Countdown to greater India-Canada convergence

#GS2 #INTERNATIONALRELATIONS

This promising interaction represents a major, deliberate endeavour to boost the bilateral relationship, helping it to cope with challenges of the third decade of the 21st century. 

  • It demonstrates how far the two governments have progressed in just two years, following the setback caused by the differences over the. 
  • And this dialogue creates a template for a judicious merger of government to government (G2G) diplomacy with public diplomacy, and the maturing role of think tanks in the conduct of foreign policy today.

 

Think tanks as the pivot

  • The 1.5 Track Dialogue has been piloted since February 2018 by two think tanks — Gateway House: Indian Council on Global Relations and Canada’s Centre for International Governance Innovation (CIGI). 
  • Their deep three-year-long collaboration has encouraged the governments to focus on the immediate opportunities available in investment, technology and geopolitical rearrangements.
  • The new government in Ottawa preferred to be more cautious on sensitive bilateral issues, and more receptive to New Delhi’s view that the larger geopolitical shifts justified a closer convergence of national perspectives.

Many strong points

  • The other major focal point will be the economic and technological cooperation between the two countries. Foreign policy observers highlight the importance of recent positive trends, as below: Canada-India merchandise trade exceeded C$10 billion in 2019; Canada’s cumulative investment, including foreign direct investment and by Canadian pension funds, is a substantive C$55 billion, according to diplomatic sources. 
  • Addressing virtually the ‘Invest India’ conference in Canada on October 8 (https://bit.ly/3lG7cjH), Prime Minister Narendra Modi pointed out that mature Canadian investors have been present in India for many years and assured them that no barriers would come in their way. 
  • Indian students are increasingly being educated in Canada, and a quarter million of them spent an estimated $5 billion in tuition fees and other expenses last year, a solid contribution to the Canadian economy. 
  • Of 330,000 new immigrants accepted by Canada last year, 85,000 i.e. nearly 25%, were from India. The Indian diaspora in Canada is now 1.6 million-strong, representing over 4% of the country’s total population. Like their brethren to the south, they are increasingly mainstreamed in Canadian politics.
  • The principal areas of bilateral cooperation are best defined by five Es: Economy, Energy, Education, Entertainment and Empowerment of women. In particular, the digital domain holds immense potential, given Canada’s proven assets in technology — especially its large investment in Artificial Intelligence, innovation and capital resources, and India’s IT achievements, expanding digital payment architecture and policy modernisation.
  • Divided by geographical distance but united through clear common interests and shared values, India and Canada will begin their steady journey of progress, this time with a laser-like focus on common goals as well.
  • Rajiv Bhatia, a former Ambassador, is Distinguished Fellow, Gateway House. He also served as Consul General in Toronto from 1994 to 1998.
  • Purveyor of promiseThe latest stimulus package takes into account the jobs crisis in both urban and rural India
  • The most heartening aspect of the Centre’s latest announcement to spur the economy, a package worth over ₹2.65-lakh crore, is the implied realisation that the economy is not yet out of the woods. 
  • Over the past month, with several high frequency indicators registering an uptick, the Finance Ministry has often asserted that a sustainable recovery is under way, hitting out at analysts who hinted that the spike reflected pent-up demand and could be transient.
  • From that standpoint, the fresh stimulus, exactly a month after the LTC cash voucher scheme to revive spending, suggests the government has not taken its eye off the ball while purveying hope and promise. 
  • That the package takes cognisance of India’s jobs crisis and seeks to resuscitate the construction sector — the largest job creator — bodes well. One, it acknowledges the spate of job losses in the formal sector, and rural distress, as the pandemic and lockdowns hit home. 
  • Second, by pushing urban housing projects, introducing tax sops to help primary sales of unsold units worth upto ₹2 crore, and freeing up capital requirements to bid for public contracts, there is demonstration of a commitment to get the maximum bang for each precious fiscal rupee by focusing on a sector with multiplier effects. Apart from creating formal and informal jobs, this would drive up demand for steel, cement and other materials.
  • While some sectors have been lifted with the rising tide of demand (pent-up or otherwise) following the unlocking in September and October, employment-intensive retail, hospitality and tourism remain battered. 
  • Therefore, it is encouraging that medium-sized firms in 26 such stressed sectors as well as health care have been brought under an emergency credit scheme originally restricted to MSMEs. 
  • But ₹2.05-lakh crore of the ₹3-lakh crore scheme outlay has already been sanctioned, so additional allocations may be needed for new beneficiaries. Stimuli such as ₹1.46-lakh crore as incentives for domestic manufacturing investments in 10 sectors will take years to play out. 
  • Terming a ₹900 crore outlay for COVID-19 vaccine research a ‘stimulus’ is somewhat disingenuous, as it should have been made in any case. Outcomes in terms of new jobs (or maintaining jobs in stressed sectors) will rely on creating demand for which there is little direct push. 
  • It is generous of the government to foot PF contributions worth 24% of salary for two years for people getting jobs between October and June, but it is not enough to nudge firms into hiring just because they get an employee at about 3/4th of salary costs — unless there is a foreseeable demand pick-up. 
  • Future measures should be simpler, with a template for economic activities to scale up or down depending on the infection trend. This would help firms plan operations without worrying about the next official diktat under the Disaster Management Act.
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