I am sorry; I wasn't clear whether you wanted a presentation from me to begin with or not. I was rather expecting questions first.
But what I have to say, really, is as follows. It's pretty obvious that there should be terrific benefits to both Canada and India from increased trade. The level of trade between two such very big economies is very small at the moment and has been historically. The extent of Canadian investment in India is very small. Indian investment in Canada is a bit more significant and has been increasing. I think we start from the basic position that there must be tremendous benefits from increasing trade connections.
I think it's important to remember that, though the Indian economy is big, the Indian economy historically has not been really a major trading economy. Although India's share of trade and the share of trade in the Indian economy has increased very considerably over the last decade, the country is still rather feeling its way in trade negotiations.
One of the problems that must be faced in these talks is that the bureaucratic capacity in India for conducting trade negotiations is pretty limited. My colleagues talk to me of India turning up at major trade talks with three people, when the Chinese, for instance, come along with 50 people. There are limitations of bureaucratic capacity, and at the moment I think India's priorities are to conclude trading agreements with Southeast Asia and to get through the long-running trade talks with the European Community.
In this context, what are Canada's biggest chips? What is it that we really have most to offer?
It seems to me—and this is what I'm hearing from colleagues and friends in Delhi—that what would really make a big difference, because India has such strong interests in diversifying sources of oil and gas, is if Canada can use our oil and gas resources to help the Indians to diversify their oil and gas sources. The fact that India has had important connections with Iran in regard to supplies of oil and gas is a part of that picture at the moment, of course, given the American concern with limiting contact with companies in countries that have those kind of trading connections with Iran.
It seems to me that is the biggest sort of chip that Canada has to put on the table.
Where are there strong mutual interests? It seems to me they are in the area of energy. There are mutual interests in building trade in agriculture. There are important opportunities, perhaps, for Canadian companies in regard to infrastructure. I'm really not sure about our capacities in this regard, but I know there are tremendous needs in India in regard to power transmission and distribution.
The big problems of the electricity sector in India are not to do with power generation so much as with transmission and distribution.
There are mutual interests in education.
An area like financial services is probably a bit problematic. I think there are opportunities in financial services—and India certainly respects the quality of the Canadian banking sector—but of course this is an important area in which non-tariff barriers will come into play. Canada will have to confront problems relating to domestic regulation of financial services in India.
From the Indian side, there will also be, I think, a very strong interest in the movement of people, the movement of professionals, access for Indian professionals into Canada.
There are opportunities, perhaps, for Canada in some areas of retail, given the commitment of the government to opening up the retail sector. A friend, a former finance secretary of the Government of India, said to me yesterday, “If only Canada could come up with a kind of an IKEA, you know, use some of that timber to provide good furniture and materials for construction”. Given the tremendous boom, of course, in construction in India, there could be a deal, perhaps, with a major real estate company in India.
I think that, in general, it's probably going to be non-tariff barriers rather than tariff barriers that are going to be the sticky areas.
Lastly, what I might say by way of introduction—Mr. Cardegna included in an e-mail to me the possibility of a question about India's business environment—I'm sure that I don't need to tell the members of the committee that India, of course, ranks pretty low on the World Bank's index of the ease of doing business, and very low, indeed, in the area of contract enforcement. Those are facts that are probably pretty well known.
What I think also needs to be recognized is what the same friend I was talking to yesterday, the former finance secretary, describes as the stranglehold that is exercised by a small number of very big companies in India, companies like Reliance, SR, indeed Tata, as very powerful companies that actually do exercise a great deal of influence on the actions of government as importantly as on policy. The advice that my friend was suggesting to me yesterday was that it would be important to avoid areas where powerful vested interests are involved, to avoid areas such as telecom and pharmaceuticals, where the big boys have very strong interests.
The last point, and it really follows from that one, is with specific regard to SMEs, small and medium-sized enterprises. As I understand from what I have read, the Canada-India Business Council, which represents quite a lot of small and medium-sized enterprises, is looking for very significant opportunities through a comprehensive economic partnership agreement.
I think this is a somewhat contradictory kind of situation, if you will, because following from what I said about the importance of recognizing what was described to me as the stranglehold exercised by a small number of very big companies, that means there may well be significant opportunities for small and medium-sized enterprises that are operating in sectors of the economy, areas of the economy, in which the big boys in India don't have very powerful interests.
But as it seems to me, small and medium-sized enterprises in the two countries—last point and I really will shut up then, okay?