India, Canada aim for closer ties

After 40 years, the countries are entering into partnership in civil nuclear energy

December 15, 2013 06:53 pm | Updated November 17, 2021 05:23 am IST - NEW DELHI

India and Canada are aiming for closer partnerships in civil nuclear energy and hydrocarbons with the dissipation of distrust that had kept them estranged for 40 years after India conducted a nuclear test in 1974.

India will take the first cargo of oil sourced from Canada’s east coast in January and Indian refiners are interested in importing Alberta blended bitumen from its Saint John terminal.

This relationship would be supplemented by a “collaborative approach” in the civil nuclear sector, decks for which have been cleared with the signing of a civil nuclear accord and finalising of the administrative arrangements, High Commissioner for Canada to India Stewart Beck told The Hindu.

Canada’s ties in the nuclear sphere with India began in the mid-50s and lasted till India’s first nuclear test in 1974. Last year, Canada closed that chapter when its Foreign Minister John Baird said his country had “turned the pages of the last century.”

Canada’s ice-free marine terminal at Saint John would cater to very large crude carriers (VLCC) thus making the transportation economical. “Indian refiners like that product and there will be significant benefits for them,” pointed out Mr. Beck.

The two sides have just completed an energy dialogue which has been elevated from the bureaucratic to Ministerial level. Consultations on foreign policy issues have also picked up and External Affairs Minister Salman Khurshid visited Canada in September for this purpose.

“The idea of developing shale oil and gas, mainly by the U.S. and Canada, has galvanised the geopolitics of the energy market,” noted Indian Council of World Affairs scholar Zakir Hussain. Three scenarios might emerge. “First, the lowered gas prices will force key producers to readjust production and they may consider forming a cartel; second, gas may begin to be independently priced; and third, this pricing would have an effect on oil prices,” says Dr. Hussain.

“We are now putting in force a civil nuclear partnership. India has several reactors derived from Canadian technology but since then it has gone on its own path of development. We are now in a situation where the two can talk to each other. There is a huge need in India of Uranium which we can sell,” said Mr. Beck.

Both Prime Ministers had set the bilateral trade target at $15 billion by the end of 2015 fiscal. It was to be assisted by a Comprehensive Economic Partnership Agreement (CEPA). Even as CEPA continues to be discussed after eight rounds of negotiations, Mr. Beck is pessimistic about the bilateral trace target.

However, he forecasts a breakthrough in investments as Canadian pension funds are looking at India’s infrastructure requirements. Canada Pension Plan Investment Board (CPPIB) has already announced investment of $200 millions. This is a small amount but a precursor to more such funds lining up to invest in India such as the Ontario Teachers’ Pension Plan (OTPP) which is also at an advanced stage.

Mr. Beck sees education as a low hanging fruit and he claims Canada’s efforts in this direction are not about attracting Indian students to his country but to replicate the Canadian system of strong elementary and high school systems. Students then opt for either university or vocational with no stigma attached to the latter.

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