NEW REPORT: Canada-India according to the High Commissioners (Oct. 20)

(Picture: David Lametti, MP; High Commissioner Nadir Patel; High Commissioner Vishnu Prakash; Andrew Cardozo; Sandra Pupatello)

PROGRAM

(Report follows Program)

“Roundtable with the High Commissioners”
on Canada-India Relations and Trade

Keynote speakers:
• His Excellency Nadir Patel, Canadian High Commissioner to India
• His Excellency Vishnu Prakash, Indian High Commissioner to Canada

In discussion with
• David Lametti, MP, Parliamentary Secretary to the Minister of International trade
Chair: Sandra Pupatello, Former Ontario Trade Minister; Pearson Centre.

Thursday, October 20, 2016; 7:30 to 9:30 am (Networking till 10:00 am)
Sheraton Hotel, 150 Albert Street (O’Connor Room) Ottawa

Thank you to our Sponsor for the event: Canadian Nuclear Association

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REPORT

“Roundtable with the High Commissioners” on Canada-India Relations and Trade
Thursday, October 20, 2016; 7:30 to 9:30 am Sheraton Hotel, 150 Albert Street, Ottawa

Keynote speakers:
His Excellency Nadir Patel, Canadian High Commissioner to India
His Excellency Vishnu Prakash, Indian High Commissioner to Canada

Moderators:
Sandra Pupatello, Former Ontario Trade Minister; Pearson Centre.
David Lametti, MP, Parliamentary Secretary to the Minister of International Trade

Corporate Sponsor: Canadian Nuclear Association

Andrew Cardozo, President of The Pearson Centre made opening remarks. The Pearson Centre since 2013 addresses a range of economic, social and policy issues. We seized upon the rare opportunity when both High Commissioners were present and available to present a roundtable discussion in a critical area: Canada-India Relations and Trade. An affable discussion followed which focused on opportunities and challenges with recommendations for advancing and sustaining a strong relationship and rapid growth.

Each High Commissioner spoke on questions posed by the moderators.

Q. Comment on the current diplomatic status between India and Canada.

His Excellency Nadir Patel stated that the bilateral relationship is at or near its strongest point ever. Formal meetings earlier this year reinforced Canada is highly valued by India. Similarly India is a priority for Canada. Government interactions at the leaders level, ministerial level demonstrate that the strength of relationship is very high and has momentum to build on. Furthermore with respect to Trade & Investment all indicators (2014-15) show relationship is strong and the growth trend continues in 2016.
• Two way trade is up 30%. CDN investment in India is up dramatically 500%.
• More nonstop flights between Toronto/Delhi, Vancouver /Delhi, Mumbai /Toronto.
• Visitors, visa applications, and students from India up 70% in last year alone

His Excellency Vishnu Prakash concurred and emphasized the immense opportunity India holds for Canada: ‘India’s need and demand is astronomical.’ India will become the world’s largest middle class with 7-8% growth in 15-20 years as India marches to be the 3rd largest economy in the world. In short we see two complementary economies, at different stages of development united by a common objective of maximizing opportunities. The backbone of the relationship has are 3-4 verticals.
1. Trade/Economic. In last 24 months, 12 billion of investments from Canada. Similarly Indian invested (10%) 4 billion in an energy terminal set up in B.C.
2. Energy. India is considering all aspects of civil, nuclear, looking at hydrocarbons from Canada, importing uranium, expanding in renewable clean tech, green tech.
3. Education. Indian students coming to Canada are at 45,000 and growing. We have 300 million people in India who need skills upgraded. CDN education institutions entered and expanded footprint to set up online education in India.
4. Agriculture. Each evening there is a Canadian element in Indian food. We are the largest importer of CDN lentils. Saskatchewan farmers are happy.

Q. Your views on what the Indo-Canadian should be doing or stop doing on the diplomatic/trade side?

Both Commissioners agree that the talents, skills and hard work of the Indian diaspora are recognized in all fields including education, IT, and industry. Many are heads of fortune 500 companies. In Canada where every 30th CDN is of Indian origin, there is
a kind of integration into the mainstream where they can contribute vigorously (19 Members of Parliament, 4 Cabinet Ministers). As well, the diaspora is important in India with remittances, giving back to their villages, investing in development and business initiatives. The most important recommendation is for the Indian diaspora to leverage their diversity, their knowledge of language and culture. It was noted His Excellency Nadir Patel speaks Gujarati with Prime Minister Narendra Modi. That kind of leveraging of diversity gives Canada a demonstrable competitive edge.

Q. What should business councils do, that they are not currently doing, to enhance trade opportunity?

His Excellency Nadir Patel
Trade and business Councils are doing a lot in trade, investment, and education.
• In education, can better highlight the thriving diaspora here who are successful in studies and businesses as models that others in India can replicate.
• In trade, can expand programs where CDN companies who want to enter the market not familiar with India can benefit from those familiar with India to help and navigate challenges.
• Generally, can better support leveraging knowledge networks that diaspora community has to attract foreign investment into Canada, from India, and beyond.

