Canadian Government - DFAITC - Features Klean Industries for Trade in India

On behalf of the Department of Foreign Affairs and International Trade Canada - Namaskar! It is both an honor and a pleasure to address this distinguished group of Indian and Canadian business leaders.

The first step on the road that brought me here today was the visit of Prime Minister Chrétien at the head of the ground-breaking Team Canada mission to India, one year ago. That visit, as you may recall, brought seven provincial premiers, two cabinet ministers, and representatives of over 200 Canadian companies to India. Exactly a year ago today, January 10, the Prime Minister inaugurated Canada Day at the Confederation of Indian Industry (CII), which honored Canada as your Partner country and gave the Team Canada visit to India a most successful launch. We are most grateful to the CII for this all and for the support it has given to strengthening our business links.

That visit signaled a bold new chapter in India-Canada relations. And it could not have come at a better time. Both our countries have been re-situating themselves in the changing international social, political and economic environment. In Canada’s case, the end of the Cold War has allowed us to expand our ties with a great many more nations, just as it has created the need for more international cooperation.

For India, your new economic dynamism has expanded your interest in trade and the corresponding need for a stable international environment in which trade can flourish. As India becomes increasingly engaged internationally on both the political and the economic fronts, it is emerging as one of the major world players of the 21st century. Canada recognizes this, and we want to give India the priority it deserves in our foreign relations.

As we face the challenges and seize the opportunities that the new international environment presents, we have the chance to build a strong and lasting partnership. By partnership I mean a relationship based on mutual respect and complementarity; a relationship in which both sides benefit; and a relationship that is wide-ranging and balanced.

I would like to outline for you today some of the steps that we in government have taken to build this relationship, not least by encouraging and facilitating private sector partnerships. And I would like to speak about two of the most significant aspects of our bilateral relations: economic ties, and cooperation in security.

Building on Team Canada

The Team Canada visit launched the reinvigoration of Canada-India relations. It was followed by the visit of Minister Gujral to Canada in September. This highly successful visit was crucial to maintaining our momentum and laying the foundations for the agreements we have now reached. Another key event was your [Confederation of Indian Industry] visit to Canada in June.

In response to Minister Gujral’s invitation, I have in my turn come to India. On Wednesday, I met with him to discuss ways in which we could make this enhanced relationship a reality. We agreed to form a Joint Ministerial Committee, which will allow us, along with our respective cabinet colleagues, to consult regularly on a wide range of political and economic issues as they arise.

I will be meeting Minister Gujral again on Monday to officially open the new Canadian office in Chandigarh, the capital of Punjab and Haryana states. This office, in addition to assisting visa applicants, will help build contacts between Canadian and Indian businesses active in the region. It will complement our recently opened trade office in Bangalore and our newly appointed Honorary Consul in Madras. To further expand the services we provide to Canadians, we also intend to appoint an Honorary Consul in this city, Calcutta, in the near future.

As you know, I have not come to India alone on this visit. Building on the Team Canada approach pioneered by our Prime Minister, I am accompanied by a distinguished group of Parliamentarians and the Attorney General of the province of British Columbia. As a sign of the importance of trade and investment in our relationship with India, I have also taken advantage of my visit here to lead a delegation of representatives of Canadian businesses in the telecommunications, insurance, and science and technology sectors. These companies are world leaders in their fields, and they have much to offer India and other countries.

Economic Relations

The expansion of our trade and investment ties is a major element of our enhanced relationship. As a result of the Team Canada visit, 75 business deals worth over $3.3 billion were signed, over 95 percent of which are still active. Canada-India trade in 1995 totaled almost $1 billion. We have seen a dip in trade figures, but the size of India’s market and its rate of growth suggest that our trade could grow significantly in the years to come.

Another reason to predict growth in trade is the complementarity of our two economies. For its part, Canada has much to offer India in terms of high technology as it expands and upgrades its infrastructure. This is particularly the case in the four sectors that we have chosen to focus on: telecommunications and information technology; power and energy equipment and services; oil and gas; and environmental products and services. Canada also has a great deal to offer in the service sector, including engineering and financial services.

In addition to trade, we will be encouraging greater Canadian investment in India. Canada was the ninth-largest direct investor in India; we hope to move up in the standings in the coming years. The Bell/Tata communications project in Andhra Pradesh will be a major factor in boosting Canadian investment.

Investment is not a one-way street either; Indian companies are increasingly investing in Canada. These are smart companies. Investing in Canada gives them free market access to the United States and Mexico through the North American Free Trade Agreement, as well as to Chile and Israel through bilateral free trade agreements. And these investments will benefit India, as the profits these companies make are repatriated to those who invested in them.

Economic Reform

The driving force behind trade and investment, and potential growth in trade and investment, is the private sector. It is people like yourselves. One of the key roles of government should be to facilitate and encourage your efforts. That is why the program of economic reform that India has undertaken is so crucial.

Minister Gujral and I signed an agreement and witnessed two others that exemplify the role of government as a facilitator of reform and liberalization. They involve co-operation in developing India’s private sector, and energy infrastructure, and in improving tax administration. Canada will provide development assistance funding for these projects totaling almost $30 million.

