Canada Discovers India, Again

November 12, 2009

When Prime Minister Harper visits India next week, it will come after a meeting with Asia Pacific leaders in Singapore, where he is attending the Asia Pacific Economic Cooperation (APEC) Summit.  This backdrop to Mr. Harper’s trip is emblematic of the new relationship between Canada and India, which has evolved from a transatlantic framework to one which is increasingly transpacific.

There are many who still cling to the notion that the Canada-India relationship today is propelled by the heritage of the Commonwealth and by shared values of democracy and the rule of law.  While these commonalities may constitute a starting point for bilateral diplomatic relations, they do not provide a basis for building a robust, multi-faceted, and forward-looking relationship between the two countries.

India today is a rising power with both regional and global ambitions.  Already the leading economy in South Asia, India is increasingly looking east and confidently forming partnerships with its hitherto more successful Asian neighbours.  Delhi is a member of the East Asian Summit group of 16 countries, which some believe could constitute a future Asian trade grouping.  As it is, India has already signed a free trade agreement with ASEAN and is in advanced negotiations with Japan and South Korea.

At the same time, India’s growing weight in the world economy has earned it a place in the so-called BRIC (Brazil, Russia, India, and China) group of emerging markets.  Brazil, India and China (and to a lesser extent Russia) are arguably the biggest winners coming out of the recent global economic crisis, because of the shift in political and economic weight away from the industrialized world.  The establishment of the G20 as an ongoing forum for leaders to discuss international economic issues – beyond the crisis – is emblematic of the shift in global power.

There is, however, a less glamorous side of the Indian economy, which continues to be hobbled by poor physical infrastructure, the deadweight of excessive bureaucracy, and a fractious political environment.  Most problematic of all is the persistent poverty of rural India.  The World Bank estimates that about 40% of the population lives on less than US$1.25 per day.

In forging a new relationship with Delhi, Canada has to engage not one but two Indias – on the one hand the sophisticated, prosperous, confident, globally minded and regionally connected India; on the other hand an India that seems trapped in very low levels of development and is struggling with the forces of globalization.  It is this dichotomy that in part explains the cessation of Canada’s development assistance to India in 2006 – a move triggered not by Ottawa, but by Delhi.  Even though the country faces development challenges that in some senses are as great as those encountered in Africa, Indian public opinion is such that Delhi must be extremely selective in its choice of aid partners.

In embracing the two sides of India, Canada can forge a relationship that recognizes India as a newly-minted global power broker and economic dynamo, while offering the best in Canadian products and know-how to address the developmental challenges of the Indian economy.  It is as much about tapping into the software and offshore business processing prowess of Bangalore to make Canadian firms more competitive as it is about providing expertise in infrastructure, education and post-harvest technology to help improve the lot of ordinary Indians.

Veteran Canadian diplomats often speak of the difficulty they faced in dealing with the socialistic, inward-looking, nationalist India that was characteristic of the period from independence to the mid 1990s.  Ironically, dealing with India today is in some ways even more difficult, because of the much more heterogeneous nature of the Indian economy and Indian society.  Despite India’s openness to the world, the challenge for Canadian diplomacy is greater than ever.  Prime Minister Harper should plan a few more visits.