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Seizing Global Advantage

India - Global Commerce Strategy Priority Market

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Taj Mahal, India

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 capita 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.

Market Opportunities

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:

• 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.
• 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.
• 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.
• 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.
• 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.
• 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.

Canada-India Commercial Relations, 2005-2009 ($ Millions)

Text alternative for graph of Canada-India Commercial Relations

Government Leadership and 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:

2005

• Canada-India Agreement for Scientific and Technological Cooperation

2009

• Canada-India Joint Statement
• Memorandum of Understanding on Cooperation in Agriculture and Allied Sectors
• Memorandum of Understanding on Energy Cooperation

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

Unless otherwise stated, all data is for 2009 and expressed in Canadian dollars. All data based on latest available national statistics drawn from a variety of sources, including Statistics Canada, Export Development Canada, Bank of Canada, IMF WEO, UNCTAD.

For further information about India, visit the Foreign Affairs and International Trade Canada website or contact the Trade Commissioner Service at 1-888-306-9991.

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Date Modified:

2012-12-12