His Excellency Vishnu Prakash
The large companies are doing well in Canada and India. They have knowledge, infrastructure, wherewithal to manipulate the market and do well. The challenges are for the small to medium-sized enterprises (SMEs). In India about 40% of GDP is contributed by SMEs and 40% of exports are contributed by SMEs. Councils must help companies appreciate cultural differences and help develop personal equations. The personal human element is important.

Q. Temporary Foreign Worker Program (TFWP).

His Excellency Vishnu Prakash India is the youngest major country in world with 10-12 million youth who are eager, educated, highly skilled bringing best practices, quality and competition, adding value to the companies they work for. Every 3rd tech co in Silicon Valley has an Indian DNA and growing because they have the skill set. TFWP permit is an important vehicle or channel for Indian highly skilled people to travel to Canada and to contribute. They are not interested in settling down in Canada. It’s a win-win proposition.

His Excellency Nadir Patel The TFWP continues to be an issue of interest because of the shock of the change from a simpler system to a tighter one. In reality, Canada is still more liberal, generous flexible than the USA/UK. Today TFWP is more efficient. Yes, greater flexibility can stimulate growth and will be valued by the Indian industry.

Q. Are there any structures, strategies, policies to promote and increase trade?

His Excellency Nadir Patel
Our trade commissioner world is well positioned to help. Delhi is Canada’s largest embassy in the world and Canada has the largest network in India due to the strong trade investment as well as immigration programs. We will work with multinationals but we must make a concerted effort to support SMEs effort in trade with India.

Challenges:
1. Geography – Direct flights are making it easier to trade with India.
2. Information gaps- Our commission must bring The India Story to SME’s in Canada. For example we encouraged our Consul General in Mumbai while in Canada to connect with the Consul General here in Toronto / Vancouver to consider joint initiatives to promote India here in Canada.
3. ‘Not easy to do business in India’ myths – We can be more creative, aggressive in debunking the myths, to showcase more about successes of reforms (economic reforms-trade liberalization initiatives, focusing on investment in infrastructure, concerted effort in red tape reduction) that make it easier to do business in India. Certainly language is not an issue like in other places, like China.

His Excellency Vishnu Prakash
1. It is progressively easier to do business in India as a result of a wave of economic reforms. The World Economic Forum global competitive index shows India has risen 32 points in the last 24 months. In 138 countries we are now 39. We can and will do more.
2. What has to be known in Canada by SMEs is The India Story -the kind of growth story that India has embarked on, the kind of market size, the kind of demand that India has. There is a huge gap in demand and supply in India for commodities and natural resources. Canada has a huge supply of timber, iron, gas, diamonds, uranium, and agricultural products. Whatever Canada has, India needs, and India needs more.
Also we predict in next 5 years the demand in India for electronics -communications, telecom, IT hardware and software will be $400billion US a year. Our domestic supply as it stands today will be less than $200milllion a year, which we can plug by manufacturing in India, which we are trying to do or to import. Canada has a lot of strength in electronics and its verticals. There are opportunities and challenges.
3. Some countries will roll out carpet but close the back door. India may be slightly more competitive to enter but its one of the easiest markets to exit, but nobody wants to exit, because once you enter you see opportunities.

Q. Are there particular strategies on investment or areas for improvement?

His Excellency Vishnu Prakash
India jumped from an agrarian to a service economy. Today more than 60% of GDP comes from these services. Still we have a lot of dependence on agriculture. We have not done so well in manufacturing. Overall, we have a 200 billion trade gap, which is not sustainable. We launched the MAKE IN INDIA program a year and a half ago. The biggest incentive is the active Indian market with a 250 million middle class with buying power to grow to 600 million. The idea is to expand the manufacturing base from 15% to 25% GDP. As well, limits for direct investment are being increased. For example: from 26%-46% in the insurance sector, such that Sunlife Insurance has expanded investments in India. There are a lot of hand-holding opportunities. Visit the MAKE IN INDIA website.

His Excellency Nadir Patel
I’ll be a little constructively critical of MAKE IN INDIA, which I shared with the ministers of India as well. MAKE IN INDIA is a good initiative but an over focus on bolstering manufacturing sector for domestic consumption purposes. The campaign comes will a lot of focus on technology transfer and setting up operations in India/for India. The net should be cast wider because the opportunities are there. Where Canadian companies can actually play a significant role is investing in India. Not enough focus on the leveraging of competitive advantages of setting up MAKE IN INDIA for export purposes. However, if this is about revitalizing and bolstering manufacturing sector for manufacturing led growth and capitalizing on low skilled but readily available competitive advantage through the labour force and with a focus on export as well as domestic consumption there will be a lot of opportunity for Canadian companies as well. And you see that. Bombardier is making train and railcars, for the Indian market and beyond.
Over time, as there is a concurrent effort on stay in India education, manufacturing growth will shift to a smart economy and higher skilled jobs over time as well. These are my personal views, which I shared in India as well.

Q. India’s Minister of State for the Ministry of Commerce & Industry, Nirmala Sitharaman, met with the Minister of International Trade, Chrystia Freeland, a couple of weeks ago. What’s your take on the outcomes of that meeting?

