Transformative & Regulatory Changes Have Made The Country A Booming Investment Destination
By Vandana Kumar
Joint Secretary, Govt. of India.
(Views are personal)
The greatest uncertainty in Canada’s economic outlook today is presented by restrictions in global trade.
Given 75 percent of its trade with USA and the export mix, Canada is exposed to developments in the US economy and commodity markets. Under the United States, Mexico, Canada Agreement (USMCA), Section 232 tariffs are a sore subject for Canada where a side agreement would provide a shield from tariffs.
Similarly, article 32.10 puts constraints on Canada’s ability to forge free trade agreement with nonmarket economies. While the USA will remain a dominant partner for Canada, it is in Canada’s interest to diversify its economic relations.
Since much of growth over the next decade will continue to come from Asia- led by China and India, no country or company looking for growth can afford to ignore the two.
While relations with China will be tough to navigate post-USMCA era, it is perhaps time for Canada’s tryst with India, particularly with the strong people to people connect, influential diaspora and the growing population of Indian students.
With perfectly complementary values and needs, Canada and India have long been natural allies.
India’s stupendous growth is coming from massive stimulus to its infrastructure- railways, highways, metro rail projects, airports and smart cities. By 2030, about 600 million Indian people will likely live in cities. Therefore, urban development and smart cities mission promises to provide massive opportunities for growth. With Canada’s known strength in infrastructure development, this holds immense promise for a strong collaboration.
India has set a target of 175 GW of renewable energy by 2022 of which 63 GW has been achieved. Considering India’s large and growing energy needs, Canada- the energy superpower stands to reap rich dividends with investments in this area. Solar cell and module manufacturing along with research in green technologies is a strong potential area for collaboration.
Canada’s leadership position in artificial intelligence can be leveraged to unleash a revolution in many sectors including agriculture, healthcare, customer service, retail and transportation.
With 65 percent of India’s population under 35, it is imperative for India to develop its human capital to reap the demographic dividend.
Making Canada an attractive destination for Indian students and deepening efforts like Schulich India are equally powerful and useful for both countries.
India today not only offers a growing market, an aspirational middle class willing to try new products and services, it also lays out a red carpet for foreign investors.
Transformative measures including legislative and regulatory changes, process engineering have given a fillip to build business-friendly investment climate and enhance ease of doing business.
The FDI policy has been liberalized such that most sectors barring a few allow 100 percent FDI under the automatic route. Several deep and structural reforms including Goods and Services (GST) have been implemented. 1400 laws have been scrapped, over 7000 reforms have been implemented under Business Reforms Action Plan throughout the country to enhance ease of doing business.
These efforts are reflected in a sharp improvement of 65 ranks in Doing Business Report from 142 in 2014 to 77 in 2018 and stupendous rise in foreign direct investment into India.
Canadian companies in certain sectors such as infrastructure, transportation and food processing already have tasted success in India.
Over the last 25 years, Bombardier has become a strong partner in India’s modernization and expansion of transportation systems, supplying signalling and train control solutions, manufacturing locally for the Indian Railways executing projects for Delhi Metro, Mumbai Vikas Rail and even Queensland Rail in Australia. McCain Foods (India) is today, a very popular frozen food family snack brand in urban India.
There are several others who remain bullish about India including Fairfax Holdings and Magna International with a dozen manufacturing units in India and there are many stories in the making, waiting to be told.