We did not yet know the explosive accusations that Canada was going to make against India, but we saw immediately that things were not going well between Justin Trudeau and his host, Narendra Modi, at the G20 summit , in New Delhi, September 9 and 10. While several other guests were entitled to long formal bilateral meetings, the two prime ministers barely spoke for a few minutes on the sidelines of the event.
A few days earlier, Canada had announced that it intended to pause its trade negotiations with India and a few days later, it postponed a trade mission scheduled there next month. All that was known about the quarrel between the two countries was that Canada was against a certain Indian interference in its affairs and India was still against the presence of Sikh separatists in Canada.
It was only this week that we learned the extent of the affair, with Canada accusing Indian agents of being involved in the assassination on its territory of a Canadian citizen of Indian origin linked to the independence movement. Sikh in the month of June. What followed was a call for calm and cooperation in the police investigation by one, an outraged and furious response from the other, then an escalation of the usual diplomatic reprisals. Canadians immediately felt an unpleasant feeling of déjà vu rising within them after years of tensions with China. But perhaps more strikingly, a lukewarm response or embarrassed silence from the United States, the United Kingdom and Canada’s other “traditional allies.”
We should not be so surprised now that we know that Ottawa had already shared with these allies before the G20 the accusations they intended to make and we see with what ardor they still continued to court him. “As for our ongoing negotiations with India, they are aimed at concluding a trade agreement and we are not seeking to mix that with other kinds of issues,” the Prime Minister’s office said Tuesday. British minister, Rishi Sunak, who was literally seen at the G20 indulging in big hugs with Narendra Modi. Earlier this summer, the Indian Prime Minister was received with great fanfare at the White House and the American Congress.
Replace China
There is a simple reason for this. The camp of developed countries is actively seeking a way to reduce its economic and commercial dependence on a China that it increasingly perceives as a rival, but while continuing to benefit from the tremendous economic dynamism of the Asian region. . And then, what is left of the famous great emerging powers of the BRIC (for Brazil, Russia, India and China), wrote this summer in the Globe and Mail a Canadian fund manager, when we remove China, the pariah state that Russia has become and a Brazil drifting economically and politically? India.
It is true that the business prospects there are attractive. Already the fifth largest economy in current dollars and the third largest by purchasing power parity, India this year became the most populous country in the world, with more than 1.4 billion inhabitants. From 7.2% last year, its economic growth should remain the strongest of the major powers this year (6.3%) and next year (6%), the OECD forecast this week.
Its workforce is young, inexpensive and often speaks English. A rare phenomenon for a developing country, around 40% of its exports are in the services sector, particularly information technology, the magazine noted this summer. The Economist. Its rapid economic growth promises a huge domestic market. Its stock market is already the fourth largest, behind those of the United States, China and Japan. Once fragile, its banking sector has been cleaned up and the debt of its companies is low. Like China, India also has significant foreign exchange reserves. What’s more, it is the largest democracy in the world, was built on the principle of the rule of law and can count on a quality free press.
Not without flaws
However, it is not without flaws, experts point out. Often illiterate, only half of its 900 million working-age people are actually in the labor force, perhaps only 60 million of them in formal employment. A strange thing for a country at this stage of its development, observed this summer the economist and columnist of Financial TimesMartin Wolf, its manufacturing sector is not growing, but in decline and accounted for only 13% of gross domestic product last year, compared to 28% in China.
Still too often a victim of its bureaucracy, the cronyism of its elites and its protectionism, India has often disappointed the hopes of takeoff that had been placed in it, noted last month the Financial Times in an editorial. The authoritarian temptation of Narendra Modi and his repeated, and often violent, attacks against religious minorities are raising doubts among foreign investors and numerous criticisms from human rights organizations.
And if India says today it wants to strengthen its ties with Western countries, it is careful not to turn its back on a tradition of distrust and independence towards them. It has, for example, escaped no one’s notice that it refused to participate in sanctions against Russia after the invasion of Ukraine and that it even became the leading buyer of Russian oil.
Canada like the others
Canada knew all this in March 2022, when it relaunched free trade negotiations with India after a first unsuccessful attempt from 2010 to 2017. Seven months later, it imitated several of its partners and revealed to its round a strategy for the Indo-Pacific where India was presented as “an essential partner of Canada”.
Discussions between the two countries seemed to be going well, to the delight of the Canadian business community, with 11 rounds of negotiations in 13 months. Rather than seeking to immediately conclude a general free trade treaty, it was said that it wanted to start by finding new rules improving cooperation between the two countries in certain areas “such as agricultural products, chemicals, green technologies , infrastructure, automotive, clean energy, electronics and minerals and metals.”
We hoped to be able to reach an agreement this fall. It was in May. A month before a Canadian of Indian origin was murdered on its territory.