Both Commissioners expressed witnessing the best bilateral set of meetings in their careers…a conversation between two friends and partners, a meeting of minds, a meaningful stocktaking between the ministers.

For Canada’s minister, it was an opportunity to get a good understanding of the mechanics, the specifics of what’s happening in India and why some of the posturing on trade agreements and other initiatives, not only bilaterally but multilaterally are the way they are. Extremely productive in understanding each others’ perspectives and realities then rolls into the way forward, to further expand trade and investment in India and Canada including the negotiations for CETA (Comprehensive Economic and Trade Agreement ) as well as the FIPA (Foreign Investment Protection Agreement). The Ministers agreed to task the negotiators to get back to the table to make it happen.

The Minister of Immigration, Refugee and Citizenship, John McCallum made an impromptu visit and joined the roundtable discussion, an indication of India’s value and priority for Canada. India is one of our three biggest markets for immigration and international students. We are one of the few governments overtly open to globalization and the free movement of people and capital. It is critical that we be open to companies wanting to bring in some of their key people and be open more generally to immigrants and temporary foreign workers. And if we do that we can get a multiplier effect on Canadian jobs. For every one foreigner we get 10-20 jobs. I think that is the way of the future. As well, we favour international students and recommend more points under express entry so more can come, including from India, which has the best group of young educated students who also speak English and French. Also we’ll facilitate entry of temporary foreign workers in the IT area to be determined soon. We are open to TFWP in some regions/sectors but we want better pathways to permanent residents. This four-year rule we think is not a good idea as per the report. So there are some changes we will be making soon in that area. Minister McCallum will travel to India in November with Ontario Minister of International Trade, Michael Chan.

Unfortunately the questions from the audience were largely inaudible. The Commissioners’ responses to questions are included in recommendations.

RECOMENDATIONS FOR CANADA

The Indian diaspora needs to leverage diversity more, their knowledge of language, culture are assets and gives Canada an edge to attract foreign investment, to serve as
models that others in India want to replicate, to help SMEs navigate entry/sustainability.

Canada has a demographic issue of and aging population and they should take advantage of the 1.3 billion Indians available for immigration, trade and investment.

Reconsider the Temporary Foreign Workers Program, where greater flexibility can stimulate growth and will be valued by the Indian industry.

Take advantage of the multiplier effect of people-to-people movement to create jobs.

Establish more points under express entry to favour international students.

Take better advantage of economic reforms, broader trade liberalization, confidence in India as per signing of the Uranium agreement and India’s entry to the nuclear suppliers group, through engagement in the India’s extension plans in nuclear energy

Expand in Science and Technology (SNT) in India as per joint working group chaired by ministers.

Work out some cost advantages or impediments in trade and enabling infrastructure for raw materials as part of the broader infrastructure story.

Hydro is very much on radar of India’s Minister of Power to complement clean energy.

RECOMENDATIONS FOR INDIA

Reconsider MAKE IN INDIA as a good initiative, but with potential to go beyond the way it’s articulated now. Capitalize on low skilled but readily available competitive advantage through the labour force here, and focus on exports as well as domestic consumption.

Continue to build on relationships for massive expansion of nuclear energy. Next month, there will be another round of dialogue. Embark on specific areas in addition to importing uranium from Canada, R & D, increase in number of nuclear reactors that are going to be to set up, expanding the life span of Candu reactors.

Continue to reduce red tape across the full spectrum, federal and state level, through a whole series of initiatives such as commercial judges in the court system to fast track processes. Change is slower but more sustainable.

RECOMENDATIONS FOR CANADIAN COMPANIES

CDN companies should take a long-term look at India and strive to appreciate cultural differences through person-to-person relationships.

Take advantage of more direct flights to tackle the challenge of geography.

Take advantage of India’s ten-year multiple entry visa to tourists and business people.

Take advantage of the Indian government’s role to iron out the wrinkles, make entry processes easier and make available opportunities.

Get to know The India Story better.

RECOMMENDATIONS ON WHAT COMMISSIONS, COUNCILS CAN DO BETTER

Do exploratory work in advance through video conferencing, introduction of potential contacts before going there to make sure your time on ground is more efficient/effective to reduce the number of trips.

Do more with Indian companies and encourage them to come to Canada as potential suppliers, partners, and bring India story not through us alone, but companies here.

Continue programs through Industry associations, the trade commission world, which expand /redirect resources to markets with greatest potential, India being one of these.

Work with Indian colleagues (Consul Generals) here in Canada in a joint manner to aggressively promote The India Story to SMEs.

Do a better job of debunking the myths, to showcase more about successes of reforms taking place in India now.

Emphasize the kind of growth story that India has embarked on, the kind of market size, the kind of demand that India has…”India’s market and need is astronomical”.

Better communicate the benefits/opportunities to film, television and creative industries as a whole as per the audio-visual coproduction treaty between Canada and India.

In education consider support for technical vocational skills working with the private sector bridging gaps in terms of knowledge and skills and training.

Encourage programs for Canadian students to study in India on study tour, research collaboration between universities/ faculty exchanges/ train the trainer programs.

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