Story highlights India’s trade with Canada was cut by 4.6% in 2015, according to the World Bank
The countries met this week to restart negotiations
Heads of state are reconsidering the ways they’d be business partners
Amid spiraling tensions with its major trading partners, India is pursuing new trade ties with Canada.
While the country is already in the process of re-negotiating its global trade deals to counteract effects of the Trump administration’s anti-free trade rhetoric, the world’s two sixth-largest economies finally began negotiations for a free trade agreement (FTA) last week.
It’s been over two years since India signed on to TPP, one of the 12 countries around the Pacific Rim that signed up for the sweeping trade agreement. While it’s still in effect, Canada was exempted from TPP. India’s trade with the rest of the TPP nations was cut in 2015.
So the country isn’t too worried that negotiations with Canada could slow down TPP as it works on its own reforms to the agreement.
“The benefits are far greater than a TPP in their own right,” Commerce and Industry Minister Nirmala Sitharaman told Reuters. “There is a huge community of interest.”
It’s not all cut and dried for Canada, though. In September 2015, the country withdrew from TPP, fearing the open doors of foreign trade could impact Canadian companies.
“Our government chose to respect the decision of parliament. We acted in the best interests of the country,” Trudeau said at the time.
But, with China so clearly prioritizing trade deals, there’s no guarantee things won’t get reversed on Canada.
India and Canada last met in 2014, when both countries’ prime ministers appeared in a garden party video. The video was highly anticipated as it was seen as an opportunity for the prime ministers to boost bilateral relations after the 2015 general elections in both countries. However, at the time, India hadn’t yet ratified the free trade agreement it was in the process of signing with Canada.
Since then, India’s economy has turned around and is more open to trade. While there are still concerns that sensitive sectors such as textiles and dairy will be affected under the agreement, that’s not likely to stop India from reaching a deal.
“In the grand scheme of things, it’s more important to have a strong relationship with Canada than with China,” economist Andrew Wilkinson told Reuters. “They are two entirely different economies.”
While India is the world’s second largest exporter to Canada, Canada’s own trade with China, however, is at nearly $100 billion a year. And the two have given indication that they are willing to work together on trade.
“I do believe that China is not as diversified in its trade that Canada is,” Canadian Prime Minister Justin Trudeau said in January of last year, according to Reuters. “As a whole, our relationship is about much more than just trade.”
Get the latest exchange rate on CNN.com/TRADITION