The CEO of the Canada-India Business Council says the recent India election win by opposition leader Narendra Modi and the Bharatiya Janata Party (BJP) bodes well for Canadian business.
Peter Sutherland, also Canada’s Former High Commissioner to India, expects to see a free trade agreement between Canada and India signed by the end of the year now that a business-friendly government is in charge.
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Sutherland says free trade talks have been in "a stage of abeyance" while the lengthy election played out. Now that it's over, Sutherland said things could start to move quickly.
'I think they will want to get this thing done.' - Peter Sutherland, Canada-India Business Council
"With a BJP government, which is more business oriented, I think they will want to get this thing done, and get it done by the end of the year." he said. "If they put their minds to it, I think they could do it."
Canada and India began formal free trade discussions in 2010.
"It shows both governments are focused on removing obstacles on doing business," Sutherland said. "Most importantly, for the small and medium-sized businesses in Canada, it removes obstacles in getting goods across the border."
India is in the throes of rapid urbanization and globalization just as the youth population skyrockets.
Modi ran a slick campaign that promised a revival of economic growth.
India's middle class 'wants more'
Sreeram Chaulia, a political analyst and dean of the Jindal School of International Affairs, said the BJP's image as a purely capitalist, pro-business party resonated across India. That image contrasts with the outgoing Congress, which the BJP handily defeated.
"A lot of ordinary people believed in (Modi's) message and wanted to give him the strong mandate he was seeking, to see if he could really change things in India," Chaulia said. "There has been growth in the middle class, so of course why have they punished the incumbents? Because they want more, obviously, something more than subsistence. They want upward mobility."
Sutherland said India has roughly 11 million young people entering the workforce each year.
He said the country also has "a growing and burgeoning economy."
Bombay's Stock Exchange soared to a record high of more than 25,000 once preliminary election results showed Modi would storm to an election win.
Canada's auto, energy sectors could cash in
Sutherland said Canada's energy sector, including oil and gas and even nuclear power, could take advantage of a growing Indian economy.
Canada and India signed a nuclear pact in June 2010.
Sutherland also said the agri-food sector is “a major concern” for India.
Ontario's manufacturers could benefit from the BJP win and a free trade agreement.
"Automotive parts is a huge opportunity in India," Sutherland said. "They have a big marketplace, 1.2 billion people, rapidly becoming middle class, starting to buy automobiles for the first time.
"That creates opportunity for auto parts manufacturers."
Trade between Canada and India in 2010, when free trade talks started, was fairly low. The year before talks, two-way trade hit a modest record of $4.2 billion.