The Modi Visit – Part 2: Canadians express interest in free trade with India, doubts about nuclear deal

MOST Canadians are aware of the fact that India’s economy is expanding fast. To put this into context: more than twice Canada’s own growth rate. Ahead of Indian Prime Minister Narendra Modi’s visit, analysts have widely canvassed expectations on the Indian leader to open up markets to foreign investment, deliver more economic growth at home, and improve the living standards of ordinary citizens. How do Canadians view India’s current growth in terms of their own national prospects?

* One-in-five opted to characterize it as a “huge opportunity – it’s a can’t miss”;

* A full majority of six-in-ten described it as an “important opportunity – but it depends on what we’re doing with other countries” ;

INDIA POLL 4* While the remaining one-in-five dismiss it as “not much” or “not an opportunity at all”.




Trading preferences in context:

While the above results may indicate a Canadian population that is enthusiastic about pursuing economic opportunities with India, it is important to consider this country’s current economic and trade framework.

As organizations such as the Asia Pacific Foundation have noted, our current level of trade with India today is a fraction of the amount this country trades with China, and an arguable drop in the bucket compared to Canada’s trade with the US, its most significant trading partner.

To that end, the Angus Reid Institute poll specifically asked Canadians more to consider our overall relationships (trade, culture, diplomacy etc.) with the two Asian giants – India and China – and decide on which nation between the two Canada should be focusing its future efforts. On this question, Canadians are clear – China still comes first.

INDIA POLL 5Nearly six-in-ten (58%) chose China, compared with two-in-five (42%) who chose India. Still, the large number choosing India is notable given the fact that China has been a source of more immigration to Canada (although not by much) and the fact that, as noted above, Sino-Canadian trade currently heavily outweighs the volume of Indo-Canadian trade.




Free Trade with India? What’s the bottom line:

In spite of a strong tilt towards China, the prospect of a Canada-India trade deal – one aimed at significantly increasing the roughly $2.7 billion (US) that we currently export to India – is creating excitement in more than one corner, with the business community and government officials praising the benefits of such an agreement.

Our poll results show the majority Canadians are supportive of this country pursuing a free-trade agreement with India, but that support is far from unanimous. When asked, most (58%) said Canada should pursue such an arrangement, while the rest (42%) were against it.

INDIA POLL 6Views on these two questions are broadly consistent across major demographic groups, although Ontarians are somewhat more reticent than those in other parts of Canada: there is split opinion in Canada’s largest province on a Canada-India trade pact, in contrast to the roughly 60-40 divide across the other regions. Support for a Canada-India free trade deal is also more than twice as high among those who have a favourable view of India rather than unfavourable (70% versus 32% respectively).



But … no desire for Nuclear Deal:


In addition to talking trade, it is widely expected that any conversation between Prime Ministers Stephen Harper and Modi will focus on finalizing an agreement where Canadian companies could supply India with fuel for nuclear power plants in that country.

Both countries share a complicated history on the nuclear file. Canada banned exports of uranium and nuclear hardware to India in 1974 after New Delhi used Candu (Canada Deuterium Uranium) technology to develop a nuclear bomb. The result was a palpable drop in temperature on bilateral relations, which became even frostier when India conducted more nuclear tests and declared it had a nuclear weapon 14 years later. According to the Asia Pacific Foundation, the Canadian Prime Minister of the day, Jean Chretien (he had also been Justice Minister in 1974) was embarrassed by the episode.

Relations between the two countries have subsequently warmed like a summer in Mumbai compared to those frosty days. In 2013 Harper signed the Canada-India Nuclear Cooperation Agreement which allows Canadian companies to export nuclear items for peaceful uses, in accordance with Canada’s nuclear non-proliferation policy, ensuring Canadian exports only go to facilities in India under International Atomic Energy Agency safeguards.

INDIA POLL 7Canadians however remain suspicious of providing support to India’s nuclear energy industry. Most surveyed (60%) voiced opposition to Canada helping develop India’s nuclear energy industry, compared to 40 per cent who support it. Opposition is highest in Quebec (69%) and among the lowest in Ontario (56%). Notably, support is also higher among the university educated (49%) and among those who view India favourably (47%).

Despite the high hopes of Modi and Canada’s private sector uranium suppliers, it would appear Canadians are at this stage jaded by the prospect of a nuclear co-operation deal.