Canada will lose out in a dispute with India but these countries will gain a lot.

Canada's loss in dispute with India, these countries will gain hugely

The Indian stock market and India's infrastructure projects proved to be a source of excellent returns for Canadian funds. Updated: Sep 26th, 2023

India Canada Dispute: The ongoing dispute between India and Canada has become a topic of discussion around the world. These two countries, who have been friends for decades, have now come face to face. Both countries have expelled each other's senior ambassadors. India has imposed restrictions on visa services for Canada. Now there is a strong suspicion that the effect of bad relations between the two countries will spread far and wide. If this dispute continues, then in economic matters (disadvantages of Canada's economy), Canada is going to suffer the most, while some countries are going to get a big advantage, including its friendly countries.

First will be the bilateral trade effect

Economic relations between India and Canada have been close. According to official Canadian government data, bilateral trade between the two countries was worth $13.7 billion in 2022. It has grown exponentially over the past few years and its effects on Canada's sluggish economy are multifaceted. The two countries were negotiating an early progress trade agreement before the latest dispute. Both sides were aiming to conclude negotiations and finalize the deal by the end of this year. The deal was expected to multiply the mutual trade between the two countries and benefit the Canadian economy by billions of dollars in the coming years. For now, Canada has stopped the talks. So now there is no benefit situation.

Big investment in Indian market

The Indian stock market and India's infrastructure projects have proven to be a source of excellent returns for Canadian funds. Indian stock market is the best performer among emerging markets. As India is a fast emerging economy, the potential of our stock market is immense. This is the reason why pension funds from many developed countries are turning to the Indian market for better returns. Currently, Canada's investment in the Indian market is over $36 billion, and pension fund CPPIB alone has invested over $32 billion in Indian stocks.

Investments for Canada may stop

Many developed countries, including Canada, are investing in infrastructure projects in emerging markets to get better returns on their funds. In this regard, there is no better market than India. According to the statistics of the Government of India, more than 10 thousand kilometers of highways are being built in the country every year. India's spending on infrastructure rose 33 percent to $122 billion this year. Such large-scale work on infrastructure provides an opportunity for funds from around the world to invest and earn better returns.

Most of the students go from India

Canada's biggest loss could be in higher education. Currently, education plays a major role in the Canadian economy. Every year a large number of students from other countries come to Canada for higher education. They first pay fees to Canadian educational institutions in exchange for higher education. Apart from this, as long as he stays in Canada during the course, it accounts for a large share of the overall consumption. Indians make up the largest number of foreign students coming to Canada. India alone contributes about 40 percent to this figure.

Such a contribution to Canada's economy

According to a report, Canada receives about 30 billion dollars from international students every year, i.e. Rs. 2.50 lakh crores. 40 percent of this ie Rs. More than 1 lakh crore is contributed by the students of India alone. A report states that an average of 1.36 lakh students from Punjab alone go to Canada every year and they contribute 70 thousand crore rupees annually to the Canadian economy.

The controversy began to have a wider impact

The impact of the dispute between India and Canada is now becoming wider. If the dispute escalates, it may become difficult for Canadian funds to access the Indian stock market. It is natural that investment avenues in infrastructure projects are the first to close when relations are strained. Negotiations on the trade front have already stalled and further damage could result from tightening scrutiny. Although there is no restriction on study visas, academic matters are also affected.

Indian students started looking for alternatives

Canadian educational institutions are trying to reassure Indian students, but the uncertainty has led Indian students and their families to look for alternatives. Canada's friendly countries America, Britain, Australia etc. can benefit here. A report quoting several educational consultants said that people have started looking for alternatives and if relations do not normalize soon, Indian students will start choosing options like America, Britain, Australia instead of Canada.