The Canadian government hopes India’s new administration under Prime Minister Narendra Modi will finally sign and implement a bilateral foreign investor protection treaty that was negotiated years ago but has languished since.
Negotiations on the deal – which would help guarantee legal rights to Canadian and Indian investors doing business in each other’s countries – were concluded more than five years ago. But India’s previous Congress-led government later said they had concerns with the agreement, and the process has not progressed since then.
Ed Fast, Canada’s International Trade Minister, said he now hopes Mr. Modi will send a message to Canadian investors that failed to arrive under India’s previous Congress government, which had been India’s traditional ruling party until it suffered an historic defeat in India’s recent national elections.
“We believe that this agreement will send a very clear signal that India is open for business and is prepared to protect Canadian investment,” Mr. Fast said in interview. “We’re certainly inviting Prime Minister Modi to now have his government sign the agreement. The Canadian government will sign the agreement. And it will send a very clear message to the business sectors on both sides that we’re on the threshold of a new, much more robust economic partnership.”
Mr. Fast, who has spoken out about the stalled negotiations before, said the federal government has had Mr. Modi “on our radar” long before the Indian politician led his right-leaning, Hindu nationalist Bharatiya Janata Party (BJP) to a resounding electoral victory in May. In 2008, while Mr. Modi was still the chief minister of the northwest Indian state of Gujarat, Canada opened a trade office there, and Stewart Beck, Canada’s high commissioner to India, also addressed Mr. Modi’s well-known Vibrant Gujarat investor summits.
“I’ve met with him on a number of occasions,” Mr. Fast said. “He was very very helpful. He certainly came across as someone who got things done.”
Mr. Modi campaigned mainly on economic issues, pledging to revive growth in the world’s largest democracy. In Gujarat, where he was chief minister for more than a decade, admirers say he made it simple to set up and grow businesses in a country that is renowned for its bureaucracy and red tape, and wooed foreign investors – such as Bombardier and McCain, which both have factories in Gujarat. Critics, however, point out that his government did little to stop vicious anti-Muslim riots that flared across his state in 2002, and say that he attracted businesses by giving away land and cutting taxes.
Canada, which sent more than $720-million worth of lentils and other pulses to India in 2013 among other goods, is also negotiating a free trade agreement with India, but talks on that have been going “quite slowly the last couple of years,” Mr. Fast said.
“We would love to see that negotiation reinvigorated,” he added.