Groundwork done, FTA talks with Canada soon
Economic Times, India
Groundwork done, FTA talks with Canada soon
25 Jun 2010
By Amiti Sen, ET Bureau
NEW DELHI: India and Canada could start negotiations on a free trade agreement for opening up markets in goods, investments and services by the end of this year.
The feasibility study by the joint study group appointed by the two governments is almost ready, and the two sides are expected to announce their intention to wrap up work and launch negotiations soon.
“The Canadians are very keen that we begin negotiations soon. The intention to start talks this year may be announced during the Indian PM’s Canada visit,” a government official has said.
Dr Manmohan Singh is scheduled to leave for Toronto on Friday to attend a meeting of the G-20 group of countries which will be followed by a bilateral meeting with Canadian Prime Minister Stephen Harper.
Speaking to ET, a trade economist who did not wish to be named pointed out that India and Canada stand to gain a lot from the FTA as the existing levels of trade is very low at around $ 4 billion.
“If Canada comes out of the shadow of the US and starts looking at larger economies like India, the trade diversion will result in incremental gains in everything,” he said.
On the same note, Ficci secretary general Amit Mitra stated that bilateral trade at present is so less, that once India and Canada look at each other seriously, there is potential to gain in most sectors.
“Following the duty reduction by Canada, opportunities for increased exports from India would be in apparels & textiles, carpets, articles of iron & steel, gems and jewellery and select electrical machinery, among others,” Dr Mitra said.
While India would directly gain in these sectors with elimination of duties if an FTA is launched, it could make in-roads in new areas too.
Apart from goods, India is also expected to gain in the area of services.
“We should not only ask for visa liberalisation for high skill professionals, but also low-skill workers as a lot of Indians in the low-skill category are interested in working in Canada,” another expert pointed out.
India is confident that an FTA with Canada is feasible as well as beneficial. “Since US is a large partner, there is no reason why Canada too can’t become a major player. We already have a big Indian Diaspora and the initial conditions are conducive for such an agreement,” the official said.
