Are Indo–Canadian Relations Still Short of a Strategic Partnership?

by J Paul Zachariah*

When the Prime Minister of Canada, Justin Trudeau, planned his weeklong visit to India, the Canadian establishment would have never anticipated the hugely negative publicity it received in the Indian and Canadian media. Prime Minister Trudeau’s official visit, which began more like a family vacation, was, in fact, not even a shadow of the Indian Prime Minister Narendra Modi’s historic visit to Canada in April 2015, when Stephen Harper was the Prime Minister.

If Prime Minister Modi’s Canadian visit resulted in Indo–Canadian relations maturing into an effective partnership, the one indelible takeaway message from Trudeau’s visit was ‘Khalistan’, apart from his ill-advised choice of traditional Indian wear. And this, unfortunately, would loom large over the whole visit leading to a series of events and non-events that compelled Canada’s ‘National Post’ to have this as their front-page headline – “Colourful, classy but snubbed”. One commentator on CNBC went as far as calling the visit a ‘slow moving train wreck’.

However, not all may be lost with this visit. A two-way trade deal amounting to C$1 billion was inked, with Indian companies pledging to invest C$250 million in Canada, particularly in the pharma and IT sectors. On the flip side, of the C$750 million coming to India, about C$480 million would be from Toronto’s Brookfield Asset Management to buy a 1.25 million-square-foot office space in Mumbai.

What then is the crux of India’s relations with Canada? How much does a US$2.4 trillion India need a US$1.6 trillion Canada, and vice-versa? Is there a real strategic dimension to the bilateral relations of these two nations, when compared to India’s recent strengthening of ‘strategic partnerships’ with countries like Israel, Japan, Australia and France?  

The Nature of Indo-Canadian Relations

Indo-Canadian relations, since India tested an atomic device in the 1970s, had been modest and never evoked much interest in either party, except for the Indian diaspora and bilateral trade.

Indian Diaspora

Canada has one of the largest concentrations of Indian diaspora. About 3.54 per cent of Canadians (1.6 million) have an Indian heritage. In 2016, remittances to India from Canada amounted to US$2.6 billion, as per a World Bank report. With over 100,000 Indian students studying in Canada, India is the second largest source of international students for their universities and colleges.

Trade & Industry

Statistics from government sources show that bilateral trade between India and Canada was worth US$6.13 billion in 2016–17, making India Canada’s largest trading partner in South Asia. With a value of over C$1.1 billion and accounting for over 27.5 per cent of Canada’s global pulse exports, pulses formed the largest part of Canada’s exports to India. Over 400 Canadian companies operate in India, while Canada plays host to more than 1000 India companies. Canadian and Indian newspapers report that Fairfax Holdings, owned by Prem Watsa, a prominent Indo-Canadian, has acquired a 51-per-cent stake in the Catholic Syrian Bank, a Kerala based private bank. The C$200 million in this deal is part of the C$750 million Canadian FDI into India that PM Justin Trudeau was talking about.

Nuclear Energy

Canada, under Prime Minister Pierre Trudeau, father of Justin Trudeau, had banned uranium exports to India after it conducted its first atomic test in the 1970s, where Canadian radioactive products were extensively used. It took a rather long time for the subsequent thaw in Indo–Canadian nuclear relations. Though a Nuclear Cooperation Agreement (NCA) with Canada was signed in June 2010, the process dragged on, until Narendra Modi’s visit to Canada in 2015, when India’s Department of Atomic Energy signed a C$350 million contract with the Canadian company Cameco Corporation to purchase 3.2 million kilograms of uranium concentrate over the next five years. The first three shipments have already arrived in India. 

Canada’s Defence Exports

Canada has a rather strange and restrictive policy on the export and import of strategic and defence items mandated by their Export and Import Permits Act. This Act provides for an Export Control List (ECL), which includes military, dual use, and strategic goods and technology. Items on this list can only be sold to a country that is on the Automatic Firearms Country Control List (AFCCL), which presently has about 40 countries, including Saudi Arabia, Turkey, Kuwait and Colombia but not India. Despite this, not all exports are governed by the AFCCL. Government to government sale of items on the ECL is allowed to non- AFCCL nations with an export license from the Ministry of Foreign Affairs. 

