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India and Canada to re-launch the Comprehensive Economic Partnership Agreement

  • Posted By
    10Pointer
  • Categories
    World Affairs
  • Published
    14th Mar, 2022

Recently, India and Canada held the fifth Ministerial Dialogue on Trade & Investment (MDTI), where Ministers agreed to formally re-launch the negotiations for India-Canada Comprehensive Economic Partnership Agreement (CEPA).

Context

Recently, India and Canada held the fifth Ministerial Dialogue on Trade & Investment (MDTI), where Ministers agreed to formally re-launch the negotiations for India-Canada Comprehensive Economic Partnership Agreement (CEPA).

  • They will also consider signing an Interim Agreement or Early Progress Trade Agreement (EPTA) that could bring early commercial gains to both countries. 

About India-Canada Trade

  • Total bilateral trade between India and Canada including goods and services crossed $11 billion. 
  • Major Indian exports to Canada include drugs and pharmaceutical products, iron & steel products, marine products, cotton fabrics & readymade garments (RMG) while key Canadian exports to India comprise pulses, fertilizers, coal and crude petroleum. 

Need for India to sign an FTA with other countries

  • India is gearing up to finalize FTAs with the UK, Australia, EU, Canada and other major economies. 
  • The Economic Survey highlighted India’s need for FTAs as it will help it to diversify exports and explore new shores for the promotion of its products. 
    • According to a survey, 40% of India’s exports is limited to just seven countries. 
      • This indicates that India needs to do a lot more on widening its export basket and give a further push to promoting exports to new shores.
  • Moreover, negotiations for FTAs are a part of India’s broader strategy to sign “balanced” trade agreements with key economies. 
    • This move gained traction after India pulled out of the Regional Comprehensive Economic Partnership (RCEP) talks in 2019.

About Regional Comprehensive Economic Partnership (RCEP)

  • RCEP is a regional Free Trade Agreement between ASEAN and 6 other countries, viz. India, China, Japan, South Korea, Australia and New Zealand. 
  • It was finally signed in November 2020 after 8 years of negotiations.
    • Last year, India walked out of the negotiations. 
  • Therefore, it is now an agreement between 15 countries.
    • However, the members have said that the doors will be kept open for India to join the agreement at a future date of India’s liking.
  • RCEP members constitute nearly a third of the global population and 29% of global GDP.

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