India-Canada Relations: There is bitterness in the relations between India and Canada. The biggest reason behind this is the issue related to the murder of Khalistani separatist Hardeep Singh Nijjar, regarding which Canada is making baseless allegations against India. Recently, the Canadian government made serious allegations against the Indian High Commissioners and said that they are involved in the murder of Nijjar.
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After this, the Indian government decided to call back its officials and also gave an ultimatum to 6 Canadian diplomats to leave India by October 19. However, amidst all this, on Tuesday (October 15), a statement by Canadian Foreign Minister Melanie Jolly came out, in which she said that her country is thinking of imposing sanctions on India. So let us try to understand with the help of statistics that if something like this happens, which country will have to suffer the most losses.
There is a trade of Rs 70,000 crore between India and Canada. If we talk about the year 2022-23, then business of $ 8.3 billion took place between the two countries, which increased to $ 8.4 billion in the next 1 year. During this period, India’s exports increased to $ 4.6 billion, while India’s imports stood at $ 3.8 billion. At present, no economic dispute has arisen between the two countries, but it cannot be denied that if something like this happens, it will affect both sides.
Investment in Canadian Pension Funds
According to a report by AsiaPacific.ca, Canadian pension funds have invested about Rs 6 lakh crore in India. Between 2013 and 2023, these funds invested heavily in real estate, financial services, industrial transport and infrastructure sectors. Apart from this, 600 Canadian companies are doing business in India, while more than 30 Indian companies have invested Rs 40,446 crore in Canada. 17,000 people work in it.
What kind of trade between India and Canada?
Economic relations between India and Canada are strong in the field of trade and investment.
India’s Exports to Canada:
- Gems and jewellery
- Precious stones
- Medicines
- Ready-made garments
- Organic chemicals
- Light engineering goods
India’s Imports from Canada:
- Pulses
- Newsprint
- Wood pulp
- Asbestos
- Potash
- Iron scrap
- Copper
- Minerals and industrial chemicals
Canada’s Foreign Investment in India:
- Canada ranks 18th among foreign investors in India.
- Between 2020-21 and 2022-23, Canada invested $3.31 billion in India.
FDI Share:
- Canada’s investment is 0.5% of India’s total FDI, a relatively small but important contribution to India’s economy.
Economic Significance:
- The trade and investment relationship highlights a strong yet modest economic bond between the two countries.
What are the future challenges?
If the ongoing diplomatic tension between India and Canada continues, it can have a profound impact on the economy of both countries. Especially, there can be a decline in the areas of business investment and import-export. Keeping this situation in mind, both countries will have to consider economic strategies and be prepared to deal with potential risks.
Economic Impact: Prolonged diplomatic tensions may significantly affect the economies of both India and Canada, especially in trade and commerce.
Decline in Investments: Business investments between the two nations could decrease, affecting sectors that rely on international cooperation.
Import-Export Reduction: The strained relationship may lead to a drop in import-export activities, causing disruption in supply chains.
Strategic Economic Planning: Both countries will need to reconsider their economic strategies to mitigate potential losses.
Risk Preparedness: Proactive steps are necessary to handle the economic challenges that may arise from the ongoing diplomatic conflict.
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