Canadian defence exports saw an increase of 89 per cent under Conservative Prime Minister Stephen Harper. The incumbent Liberal government has not cancelled some seemingly controversial arms deals inked by the Conservatives, like the US$12 billion deal with Saudi Arabia. But some others have fallen through, like the recent US$235 million contract with the Philippines for the sale of 16 Bell helicopters. Just days after the Canadian Foreign Affairs Minister Chrystia Freeland said she will not hesitate to stop the delivery of the aircraft to the Philippines if it were to be used against insurgents, the Philippine government cancelled the deal. On the one hand, Canada’s Liberal government behaves like an ‘international do-gooder’ on the pretext of upholding ‘human rights’ and ‘gender equality’, while on the other, they sell military equipment to countries like Saudi Arabia, which has used them in a violent crackdown on minority Shias in the eastern part of the country. Interestingly, the Liberal government of Canada had denied export permit of firearms (under category 2-1 of the ECL) to India in 2016, stating that India was not on the AFCCL. Dwelling on Canada’s ‘feminist foreign policy’ vis-a-vis its arms trade, Srdjan Vucetic, of the University of Ottawa, calls Canada ‘A Nation of Feminist Arms Dealers’ (Vucetic, 2017).

Are India and Canada Strategic Partners in Defence and Security?

Prime Minister Modi’s visit to Canada was intended to give a boost to India’s defence and security cooperation with Canada. During the visit, Prime Minister Modi and Prime Minister Harper paid a visit to the Kanishka Air India Memorial in a symbolic gesture of Indo–Canadian commitment towards fighting terrorism. The two governments claimed there had been, “a robust cooperation on counter terrorism issues particularly through the framework of the Joint Working Group on Counter Terrorism.” India and Canada enjoy a strategic partnership, at least that is what the Canadian government claims. However, a closer look at the defence and strategic aspects reveals a slightly different picture.

India and Canada have not conducted any major joint military or naval exercises, except as part of multilateral exercises like the International Fleet Review or the RIMPAC. The closest to what could be called a bilateral joint exercise was when the HMCS Winnipeg of the Royal Canadian Navy made a port call at Mumbai in May 2017 and conducted joint exercises with the Indian stealth frigate the INS Teg. Considering Canada’s apprehensions on China’s ambitious ‘Polar Silk Road’ that makes the Arctic Ocean and Canada’s ‘Northwest Passage’ susceptible to Beijing’s hegemonic interference, it would be in its best interests to forge a strategic maritime relation with India.

In April 2017, when the Indian born Canadian Defence Minister Harjit Sajjan visited India, there was much talk particularly from Canada on how they wanted to bolster defence trade with India. The Canadian media reported that the value of Canada’s defence exports to India was C$5.4 million in 2015, as per a report by their government. But in 2016, the value of defence exports to India dropped to a mere C$654,320 or just 0.09 per cent of Canada’s total arms exports (excluding those to the US) of C$717 million. Canada has also not registered (till this was being written) for the India Defence Expo 2018 scheduled to be held from April 11–14 in Chennai, though it participated with much fanfare the last time.

With a pro-left Liberal government in power, it might not be easy for Indo–Canadian bilateral relations to develop into an effective strategic partnership in defence and security. However, Indian and Canadian businesses could develop stronger relations in some industries, where Canada offers world-class technology and services like aerospace, electronics, simulation and training, textiles, and satellite and space technologies. Already, India’s growing domestic airline industry, including the largest player (Spice Jet) and the newest player (Zoom Air) has started buying new aircraft from the Canadian company Bombardier.

Bridging Barriers

India and Canada are yet to finalise two very important agreements, the Comprehensive Economic Partnership Agreement (CEPA) and Bilateral Investment Promotion and Partnership Agreement (BIPPA/FIPA). It is hoped that these agreements would create a healthy environment for business and investment through legally binding rights and obligations.

“Bridging the Barriers with Canada,” was how the personal web portal of Prime Minister Narendra Modi titled its statement on his visit to Canada in 2015. It seems even in 2017 that process is yet to be effectively reciprocated by Prime Minister Justin Trudeau and his Liberal government. 

“Let’s not forget there’s a race to get to India’s door. We’re competing against Japan, the French, the Australians, and this is an opportunity for Canada to demonstrate how we can contribute and make a true partnership.”

