Canada-India trade is robust and continues to be a priority market for Export Development Canada (EDC) and the Government of Canada.
In 2019, Canada did more than $4.5 billion worth of trade with India, making the country Canada’s ninth-largest export market.
Canada exported more than $65 billion of goods to Asia in 2018, of which the lion’s share went to China and Japan. Sales to India accounted for 7% of Canada’s exports to Asia, making it the fourth most significant export market for Canada in the region.
Intrigued? Here’s a few more reasons you should consider joining fellow Canadian exporters on this exciting ride:
- Since 2016, we’ve had numerous ministerial visits.
- EDC has had permanent representation in Delhi since 2005 and Mumbai since 2007.
- From 2014 to 2018, we facilitated $9.97 billion of trade between India and Canada, of which $5.5 billion was direct financing.
- In 2018, 449 Canadian companies benefited from EDC support for export to India and almost 65% (287 companies) of these were small- and medium-sized enterprises (SMEs).
Although there are challenges to doing business in India, it’s a country with tremendous economic potential and has made great strides in transforming its business environment into an attractive place to invest. In the 2014 Ease of Doing Business index, India ranked 130th out of 190 countries. As of 2019, the country is ranked 63rd. While the country is currently going through a rough patch, with economic growth dipping to 5% in 2019, its potential growth rate is estimated to be in the 7% range.
Top opportunities for Canada-India Trade
Today, trade between our two countries is strong. India has been Canada’s ninth-largest export destination, with exports growing at an annual average of 8% between 2009 and 2018. Top exports in recent years have included minerals, vegetable products (peas and lentils), and chemical products (potash).
In a 2018 EDC webinar entitled, India: Where your sales go to grow, one of the key areas of discussion focused on the top opportunities for Canadian exporters to India, which included:
- information and communications technology as a value-chain enhancer with equipment and services;
- infrastructure and power, including urban development and specialty products as add-ons to traditional equipment;
- oil and gas with equipment and services; and
- agri-food’s supply chain logistics and infrastructure.
At a general level, India presents opportunities for Canadian exporters due to its large scale and rapid change. For example, India is expected to more than double its renewable energy generation capacity by 2022, construct 100 new airports by 2025, and add 60,000 kilometres of roads in the next five years. It’s possible that by 2030, India may be the third-largest economy in the world.
How EDC makes connections between large corporates and SMEs
We recognize that it’s expensive for SMEs to break into new markets. Our Business Connections Program for international buyers creates an opportunity for EDC to introduce Canadian companies to their supply chains and promote Canadian capabilities as an added value for international buyers.
EDC’s mandate allows us to provide financing to international companies to boost existing procurement from Canada. With our financing in place, these international companies work with us to take a close look at potential Canadian suppliers when buying goods and services globally. Over the past five years, 86 Canadian suppliers have benefited from our Connection Financing relationships in India.
Although India has made significant improvements to facilitate business, doing business there isn’t without its challenges. Exporters may find that tariff barriers reduce their ability to compete on cost and experience challenges due to administrative and legal red tape, and the long distance to market.
EDC encourages potential and existing exporters to leverage our connections program and the information and resources housed by EDC and by Government of Canada’s Trade Commissioner Service. Both EDC and TCS have Canadian-based employees dedicated to the India market and staff based in India.
On-the-ground market intelligence from TCS
Speaking at the January 2020 EDC webinar, Taking your business to India, Lindsay Margenau, TCS’s senior trade commissioner in Delhi, noted that Canada has eight missions in India at which a dedicated team of 50 trade commissioners are working to provide Canadian companies with on-the-ground intelligence and practical business advice about doing business in India.
“Our trade commissioners in India can help you navigate the complexities of the market,” Margenau said. “Whether you are looking to export, tackle market access issues, pursue joint ventures, enter strategic alliances or seek technology and R&D partnerships, we encourage you to reach out to the trade commissioners.”
Margenau noted that in spite of recent gains in the Ease of Doing Business index, India remains a very challenging market. She shared advice for companies to consider when determining whether they should do business in India, including price, competition and market access issues. For businesses that do decide to enter the market, she provided guidance on how to build a market strategy.
She said Canadians have numerous advantages in the Indian market, including a positive reputation with the “Canada brand,” which is known for reliable, high-quality products and services. India is also Canada’s largest source of international students. For that reason and several others, including Canada’s large Indian diaspora, the two countries have strong people-to-people ties.
Finally, Margenau encouraged Canadian exporters and would-be exporters to inquire about facilitation programs and funding, which are offered by the TCS, including the Canadian Technology Accelerator that will launch in 2020, and the CanExport program, which offers funding for business development activities in India.
5 things you need to know about doing business in India
- India is a price-competitive market. Consumers and businesses often prefer cheaper prices.
- India is a relationship-driven market and persistence is key. If you want to do business in India, prepare to work hard.
- Don’t think of India as one market. Refine your strategy to be sector-specific or region-specific and then develop relationships from there.
- Seniority and hierarchy matter—usually only the most senior person speaks at meetings.
- Vegetarianism is widespread, so be mindful of that if booking business meals.