Tariff Trouble? An Indian business organization in Canada sees a trade win

By Gautam Viswanathan, Deputy Editor, The Inspired Indian

An Indian business organization in Canada is calling for both countries to work together to overcome the impact of tariffs imposed by the United States, helping each other to build a more resilient economic future.

In a recent interview with 680 News Radio, Prashant Srivastava, vice president of the Indo-Canada Chamber of Commerce (ICCC), emphasizing the potential for a strategic pivot toward a robust bilateral trade relationship.

“Canada provides a very sound base for Indian businesses,” he said, when asked whether both countries working together would at least partially overcome the impact of tariffs. “That means there are tremendous opportunities for Indian businesses like we see especially in the IT sector, in the finance sector, these growth opportunities.”

High demand for Canadian products

India’s growing middle class creates a huge market for Canadian agricultural and consumer goods. At the same time, Canada can benefit from India’s strong pharmaceutical and IT sectors.

“There’s also an opportunity to go in the direction of Canada to India for Canadian producers whose products are hit with US tariffs,” added Srivastava.

“If you see the leadership in India, there is political stability, there is a clear policy direction,” he added. “The GDP growth has also consistently increased.”

“This is a very right time, and an opportunity for Canadian businesses, to have scalability with the India market, because India has the largest middle class market in the world,” he explained. “There is a huge appetite for Canadian products… Canada is already an established brand in India.”

Tariffs on Canada: A strain on a close relationship

The US has recently imposed several rounds of tariffs on Canadian goods, with Canada responding in kind. This has created a trade dispute between the two neighbour. US tariffs are targeted at specific sectors and products such as:

• Steel and aluminum: The U.S. has imposed tariffs on these products, citing national security concerns.
• Auto Parts and vehicles: Tariffs have been considered or imposed on the automotive industry, which is highly integrated between the two countries.
• Softwood lumber: This has been a long-running trade dispute between the U.S. and Canada, with the U.S. periodically imposing duties on Canadian lumber imports.
• Other goods: The tariffs have also hit a variety of other products, from copper to certain consumer goods.

These tit-for-tat tariffs have raised costs for consumers and businesses in both countries, disrupted supply chains, and created economic uncertainty. While a significant portion of trade between the two nations remains tariff-free under the Canada-United States-Mexico Agreement (CUSMA), the targeted tariffs have had a notable impact on specific industries.

Tariffs on India: A diplomatic and economic challenge

The main justifications for the tariffs on India are India’s continued purchase of Russian oil and arms, and its high tariffs and non-tariff trade barriers on U.S. goods. The U.S. has used the tariffs as a pressure tactic to influence India’s foreign policy and trade practices.

Tariff Structure: The tariffs have been implemented in a two-part structure: a base tariff of 25%  on a broad range of Indian goods, and an additional 25% tariff, imposed specifically in response to India’s crude oil trade with Russia, bringing the total tariff on many Indian products to 50%.