Trade opportunities Conference Board of Canada identifies India as an important trade target
Agriculture and food exports to India remain a significant opportunity for Canada, says the Conference Board of Canada, despite continued Indian protection of its agricultural sector.
However, the business-oriented think-tank said expansion will not be rapid and exporters must be patient in trying to break through complicated Indian import rules.
Dairy products are among the export opportunities, although Canada’s dairy supply management system does not emphasize exports.
“Agricultural commodities are not growing nearly as quickly as manufacturing and services (in exports to India),” the conference board report said.
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“Still, we include a few of the most promising agricultural sectors, with sugar, dairy, fruits and vegetables (including pulses and lentils) topping the list.”
The report also said there may be opportunities for exporters beyond direct commodity exports.
“With the opening up of India’s retail sector to greater foreign direct investment, related opportunities to sell agricultural products may open up along the supply chain,” it said.
Food imports into India were worth $9 billion US in 2010, with Canada claiming a small share of that total, the report said.
The conference board urged the federal government to pursue current trade talks with India.
“The country still applies tariffs on many manufactured goods and very high tariffs on agricultural goods.”
It also urged exporters to be patient.
“Even in pockets of policy openness, India can be an extremely challenging market,” said the report.
“Moreover, sector strengths, business cultures and policies vary from state to state. Companies need to be persistent and patient to cope with and overcome the myriad challenges of doing business in India.”
The report did not speculate on the value of potential new agricultural and food trade into the Indian market.
However, it did argue that emerging and fast-growing markets such as India must be the Canadian focus. The past has been dominated by over-dependence on exports to developed economies, and in particular the United States.
“Canada’s global export performance has been weak,” it said.
“The 2000s were a ‘lost decade’ for Canadian exports of goods and services with essentially no growth in trade volumes over this period. This largely reflects that the slow-growing U.S. market dominates Canada’s trade, and that Canada’s companies are under-exposed to fast-growing markets.”
