Agricultural exports from Canada are once again facing uncertainty due to geopolitical events, as the temperature of the relationship between the Canada and Indian governments has rapidly risen over the past week.
Potash fertilizer and red lentils — both mainly produced in Saskatchewan — were Canada’s second and third largest exports to India in 2022, only surpassed by coal shipments.
Word broke earlier this month that trade talks between Canada and India were mysteriously halted, just weeks after Canadian government sources said they hoped to reach a high level trade deal known as an “Early Progress Trade Agreement” with India before the end of the 2023 calendar year.
Interactions between Canada’s Prime Minister Justin Trudeau and India’s leader, Narendra Modi, were noticeably awkward and tense during the G20 leaders meeting in New Delhi on Sept. 9 and 10. Trudeau indicated their discussions were focused on issues around rule-of-law and foreign interference, with no mention of trade.
Then on Monday in the House of Commons, Trudeau dropped the news of “credible allegations” directly linking India’s government to the murder of Sikh separatist leader, Hardeep Singh Nijjar, in Surrey, BC in June.
India’s government immediately dismissed Trudeau’s comments, and called on the Canadian government to crack down on the Canadian Sikh population that wants to see part of India separate to form a country called Khalistan.
Since then, both countries have expelled top diplomats and issued travel advisories regarding the other. India’s government has also stopped issuing visas for Canadian citizens.
The deterioration of the relationship has cast major doubts about the possibility of a trade deal that would result in more predictable rules for Canadian exports, including peas and lentils.
To help us understand Canada’s relationship with India, here’s a breakdown of Canadian exports and other key figures:
Canada’s top 10 exports to India
(in 2022, thousands of Canadian dollars, source: International Trade Centre Trade Map)
- Coal – $1,238,995
- Potash fertilizer – $965,958
- Red lentils – $351,051
- Newsprint paper – $340,431
- Wood pulp – $221,239
- Aircraft – $214,445
- Chemical wood pulp – $152,320
- Diamonds – $147,719
- Waste and scrap of iron or steel – $109,013
- Copper ores and concentrates – $101,503
Other key facts and figures:
- Canada’s total exports to India in 2022 were worth approximately $4.1 billion.
- The Canada-India trade deal, for which multiple negotiating rounds had taken place, was projected to boost two-way trade by as much as $6.5 billion, increasing Canada’s GDP by $3.8 billion to $5.9 billion annually by 2035.
- Nearly 4 per cent of Canadians — around 1.4 million — are of Indian ethnic or cultural origin, according to the 2021 census.
- Over 770 thousand people identified as Sikh in the 2021 census, accounting for about 2 percent of Canada’s population.
- 40 per cent of international students in Canada in 2022 were from India, according to the Canadian Bureau of International Education.
- India surpassed China as the world’s most populous country in April of this year, with an estimated 1.43 billion people, according to the UN.
- Canpotex — Mosaic and Nutrien’s potash-exporting joint venture — signed a deal with three Indian fertilizer companies in September 2022 to export at least 1.5 million metric tonnes to India annually for three years.