How will India-Canada free trade affect us?

More foreign-made goods could soon be coming to your nearest store, thanks to a potential free trade agreement between India and Canada.

This morning, the two country’s leaders announced that they plan to begin discussions on a comprehensive trade pact.

While it may take many months before the details are worked out, when it does happen Canadians can expect to see more Indian-produced products on store shelves, and perhaps cheaper prices for items already imported from the Asian country. Free trade agreements generally do away with additional taxes or costs associated with importing and exporting. That means, says Paul Ferley, RBC’s assistant chief economist, that there’s a “prospect for potentially lower costs for goods.”

He adds that an agreement would also result in a more diversified mix of products coming into our country.

The agreement should be a boon for business owners, who could open India-based offices, or simply target consumers in the country. Trade between Canada and India totals about $4 billion — the goal is to boost that to $15 billion.

Rana Sarkar, president and CEO of Canada-India Business Council says the two countries could start exchanging everything from energy to technological services. He cites the automotive sector as an example of one industry that will benefit from a free trade agreement. The auto business is becoming increasingly more global and more Indian citizens are buying cars. “We need to be present with supply chain companies in this market,” he says and the agreement will help get Canadian companies there.

More generally, an agreement would assist our economy, as we’d be able to rely on another country than the U.S. for exports. With Americans buying less and our rising dollar hurting Canada’s manufacturing sector, the country needs to find other place to sell to. Ferley says India won’t replace the U.S. as our biggest trading partner, but it doesn’t hurt to have another large market to send our wares to.

But, with every free trade agreement comes worries that Canadians could lose jobs. We’ve already seen Canadian companies hiring Indian-based call centres to field customer inquires and that outsourcing could continue and even pick up.

However, the RBC economist says Canada could see an increase in jobs too — or at least an offset — as Indian companies set up offices here. Canadian job seekers, says Ferley, should try to identify where new opportunities for work will pop up.

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