India is to be commended for its perseverance in the reform of its economy. We in Canada know from our own experience with fiscal deficit reduction and trade liberalization that reform does not always satisfy everyone. But we have also found that efforts in these areas can have a substantial positive effect. In the five years since Canada entered the North American Free Trade Agreement, for example, our exports of manufactured products have grown from one-third to close to half of the production. What is more, the greatest strides were accomplished in areas liberalized under the Free Trade Agreement.

Our experience has convinced us that open economies tend to do better at absorbing new technologies that are essential to sustainable growth. Open economies are forced to compete with the world’s most successful exporting countries, and they can more easily adapt because they are constantly exposed to international markets. Again, it is the private sector – business people like yourselves – who are most directly exposed to these benefits of an open, liberalized economy.

Co-operation in Security

Governments today may be leaving the center stage of economic relations to the private sector. But they remain front and center in guaranteeing the most basic conditions necessary for economic growth: peace and stability. Seventeen hundred years ago, the great Indian poet Kalidasa wrote that “a prosperous State is a heaven on earth.” To maintain that heaven on earth, the State must be at peace. Without a basic level of security, prosperity could not survive long.

A good example of the link between prosperity and security is the agreement recently signed by India with Bangladesh on the distribution of Ganges water. This was a positive move, which, by improving relations and regularizing access to an important natural resource, has made both countries more secure. It also allows both sides to provide for basic economic and human needs in a stable, predictable environment.

As a major power and emerging global economic force, India has a key role to play in international and regional security. Canada is eager to work with India in enhancing security and prosperity in a wide range of issues and institutions. With our shared democratic values, India and Canada see eye-to-eye on many security questions, including those relating to Asia.

India and Canada have a long history of cooperation in international security, including our joint efforts under international auspices to bring peace to Indochina, to Cambodia, and to the former Yugoslavia. The challenge before us now is to adapt and work together to combat new types of security threats in a rapidly evolving international environment: terrorism, drugs, environmental degradation, and the abuse of human rights.

In the face of these threats, Canada and India must continue to co-operate effectively, be it in the ASEAN [Association of Southeast Asian Nations] Regional Forum [ARF], in the UN, or bilaterally. To do this we must forge the new tools required to make our multilateral institutions and international diplomacy, in general, more effective.

Indian participation in the ARF, which is emerging as the main forum for institutionalized security cooperation and dialogue in Asia, is crucial. Canada was glad to support India’s successful bid to join the ARF last year. We look forward to India’s contribution to the ARF’s work, and to India’s assistance in making the ARF stronger and more active.

In terms of regional security, Burma is just one example of the key role played by India. As the world’s largest democracy and now as a member of the ARF, India is well placed to deal with a regime whose internal problems and poor human rights record are destabilizing the surrounding region.

If we look more broadly at human security, there is much that Canada can do to work with India to improve poverty-driven problems, such as child labor or environmental degradation. These are issues that concern both Canadians and Indians for a range of reasons, including the social and economic instability and the damage they produce. I have discussed the issue of child labor extensively with Minister Gujral, and I will be announcing some of the ways in which we will co-operate in this regard later today.

Looking Ahead

The new chapter in relations between our two countries does not end with the agreements I have described to you today. Looking ahead, we hope to hold the first meeting of the Joint Ministerial Council in Canada in the first half of the year. In February, Canada will be participating in CII’s international engineering trade fair as the partner country for the environment.

As host of the APEC [Asia Pacific Economic Cooperation forum] process, Canada’s attention will be very much focused on Asia. In this role, we will continue to press for Indian membership in the APEC Working Groups to which it has requested entry. Canada will press for accession criteria that will enable India to join as a full partner.

At the same time, Canada will hold a whole series of activities as part of our Year of Asia Pacific. Our aim is not only to heighten Canadians’ awareness of APEC members and other countries of the Asia Pacific region but also to strengthen the human ties that bind us to the region. In March, India will be featured at the Team Canada Business Conference in Toronto and in the Asia Pacific week in Atlantic Canada. This will be followed by meetings of the Canada-India Business Council in Vancouver, Toronto, and Montreal in April. And in June the Indo-Canadian Chamber of Commerce will celebrate its 20th anniversary in Toronto.


Building up the relationship between India and Canada to reach its full potential will take time. Our aim is a partnership that is rich, comprehensive, and balanced. It should include co-operation not just in the two areas I have focussed on in my remarks today – economic ties and security – but in equally significant areas, such as development assistance and cultural and educational exchange.

History shows that Indian philosophy and culture enriched the lives of the people of Southeast Asia through trade, not conquest. Canada looks forward to enhanced trade relations with India that will offer not only mutual financial rewards but the opportunity to enrich each other spiritually and culturally through greater contact.

A future in which Canada and India work closely together is not just wishful thinking. We have much in common, including deep democratic roots, shared Commonwealth traditions, and a commitment to a just and stable world. We also have important human ties. Over half a million Canadians trace their origins to India; that’s a large number in a country of only 30 million.

But our human links do not end there. They are built through every contact we have with one another, including the growing ties between business people on both sides. As members of the business community, no one knows better than you the meaning of the word partnership. You can play a key role in making our relationship a true partnership, one that strives toward our mutual goal: that of a more just, secure, and prosperous world.

Thank you.

Klean Industries featured an article in DFAIT environmental technology publications for India.

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