Why doing business in India is favored by Canadian companies?
A history of people-to-people ties, pluralism, economic engagement, and democracy underpins the long-standing India and Canada business relations. Increasing import-export with the energetic Indian trade services and bringing into force the civil nuclear cooperation agreement in 2013, buried the troubled history between the two countries that was set in motion due to India’s 1974 and 1998 nuclear tests enabled by Canadian technology and uranium.
Following numerous challenges and agreements, Canada India relations have opened doors to the future of global trade and business. Both countries are moving forward to build this critical relationship in the direction of bilateral trade and geopolitical consequences.
Canada India relations
Canada and India share commonalities in Parliamentary structure and procedures. They enjoy a partnership intertwined in many fields such as finance, education, agriculture, IT, and infrastructure. More than 600 Canadian companies have made a mark in India, and are actively pursuing business operations in the Indian market. Canada’s diaspora in the Indian market includes prominent names like Sun Life Financial Inc., McCain foods, Fairfax Financial Holdings Limited, Magna International Inc, Apotex Pharmachem, and so on.
The Canadian business also offers a platform to Indian entrepreneurs and easy access to the largest market in the world present next door. As the third largest startup ecosystem in the world, India hunts for innovative approaches to problems across various sectors. Canada through its Startup Canada initiatives offers multiple avenues to Indian entrepreneurs that can also benefit their economies.
Current scenario of Canadian services in India
At the policy level, both countries are enthusiastic to explore their next steps in negotiations regarding a Comprehensive Economic Partnership Agreement and a Foreign Investment Promotion and Protection Agreement. As Canada is a critical partner for the economic development of India, Indo-Canadian Business Chamber (ICBC) is focused on enhancing the bilateral relationship and promoting areas of mutual interest between India and Canada. On similar lines, the ICBC mentioned its agenda to strengthen the economic ties between India and Canada at the G20 Summit in India.
In 2022, the India-Canada Comprehensive Economic Partnership Agreement (CEPA) negotiations were relaunched and an interim agreement or Early Progress Trade Agreement (EPTA) was considered to provide commercial gains to Canadian and Indian trade services. Moreover, initiatives such as the India-Canada Centre for Innovative Multidisciplinary Partnerships to Accelerate Community Transformation and Sustainability (IC-IMPACTS) have boosted the research collaboration and partnerships between the two countries.
Priority sectors for Canadian companies
In recent years, both countries are working closely on multilateral levels in a number of areas of mutual importance that include the pressing global challenges such as global warming and sustainable development.
With the exponential rise of the remote and hybrid working models in India, immigration of Canadian investment into the Indian marketplace has increased steadily in information technology, telecommunications, and software services. Owing to the ease of doing business in India, Canadian investors dominated the banking, insurance, and financial services sectors, as also the automobile, engineering, energy, education, life sciences, and consultancy services.
Canada has prioritized its sectors and seeks bilateral cooperation as India moves forward in 2023 and beyond. Building remote teams, tapping the right resources, and recruiting high-caliber and skilled talent have restructured the business models. Human resource outsourcing is seen as a strategic advantage for the growth of Canadian services in India as there is plenty of talent in India.
What are the top opportunities in India’s infrastructure services for Canada?
The Canadian government has a strategic advantage in the Indian marketplace, particularly in infrastructure and green energy projects. Canadian investors are supporting the expansion of sustainable urban development in India, planned by the government under the initiatives such as Smart Cities and Skill India.
Canada is weaved into India’s growth story owing to their investments in India’s growing infrastructure. For instance, Fairfax invested $321 million dollars into the Bengaluru international airport in 2016. Since then, other Canadian investment groups like Brookfield have started looking into retail and commercial real estate.
Though not an early investor (only the 23rd biggest investor), Canada is betting on the dynamic growth of India. This was proved by the whooping 40.63% of the total FDI investments in infrastructure and other services from Canada to India.
Why setting up a business in India, a profitable idea for Canada?
India’s openness to the world is a big part of what makes India a favorable place to invest and expand any services. The Government of India has facilitated various policies to make India stronger and more competitive in the business world.
India has improved its ranking by 53 positions in the last two years in the World Bank’s Ease of Doing Business ranking. As per the World Investment Report 2022, India was ranked the world’s eighth major FDI recipient of the year 2020, with the automobile, IT, and telecommunication services being the major recipients.
The advent of data analytics, technology, and high-speed connectivity have steered collaborations in various technology and health sectors fuelling cross-border M&A of around 83% to $ 27 billion dollars. The cherry on the cake of these major investments was the $ 1 billion dollar investment in Indian telecom Bharti Airtel by Google for access to smartphones, networks, and the cloud.
The availability of skills and resources for Canadian business growth
Canadian businesses confidently approach an emerging marketplace like India to expand their services in India. Despite the shift in orientation towards remote working and hybrid working in the post-pandemic period, Canada takes advantage of India’s vibrant market of various sectors such as infrastructure, IT, clean technologies, life sciences, automobiles, healthcare, education, agriculture, and much more.
Canada identified the right skills and resources from varied backgrounds such as digital marketing, designing, engineering, data analytics, research, and clinical data management to foster precise relationships in India. The ease of doing business and the availability of niche skills in an opportunistic market have reaffirmed the breadth and scope of Canadian services and deepened their business roots in India.
Easing FDI regulations, a young and large English-speaking labor workforce, and exceptionally skilled resources have enhanced key partnership prospects and broadened engagement with the world. Among the most important of those partnerships is the one India has with Canada. MNCs, SMEs, and startups from Canada positively view the Indian marketplace as an investment for rapid business growth.