At the Canada-India Mumbai Business Forum, Prime Minister Justin Trudeau announced a billion dollars in new investment between the two countries.
On Canada’s side of the deal, that means 5,800 jobs and a quarter of the billion dollars in direct investment.
“This was really a win-win morning, and a win-win day for us,” Trudeau told the crowd of about 500 business people Tuesday afternoon.
The industries represented in the 66 new agreements are broad: film, pharmaceutical, steel and tech are just a few of the Indian industries expanding in Canada.
Timeline for investments into Canada vague
In many cases a timeline doesn’t exist at all – at least not publicly. Only a couple of companies have released specific details. IT firm Infosys currently operates in five Canadian cities – it plans to double its operations in the next two years.
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“We see several hundred or more jobs, local Canadian jobs that we can expand into,” Infosys CEO Salil Parekh told the Prime Minister at a meeting Tuesday morning.
Pharmaceutical giant Jubilant Life Sciences plans to invest more than $100 million into its operations in Kirkland, Quebec in the next five years.
What about Canadian companies in India?
As for the $750M Canadian companies are investing in India, the majority goes to the country’s challenged financial sector. Brookfield is spending $480 million to buy Indian investor Essar’s 1.25-million square foot office complex in Mumbai. Fairfax India Holdings Corporation of Canada also announced it’s spending $200 million on a 51 per cent stake in the Catholic Syrian Bank Ltd. It’s the first time the Reserve Bank of India let a foreign body take a controlling interest in an Indian bank.
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Kasi Rao of the Canada-India Business Council called the Fairfax purchase “remarkable,” and a testament to how big business can still be done between the two countries without a Canada-India Foreign Investment Promotion and Protection Agreement (FIPA) in place.
How remarkable is a billion dollar investment?
It’s a lot when you zoom in – Canada and Indian share $8 billion in trade annually, so an eighth of that adds quite a bit.
But in the big picture, it’s still a drop in the bucket. Two billion dollars flows between Canadian and American borders every single day. India has huge untapped potential – with a population of 1.3 billion people and an economy growing rapidly at seven per cent.
But big trade deals like NAFTA have taken Canada’s attention away from India, says Goldy Hyder of Hill & Knowlton Strategies.
“It’s a good start. Beats the alternative of no jobs and no investment,” he said of Trudeau’s announcement.
“I think the Prime Minister has done an effective job of setting the foundation, if you will for the future, but let’s be clear, this is not a trade mission,” he told reporters at the event in Mumbai.
“What it is about is what the Prime Minister stressed, building people-to-people relationships and building relationships will go a long way in the long run.”
No further deals expected on trip
And it certainly has been a long run. Canada and India began FIPA talks in 2005. Negotiations for a progressive trade deal began in 2010, and there have been ten rounds of negotiations since.
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Akash Sahai runs block chain business DLT Labs in both Toronto and India. He thinks FIPA would make things a lot easier for both countries.
“Businesses in Canada that have looked at India as perhaps too difficult, and too foreign and maybe a myth…I think FIPA will remove that myth for them,” he said.
“FIPA is an important issue,” said Rao, even if big business can be done without it. “Canadian corporate boards are approaching their risk tolerance and I think for them to make deeper investments into India, having a FIPA in place is important.”
Rao calls the 500+ turnout at Trudeau’s event an “important accomplishment” and a sign of change, as it would have been a “hard sell” a couple of years ago. “In all my years in the Canada-India space, I have not seen that level of interest.”