India and Canada considering an interim agreement to speed up FTA talks

While the government did not specify a deadline, officials say the final contours of the deal may be prepared by later this year itself. India has successfully negotiated, and signed a trade pact with the UAE last month, in an unprecedentedly short duration of just 88 days.

The Interim Agreement would include high level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover any other areas mutually agreed upon.

A range of other bilateral trade and investment issues were discussed during the meeting. "Both countries agreed to undertake intensified work with respect to the recognition of Canada’s systems approach to pest risk management in pulses and market access for Indian agriculture goods such as sweet corn, baby corn and banana etc," the Commerce Department said.

Canada also agreed to examine expeditiously the request for Conformity Verification Body (CVB) status to APEDA (Agricultural and Processed Food Products Export Development Authority) for facilitating Indian organic export products.

As in all other trade deals that are currently being negotiated by India, the trade pact with Canada is expected to include the subject of supply chains. On Friday, the Ministers acknowledged the significance of establishing resilient supply chains in critical sectors and exchanged views on collaboration in this area.

They also emphasised enhancing cooperation in sectors such as pharmaceuticals and critical and rare earth minerals as well as in areas like tourism, urban infrastructure, renewable energy and mining.

India and Canada have been engaged on and off in negotiations of a proposed Comprehensive Economic Partnership Agreement (CEPA) or proposed free trade pact.

Meanwhile, both nations had also discussed a proposed Foreign Investment Promotion and Protection Agreement (FIPPA) to facilitate investments. Talks on FIPPA had earlier been stalled by New Delhi’s decision to conduct negotiations for all investment pacts under the framework of the model Bilateral Investment Treaty issued by the government in 2015. Untapped potential

While India's trade with Canada has remained relatively low, the North American country is looked at as a major base because goods can be shipped across the border to the US. This is due to Canada’s favourable trade arrangements with the US.

Bilateral trade with Canada has remained low and stood at $6.36 billion in 2019-20, before the pandemic. It slipped to $5.64 billion in 2020-21 and was at $4.32 billion for the April-November 2021 period. Of this, India’s exports stood at $2.35 billion, while imports were $1.97 billion.

India has maintained a positive trade balance with Canada for the past few years, mainly due to exports of pharmaceutical products ($226 million), organic chemicals ($170 million), diamonds & jewellery ($159 million), iron and steel articles ($144 million) and steel products such as flat-rolled steel and ferroalloys ($135 million).

Products such as coal ($329.5 million), petroleum ($215 million), fertiliser ($163 million), iron and steel ($85 million) and heavy machinery ($82 million) make up the large imports from Canada.