‘Friction in bilateral relations won’t affect investment flows’

livemint.com:

NEW DELHI : The diplomatic row over the killing of a Sikh leader in British Columbia will not affect the flow of Canadian investments into India, a senior finance ministry official said on Tuesday. “Firstly, Western nations have invested in markets they have found promising irrespective of political or diplomatic differences. One example is China.

Secondly, Canada’s pension fund and other investments into India are small and are not critical to the Indian economy," said the official, who spoke on condition of anonymity. Experts also endorsed the government’s view, while some highlighted the absence of a trade deal between the two nations as a factor that could pose unpredictability for businesses. “The India-Canada relationship is based on mutual benefits, complementarity in trade and deep people-to-people connect; hence, it will not be impacted by the current diplomatic impasse," said Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), a think tank and consulting firm.

“Both India and Canada trade in complementary products and do not compete on similar products. Hence, the trade relationship will continue to grow and not be affected by day-to-day events," he added. Srivastava pointed out that two major investment sources from Canada—pension funds and remittances from people of Indian origin—will continue to flow, as the funds typically invest for the long term based on the intrinsic economic strength of the country, and Indians abroad will continue to send money back home.