7 Reasons Why Canada Imports from India: A Guide for Businesses
Canada and India have a long history of trade and cooperation, dating back to the colonial era. Today, the two countries are strategic partners in various fields, such as energy, education, innovation, and security. Canada is one of the largest investors in India, and India is one of the fastest-growing sources of imports for Canada.
But what exactly does Canada import from India, and why? In this article, we will explore the main products and services that Canada buys from India, and the benefits and challenges of doing business with this emerging market.
Pharmaceuticals are one of the top products that Canada imports from India. According to the United Nations COMTRADE database, Canada imported US$566.82 million worth of pharmaceutical products from India in 2022. This makes India the second-largest supplier of pharmaceuticals to Canada, after the United States.
India is known as the “pharmacy of the world” for its large and competitive generic drug industry. India produces about 20% of the global supply of generic drugs, and exports them to over 200 countries. India’s pharmaceutical sector is driven by low production costs, high-quality standards, and a strong research and development base.
Canada benefits from importing pharmaceuticals from India because it helps lower the cost of health care and increase access to essential medicines. Canada also collaborates with India on research and innovation in the health sector, such as vaccine development and biotechnology.
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2. Machinery and Equipment
Machinery and equipment are another major category of imports that Canada sources from India. In 2022, Canada imported US$495.56 million worth of machinery, nuclear reactors, boilers, and parts from India. This makes India the seventh-largest supplier of machinery and equipment to Canada, after China, the United States, Mexico, Germany, Japan, and Italy.
India has a diversified and advanced manufacturing sector that produces a wide range of machinery and equipment for various industries, such as agriculture, construction, mining, energy, transportation, and telecommunications. India’s manufacturing sector is supported by a large pool of skilled workers, engineers, and scientists, as well as favorable government policies and incentives.
Canada benefits from importing machinery and equipment from India because it helps enhance its productivity and competitiveness in various sectors. Canada also engages with India on trade and investment promotion, technology transfer, and joint ventures in the manufacturing sector.
3. Precious Metals and Stones
Precious metals and stones are another significant item that Canada imports from India. In 2022, Canada imported US$448.55 million worth of pearls, precious stones, metals, coins, and jewelry from India. This makes India the third-largest supplier of precious metals and stones to Canada, after China and Hong Kong.
India is one of the world’s leading producers and exporters of gems and jewelry. India has a rich tradition and expertise in cutting, polishing, designing, and crafting various types of precious metals and stones, such as diamonds, gold, silver, platinum, rubies, emeralds, sapphires, and pearls. India’s gems and jewelry sector is driven by high domestic demand, strong export performance, and supportive government policies.
Canada benefits from importing precious metals and stones from India because it helps meet its consumer demand for high-quality and affordable jewelry products. Canada also cooperates with India on enhancing transparency, accountability, and sustainability in the gems and jewelry sector.
4. Iron and Steel
Iron and steel are another important commodity that Canada imports from India. In 2022, Canada imported US$382.78 million worth of articles of iron or steel from India. This makes India the fifth-largest supplier of iron and steel to Canada, after China, the United States, Mexico, and South Korea.
India is one of the world’s largest producers and exporters of iron and steel. India has abundant reserves of iron ore, coal, and other minerals that are essential for steel production. India’s iron and steel sector is driven by strong domestic demand, especially from the infrastructure, construction, automotive, and defense industries. India’s iron and steel sector is also supported by favorable government policies and initiatives, such as Make in India, National Steel Policy, and Steel Scrap Policy.
Canada benefits from importing iron and steel from India because it helps diversify its sources of supply and reduce its dependence on other countries. Canada also collaborates with India on enhancing quality standards, environmental protection, and innovation in the iron and steel sector.
5. Mineral Fuels
Mineral fuels are another key product that Canada imports from India. In 2022, Canada imported US$336.95 million worth of mineral fuels, oils, distillation products, and related materials from India. This makes India the ninth-largest supplier of mineral fuels to Canada, after the United States, Algeria, Norway, Saudi Arabia, Nigeria, Kazakhstan, Azerbaijan, and Iraq.
India is one of the world’s largest consumers and importers of mineral fuels, especially crude oil and natural gas. India has a growing demand for energy to power its economic growth and development. India’s mineral fuel sector is driven by a diversified mix of sources, such as coal, oil, gas, hydro, nuclear, and renewable energy. India’s mineral fuel sector is also supported by various government policies and programs, such as the National Energy Policy, the Hydrocarbon Exploration and Licensing Policy, and the International Solar Alliance.
