services providers, inadequate enforcement of intellectual property rights and
low transparency in contracting processes. New bilateral agreements on science
and technology and foreign investment will help open new doors for Canadian
companies, as will ongoing work to secure Canada’s place as an important
gateway for Asia Pacific commerce. Canada’s Trade Commissioner Service in India
has expanded with new trade offices in Ahmedabad, Hyderabad and Kolkata and
additional resources in Delhi and Mumbai. Trade commissioners will continue to
focus on promoting Canada as a gateway to North America, a key investment
destination and a science and technology partner.
* Market Access :-
Canada has a
number of bilateral trade and investment policy instruments in place that are
helping to facilitate and support Canadian commercial engagement in the
country:
a) 2005
- Canada-India Agreement for Scientific and Technological Cooperation
b)2009
- Canada-India Joint Statement
- Memorandum of Understanding on Cooperation in Agriculture and Allied Sectors
- Memorandum of Understanding on Energy Cooperation
c) 2010
- Canada-India Joint Statement
- Nuclear Cooperation Agreement (ratification and implementation pending)
- Memorandum of Understanding on Earth Sciences and Mining
- Joint Study on a possible comprehensive economic partnership agreement
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