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Prime Minister Stephen Harper participates in the National Diwali Celebration in Ottawa ahead of his trip to India. (Dave Chan/The Globe and Mail)
Prime Minister Stephen Harper participates in the National Diwali Celebration in Ottawa ahead of his trip to India. (Dave Chan/The Globe and Mail)

Harper seeks to kick-start stalled trade with India Add to ...

Stephen Harper will land in India this weekend with a simple mission: rekindling a number of high-profile trade deals with this rapidly expanding economy that have either stalled or made slow progress.

Making his second trip in three years, Mr. Harper is keen to establish an even more intensive commercial relationship with India, including a free-trade deal, a foreign-investor protection agreement and a nuclear co-operation accord.

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For all Ottawa’s efforts, these discussions have failed to bear sufficient fruit in a country that is merely Canada’s 15th-largest trading partner today, despite an Indian immigrant population here of more than a million.

“There’s a whole lot of stuff going on and it needs a high-level kick in the rear to get moving,” one Canadian government official said.

The Prime Minister is devoting close to twice the amount of time to this trip as to his 2009 visit.

He’ll spend six days travelling through the country of 1.2 billion people, and unlike last time, this visit isn’t tacked onto the itinerary after an APEC summit.

Mr. Harper is coming at a difficult time for the Indian government and will be meeting a distracted political leadership when he arrives.

Prime Minister Manmohan Singh, who’s also being courted by other major countries eager for preferential trade access, is presiding over a stalled economy, a paralyzed parliament and a restive population enraged by a series of corruption scandals.

The pace of progress on desperately needed infrastructure projects and key legislative reform has slowed to glacial, as the vast Indian bureaucracy attempts to shield itself from affiliation with unpopular or corrupt decisions.

Meanwhile, Sonia Gandhi, the president of the ruling party, is preoccupied with the declining electoral fortunes of the Indian National Congress; her governing coalition has lost key partners in recent months, and it is not clear that she can muster the votes she needs to pass any new legislation before the next election in 2014.

All this means Mr. Harper will have to fight twice as hard to get the Indian leadership’s attention.

It was just 18 months ago that he promised voters in the Conservative Party’s 2011 campaign platform that he would aim for a Canada-India free-trade deal by 2013 as a means of cashing in on the growing appetites of India’s expanding middle class.

Today, however, Canadian officials privately call that an “ambitious target,” a diplomatic way of saying it’s a long shot.

Trade-deal talks, launched two years ago, have been frustrating for Canada. Officials privately complain about the Indians, saying negotiators on both sides will conclude discussion in a particular area – “locking it down” in trade parlance – only to find that New Delhi later changes its mind.

“The Indians lock things down and the next time they conveniently forget they’ve locked it. They agree to things and then they don’t agree,” one Canadian official said. “It’s slow, and they’re not as reliable.” A sixth round of trade negotiations takes place later this month in Ottawa.

Sources say New Delhi, keen on Canada’s potash reserves because the chemical is a key ingredient in fertilizer, at one point tried to link the trade talks to a long-term supply agreement. The Canadians balked, saying they would not intervene to tell a private potash company what to do.

India is also facing domestic calls to rethink investor protection deals that grant foreign companies standing to sue for compensation after a series of controversial cases there – decisions that have given New Delhi pause about enacting more of them.

Separately, Canada is facing pressure to help salvage a nuclear co-operation agreement that remains stuck at a diplomatic impasse. Ottawa and New Delhi struck a deal two years ago that would pave the way for a big export business for Canadian nuclear and uranium companies. But Ottawa insists on Canada’s right to verify India’s handling of any nuclear material provided from this country.

Canadian nuclear safety officials are in India trying to hammer out a deal.

The trip is as much about domestic politics as international trade. Indo-Canadian voters in the Greater Toronto Area helped the Conservatives win their first parliamentary majority in the 2011 election.

Mr. Harper will visit Chandigarh in northern India, a major source of immigrants for Canada, including many politically active Sikh voters who have helped the Tories win important seats.

The Prime Minister will also travel to the iconic Taj Mahal to get a picture of him visiting India’s famous white marble mausoleum like so many other world leaders have before.

Finally, he will journey to India’s Silicon Valley where’s he’s expected to announce Canada is upgrading its trade office in Bangalore.

A full itinerary

Stephen Harper’s trip to India marks one of the longest stints of foreign travel for the Prime Minister to date. Where he goes in this complex country of 1.2 billion people is as important as whom he sees. His six-day visit, which starts Sunday, is tailor-made to look good in Canada.

The Taj Mahal, a private visit: Mr. Harper’s private tour of India’s most celebrated monument is a rare privilege – on a normal day, he would share the experience with 7,000 tourists.<QL>Why it’s important: More than any other, this is the photo op that says, “I went to India.”

Delhi, an economic address: In Delhi, Mr. Harper will speak at the opening of a gathering of the World Economic Forum, the first time that body has come to the subcontinent.<QL>Why it’s important: The Indian economy, once a global darling, is in rough shape these days, with growth projections for this year slashed from more than 8 per cent to less than 6 per cent and the government’s economic reform agenda taken hostage by a fractured parliament. But Mr. Harper will be keen to emphasize the vast potential India nevertheless offers to investors.

Chandigarh, an immigration story: The capital of the Punjab, Chandigarh is the source of the majority of Indian immigrants to Canada, and more than half of Canadians of Indian origin trace their roots to the Punjab. In that sense, this is a visit largely for domestic Canadian consumption.<QL>Why it’s important: This week marks the 28th anniversary of the massacre of approximately 3,000 Sikhs by mobs after prime minister Indira Gandhi was assassinated by her Sikh bodyguards in 1984 – in revenge for her decision to send troops after Sikh militants in the Golden Temple in Amritsar. Canadian Sikhs want Mr. Harper to push for “justice” – many of the criminal cases against people accused in the killings are still in the court system, and several high-profile Congress party figures are implicated. India, meanwhile, is keen to see Canada take a tougher line on Sikh-separatist militants who now have global headquarters in British Columbia.

Bangalore, India’s high-tech hub: This sleepy garden city was, until recently, the emblem of the new Shining India high-tech and business dream. Now Bangalore doesn’t conjure up the vision of economic miracle that it did two or three years ago.<QL>Why it’s important: There is still plenty of innovation happening here, at firms such as Infosys and Wipro, and many opportunities for collaboration with Canada.

Stephanie Nolen in Delhi

Follow us on Twitter: @snolen, @stevenchase

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