India-Canada Economic Ties: Short-Term & Minimal Impact Amid Travel Curbs 2023
The COVID-19 pandemic has disrupted global travel and trade, affecting economies around the world. India and Canada, like many other nations, have implemented travel restrictions and lockdowns to curb the spread of the virus.
While these measures have had far-reaching consequences, the impact on India-Canada economic ties appears to be short-term and minimal.
According to authorities and trade experts, the suspension of visa operations by India and Canada won’t significantly affect bilateral commerce in the medium or long term or disrupt investments.
Unless a provider is brand-new, the majority of orders are now done online. It may be difficult for new business owners who wish to start exporting to Canada since certain customers may not be able to go. Ajai Sahai, director general and chief executive officer of the Federation of Indian Export Organisations, stated that the remaining exports will continue (unaffected).
- Bilateral Trade: A Solid Foundation
India and Canada have enjoyed a steadily growing trade relationship over the years. Before the pandemic, the two countries had already established a strong economic foundation, with bilateral trade reaching approximately $8 billion in 2019. Key sectors such as agriculture, technology, energy, and pharmaceuticals played a significant role in this trade relationship.
- Shift Towards Digital Engagement
One of the key reasons for the minimal impact of travel curbs on economic ties is the swift shift towards digital engagement. The pandemic accelerated the adoption of digital tools and platforms for business communication and transactions. Indian and Canadian businesses quickly adapted to virtual meetings, webinars, and online trade events, ensuring that the flow of information and trade continued unabated.
- Robust Trade in Essential Goods
The pandemic underscored the importance of essential goods, and India and Canada continued to trade in these critical commodities despite travel restrictions. Pharmaceutical products, medical equipment, and agricultural goods were in high demand, and both countries managed to maintain the supply chain, ensuring that essential goods reached their destinations without significant disruptions.
- Resilience in Agricultural Exports
Agriculture is a vital sector in India-Canada trade. Canadian agricultural products like pulses, lentils, and canola oil are essential commodities for India. Despite travel restrictions, agricultural exports continued, with shipments being coordinated efficiently through shipping and logistics companies. This resilience demonstrated the robustness of the trade relationship.
- Innovation and Technology Cooperation
The pandemic created opportunities for innovation and technology collaboration between India and Canada. Both countries have strong technology sectors, and the need for remote work and communication led to increased cooperation in areas such as IT services, e-commerce, and artificial intelligence. The lack of physical travel did not hinder the growth of these sectors.
- Government Support and Diplomacy
Both the Indian and Canadian governments recognized the importance of maintaining economic ties during the pandemic. Diplomatic efforts were made to ensure that essential travel for business purposes continued. Special arrangements were made for diplomats, business leaders, and essential workers to travel between the two countries, further minimizing the disruption.
- Prospects for the Future
Looking ahead, the prospects for India-Canada economic ties remain promising. As the global economy recovers from the pandemic, trade volumes are expected to rebound. The strategic importance of both countries in their respective regions, coupled with their shared commitment to free trade and economic cooperation, provides a solid foundation for future growth.
The impact of travel curbs on India-Canada economic ties has been short-term and minimal. Both countries demonstrated resilience and adaptability in the face of the COVID-19 pandemic.
Brookfield Asset Management, Caisse de dépôt et placement du Québec (CDPQ), Canada Pension Plan Investment Board (CPP Investments), Manulife Financial, Bombardier, McCain Foods, Scotiabank, TD Bank, and Tim Hortons are a few of the largest Canadian businesses present in India.
Tata Group, Infosys, Wipro, Tech Mahindra, HCL Technologies, Reliance Industries, and Mahindra & Mahindra are a few Indian businesses that do business in Canada. Along with these businesses, Canada is home to a number of renowned Indian banks, including State Bank of India, HDFC Bank, ICICI Bank, and Kotak Mahindra Bank.
The rapid shift to digital engagement, the continued trade in essential goods, cooperation in innovative sectors, government support, and diplomatic efforts have all contributed to the maintenance of a strong economic relationship.
As the world moves towards a post-pandemic era, the India-Canada economic partnership is poised for further growth and diversification.
