india’s Trade Agreements with Europe Signal Opportunity for Canada
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New Delhi – India‘s recent flurry of trade deals with European nations – including the EFTA bloc (Iceland, Norway, Switzerland, and Liechtenstein), the United Kingdom, and ongoing negotiations with the European Union – presents a strategic opportunity for Canada to recalibrate its own trade approach to the rapidly evolving Indian market. These agreements demonstrate a significant shift in India’s trade policy, moving towards deeper economic partnerships encompassing not just market access, but also investment, services, skills, and technology collaboration.
After withdrawing from the Regional Thorough Economic Partnership (RCEP) in 2019, India has actively pursued bilateral and regional agreements with Western economies. This pivot signals a move towards a more compatible and forward-looking partnership for countries like Canada, increasingly aligned with global standards on environment, labor, and intellectual property. Analyzing the specifics of these recent deals, particularly the EFTA agreement, offers valuable lessons for Canada as it seeks to strengthen its Indo-Pacific engagement and rebuild trade ties with India.
EFTA Deal Highlights Potential Areas for Canadian Negotiation
The recently finalized trade agreement with the European Free Trade Association (EFTA) provides a concrete example of India’s evolving approach. The agreement includes tariff reductions on key goods, giving EFTA exporters a competitive advantage in India’s industrial and resource sectors. Specific examples include:
* Aluminum: A tariff reduction to 5% (immediate for Iceland, within 5-10 years for Norway, and within 7 years for Switzerland & Liechtenstein).
* Copper ores & concentrates: 0% tariffs for all EFTA countries, implemented immediately.
* Crude petroleum oil: 0% tariffs for EFTA countries, excluding iceland which receives no concession, with a reduction of Rs 1.1 per tonne.
These concessions demonstrate India’s cautious, purposeful liberalization, particularly in processed food and agri-products. The EFTA agreement’s focus on broader economic collaboration – beyond simple tariff reductions - reflects a new generation of trade pacts that prioritize investment, service mobility, skills advancement, and technology transfer.
positioning Canada for Future Success
india’s growing appetite for comprehensive trade and economic partnership agreements marks a strategic shift toward deeper engagement with Western economies. As both Canada and India look to strengthen their Indo-Pacific engagement, a renewed focus on shared values and priorities could pave the way for a more robust and mutually beneficial trade relationship. By studying the successes and nuances of agreements like the one with EFTA, Canada can position itself to negotiate stronger access terms in future talks, capitalizing on India’s evolving trade landscape.
Edited by Vina Nadjibulla, Vice-president Research & Strategy, and Ted Fraser, Senior Editor, APF Canada
