rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » 'We've got to get more investment from India'

'We've got to get more investment from India'

March 18, 2009 13:53 IST

Last month, Industry Minister Tony Clement became the fourth Canadian federal minister to visit India this year. His main mission was, he told Rediff India Abroad's Ajit Jain in an exclusive interview, to "encourage foreign direct investment by Indian entrepreneurs and companies into Canada" and also to woo Indian tourists to Canada. 

Clement conceded there's a lot of unutilized potential in Canada-India ties -- especially on the economic front. He met his Indian counterpart Kamal Nath for a lengthy discussion on how bilateral trade can be augmented. Nath noted that momentum needs to be built up as FDI from Canada to India from 2000 to 2008 has been only $262 million, just 0.27 percent of the total FDI in India in that period.

This was not your first India visit, was it?

No. I first went to India as Ontario health minister in February 2003 and I also went to India in my private capacity in January 2004. Last month I went to India as Canada's industry minister.

Did you notice any changes?

The dynamism in India has only grown over the years. There's great progress in the country, the Delhi Metro for example. Last time I was in Delhi they had just put the shovel on the ground. Now the Delhi Metro has 70 stops already in place. There's tremendous transformation in the country. There's still lot of dynamism in the Indian economy. They are concerned about the [global] downturn but they are also quite confident. With 80 percent of their production geared to domestic demands, they are more insulated as against other economies.

At the same time, India has a number of international groupings looking to spread their wings there. That was one of the reasons I was there -- to entice Indian entrepreneurs to either invest in Canada or the Indian companies that are already operating in Canada to invest more in our country.

Total foreign direct investment between India and Canada is just $700 million.

These statistics are not as accurate as we would like these to be. Say, the company may involve a third country. Say, Magna. It may be the Austrian version of Magna that makes the investments in India. But we consider Magna a Canadian company. It may appear as Austrian investment [in India] but we know it is a Canadian investment. Also, the India-based subsidiary of Essar Global bought Canada's Algoma Steel for $1.7 billion in 2007. Earlier, Dofasco of Hamilton was acquired by Arcelor of Europe for $4.7 billion and Arcelor was later bought by Mittal Steel.

For whatever reasons, these amounts are not captured in Canada-India FDI figures. So, these are the kind of things that make Canada-India FDI figures look small.  On the other side actual purchases of the Canadian companies don't appear in those fields.  They consider these as mergers or some other categories. 

All said, we've got to get more investments from India, no question about it. 

India-Canada bilateral trade too is worth just $4 billion.

That's why I was in India. And International Trade Minister Stockwell Day also visited India a few weeks earlier than me. His visit too was very successful.

Part of my mandate is to get more foreign investment into Canada. I was there to encourage Indian companies to realize Canada is open for business and it is good to invest in Canada. Our banking sector is a lot stronger and there certainly are growth opportunities in Canada for Indian companies.

That, along with tourism, was the purpose of my mission to India. We enter the Indian market through leisure tourism so that the Indian middle class comes to Canada and spends their tourism dollars in our country.

I met over 100 businesses during my five-day visit -- [from the] infrastructure, auto, auto parts, pharmaceuticals, telecom and IT sectors and I also met companies in tourism, tour operators. I should say the whole gamut.

Is Brand Canada now established in India?

There are wonderful connections between India and Canada that have grown over the past few years. Take for example families and friends connections through the 1 million plus Indo-Canadians; Bollywood has now described Canada as a country to distribute their films. So, there's a whole function of deep connections between the two countries and they are becoming deeper. We really have to take advantage of that.

I was the fourth Canadian minister to be in India in January and February. That really made an impact. It was commented on in the Indian news media and certainly illustrated Canada's interest in strengthening our relationships.

Would you say India-Canada relations are devoid of irritants?

There's always irritation here and there, but we are two democracies. India is obviously the largest democracy in the world. We share the rule of law. We share the same inheritance. Added to that is the million-plus Indo-Canadians. So, all of these things bind us together and I am very hopeful our relationship is going to grow.

Did the business people India you met express any concerns about visas, etc?

The issue is the larger economic problem in the country. Our strength is stronger in the banking sector. The fact is we are not the United States, and we don't have over trillion-dollar deficit. We are not even the United Kingdom, for that matter. 

Certainly, with the tourism sector we did talk about the visa problems. We accept over 100,000 visa applications over a year now. Their concerns about visa problems have already been passed on to my colleague Jason Kenney, minister for citizenship and immigration. We have undertaken to spend more time with them from the Canadian high commission to let them know how the visa applications are going, the rate of approval so that they are up to date and they know what's going on. We are a lot more efficient in dealing with visa applications than other countries, including Australia. We've got to keep that high efficiency ratio.

You also met Indian Commerce Minister Kamal Nath.

We discussed the respective state of our economies and obviously the recent economic downturn. We agreed Canada and India should work together to resist protectionist measures from the US Congress, or other places in the world. We talked about two-way investments and talked about our new budget bill that makes Canada even more investor-friendly than before. And certainly we talked about how we can get more bilateral commercial exchanges. We talked about, for instance, Canadian CEOs, who had had discussions with Indian CEOs and  their bilateral exchanges couple of years ago. We wanted to follow up on that. Mr Nath  and I are working  on it.

Did you discuss the proposed Free Trade Agreement?

We did talk about that. I encouraged Mr Nath to finalize that. Hopefully, we will sort out more major issues. Hopefully we will have more free trade in the future. 

Minister Kamal Nath was very open to that. We established a very good relationship. My meeting with the Indian minister was almost last as the Indian politicians are now off to campaigning full time for the general elections in April.

It was a good meeting with Mr Nath. He's a good friend of Canada. He knows a lot of Canadian politicians. He studied at McGill University in Montreal. Minister Nath knows Quebec Premier Jean Charest very well. They were environment minister at the same time.

Elections in India could lead to a change of government in New Delhi. Can that impact ongoing Canada-India discussions?

I don't think so. I met Opposition politicians from the Bharatiya Janata Party.  I think it is safe to say whosoever may win the election, we will be working closely with India as there are greater India-Canada interests.

Was there any discussion on Indian Prime Minister Manmohan Singh's invitation to Prime Minister Stephen Harper?

Our high commissioner in India is very well aware of the invitation and that's all I will say at this time. I hope we can find a mutually convenient time for Prime Minister Harper to visit India.