(Jaswinder Kaur, Director of the Canada–India Centre of Excellence in Ottawa, 2015)

*J Paul Zachariah is guest writer with CPPR.. Views expressed by the author is personal and does not reflect that of CPPR.

References

1.     National Post. Twitter Post. February 20, 2018, 8:14 PM.

https://twitter.com/nationalpost/status/966164252997406720

2.     Pant, Harsh. 2018. Explaining Canadian PM Justin Trudeau’s Chilly Reception in India. The Diplomat, 22 February.

3.     Qing, Goh Dan. 2018. “Justin Trudeau's India Visit Deemed a 'Slow-Moving Train Wreck' amid Claims He Was 'Snubbed'.” CNBC, 22 February.

www.cnbc.com/2018/02/21/justin-trudeau-india-visit-theres-talk-prime-minister-snubbed-by-indian-government.html.

4.     Rabson, Mia. 2018. “Trudeau Announces Canadian-Indian Investment Deal Worth $1 Billion.” The Star, 20 February.

www.thestar.com/business/2018/02/20/indias-top-companies-tell-trudeau-they-will-invest-more-than-1-billion-in-canada.html.

5.     World Bank Bilateral Remittance Matrix 2016. http://www.worldbank.org/en/topic/migrationremittancesdiasporaissues/brief/migration-remittances-data

6.     “World Economic Outlook Database October 2017.” International Monetary Fund, www.imf.org/external/pubs/ft/weo/2017/02/weodata/index.aspx.

7.     Gopakumar, Gopika. 2018. “Fairfax to Acquire 51% Stake in Catholic Syrian Bank.” Livemint, 17 February.

www.livemint.com/Companies/EpFGbwCPNX0Zz5QiTHyLxI/Fairfax-to-acquire-51-in-Catholic-Syrian-Bank.html.

8.     Government of Canada. 2018. “Canada and India Relations.” Global Affairs Canada, High Commission of Canada in India.

www.international.gc.ca/world-monde/india-inde/relations.aspx?lang=eng.

9.     Government of Canada. 2017. “Report on Exports of Military Goods from Canada.” Global Affairs Canada, Ministry of Foreign Affairs.

www.international.gc.ca/controls-controles/report-rapports/mil-2016.aspx?lang=eng#fnb6.

10.   Grevatt, Jon. 14 February 2018. “Philippines Formally Cancels Helicopter Contract with Canada.” IHS Janes Defense Weekly.

www.janes.com/article/77887/philippines-formally-cancels-helicopter-contract-with-canada.

11.   Kwong, Matt. 2015. “5 Reasons India Matters so Much to Canada.” CBC/Radio Canada, 16 April.

www.cbc.ca/news/world/narendra-modi-visit-why-india-matters-to-canada-1.3033018.

12.   Kassam, Ashifa. 2018. “Justin Trudeau Defends Canada's Arms Sales to Saudi Arabia.” The Guardian, 21 March. www.theguardian.com/world/2018/mar/21/justin-trudeau-defends-canada-arms-sales-to-saudi-arabia.

13.   Tuckey, Sarah. 2017. "The New Era of Canadian Feminist Foreign Policy." Canadian International Council. https://thecic.org/the-new-era-of-canadian-feminist-foreign-policy/.

14.   Vucetic, Srdjan. 2017. "A Nation Of Feminist Arms Dealers? Canada And Military Exports". International Journal 72 (4). doi:10.1177/0020702017740156.

15.   Fife, Robert & Steven Chase. 2017. "China Used Research Mission To Test Trade Route Through Canada’s Northwest Passage".  The Globe and Mail, 10 September. https://www.theglobeandmail.com/news/politics/china-used-research-mission-to-test-trade-route-through-canadas-northwest-passage/article36223673/.

16.   Shah, Aditi. 2017. “Bombardier Aims to Double Fleet Size to over 40 Aircraft in India.” Livemint, 9 February.

www.livemint.com/Companies/ViHy21Vh7mWUeO2VgowSaJ/Bombardier-aims-to-double-fleet-size-to-over-40-aircraft-in.html.

17.   “Bridging the Barriers with Canada.” www.narendramodi.in, 18 Apr. 2015. www.narendramodi.in/bridging-the-barriers-with-canada-7442.