Canada’s trade performance in India, 2001-2019 At first glance, Canada-India trade seems robust, with goods exports to India witnessing an impressive average annual growth of nearly 12 percent from 2001 to 2019, surging from US$517 million to US$3.9 billion. Concurrently, Canada’s goods imports from India also grew at an annual pace of almost 10 percent. Moreover, two-way trade in services displayed even more rapid expansion, hinting at the potential unlocked with freer trade.

However, these numbers only reveal part of the story. India’s flourishing economy has led to increased imports from various parts of the world, yet its trade trajectory has gradually shifted away from North America and Europe. Instead, a growing share of its trade is now directed towards China, the UAE, and member countries of the Association of Southeast Asian Nations (ASEAN) like Indonesia, the Philippines, Singapore, and Vietnam.

As a consequence, Canada’s market share in the vast and rapidly expanding Indian market has dwindled. An analysis conducted by Ciuriak Consulting, commissioned by the Business Council of Canada and the Canada-India Trade and Investment Council, demonstrates that Canada’s global share of two-way goods trade with India has decreased from 1.02 percent in 2001 to 0.81 percent in 2021. Over the past two decades, Canada has captured a mere one percent of the growth in global exports of goods, services, and intellectual property destined for India. Additionally, bilateral investment remains underdeveloped, a concerning sign at a time when India is poised for an investment boom.

“Canada has been punching well below its weight in one of the major global markets,” concludes Ciuriak Consulting.

Canada has the potential to perform significantly better. According to Ciuriak Consulting’s estimations, if our trade with India matched the level of business we conduct with similar-sized economies elsewhere in the world, our exports would nearly double. This represents over US$3 billion annually in lost export opportunities. The analysis reveals that Canada’s exports to India in the agricultural, agri-food, and manufactured goods sectors are all less than half of what they should be.

Unless significant action is taken to reverse the trend, this export gap is projected to more than double by 2027 and more than triple by 2035. Maintaining the status quo is not a viable strategy for Canada in this promising and lucrative market.