Canada benefits from importing mineral fuels from India because it helps increase its market access and export opportunities for its energy products. Canada also engages with India on enhancing energy security, efficiency, and sustainability in the mineral fuel sector.
6. Electrical and Electronic Equipment
Electrical and electronic equipment are another significant category of imports that Canada sources from India.
In 2022, Canada imported US$323.61 million worth of electrical and electronic equipment and parts from India. This makes India the eighth-largest supplier of electrical and electronic equipment to Canada, after China, the United States, Mexico, Germany, Japan, South Korea, and Taiwan.
India has a vibrant and dynamic electrical and electronic industry that produces a wide range of products and services for various sectors, such as telecommunications, information technology, consumer electronics, industrial automation, defense, aerospace, and health care. India’s electrical and electronic industry is driven by a large domestic market, high-quality standards, and a strong innovation ecosystem. India’s electrical and electronic industry is also supported by various government policies and schemes, such as Digital India, Electronics Manufacturing Clusters, and Production Linked Incentive.
Canada benefits from importing electrical and electronic equipment from India because it helps meet its consumer and industrial demand for high-tech and affordable products and services. Canada also partners with India on promoting trade and investment, technology cooperation, and skill development in the electrical and electronic industry.
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7. Organic Chemicals
Organic chemicals are another major product that Canada imports from India. In 2022, Canada imported US$319.92 million worth of organic chemicals from India. This makes India the fourth-largest supplier of organic chemicals to Canada, after the United States, China, and Germany.
India has a robust and diversified chemical industry that produces a wide range of organic chemicals for various applications, such as pharmaceuticals, agrochemicals, dyes, paints, plastics, rubber, textiles, leather, cosmetics, and perfumes. India’s chemical industry is driven by low production costs, high-quality standards, and a strong research and development base. India’s chemical industry is also supported by various government policies and initiatives, such as the Chemicals Promotion Development Scheme, the National Chemical Policy, and the Petroleum Chemicals and Petrochemical Investment Regions.
Canada benefits from importing organic chemicals from India because it helps lower its input costs and increase its value addition in various sectors. Canada also works with India on enhancing quality standards, environmental protection, and innovation in the chemical industry.
Canada imports a variety of products and services from India that help boost its economy and society. Canada also has a strategic partnership with India that fosters mutual cooperation and collaboration in various fields. By understanding the main reasons why Canada imports from India, businesses can identify the opportunities and challenges of doing trade with this emerging market.
Canada’s Trade with India: An Overview
Canada and India have a long-standing and mutually beneficial trade relationship. According to the United Nations COMTRADE database, Canada imported US$6.4 billion worth of goods from India in 2022, making India the 10th largest source of Canada’s imports. Canada exported US$733 million worth of goods to India in December 2022, resulting in a positive trade balance of C$51.5 million for that month. Between December 2021 and December 2022, Canada’s exports to India increased by 121%, while imports increased by 27.9%.
Canada’s Imports from India: Trends and Composition
Canada’s imports from India have grown steadily over the years, reflecting the diversification and sophistication of India’s economy. In 2022, Canada imported a variety of goods from India, ranging from pharmaceutical products, machinery, pearls and precious stones, to textiles, clothing, spices and cereals. The top five import categories were:
- Pharmaceutical products: US$566.82 million
- Machinery, nuclear reactors, boilers: US$495.56 million
- Pearls, precious stones, metals, coins: US$448.55 million
- Articles of iron or steel: US$382.78 million
- Mineral fuels, oils, distillation products: US$336.95 million
These five categories accounted for 40% of Canada’s total imports from India in 2022.
Canada’s Exports to India: Opportunities and Challenges
Canada’s exports to India have also increased over time, but at a slower pace than imports. Canada has a comparative advantage in exporting natural resources, agricultural products and services to India, but faces some barriers such as tariffs, non-tariff measures, regulatory uncertainty and intellectual property rights protection. The top five export categories in December 2022 were:
- Vegetable oils: C$165 million
- Wood pulp: C$83 million
- Fertilizers: C$76 million
- Ores and concentrates: C$66 million
- Aircraft and parts: C$54 million
These five categories accounted for 60% of Canada’s total exports to India in December 2022.
Canada and India have a dynamic and growing trade relationship that offers significant opportunities for both countries. However, there are also some challenges and areas for improvement that need to be addressed. A comprehensive free trade agreement between Canada and India could help boost bilateral trade and investment flows, create jobs and enhance economic cooperation.
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