SPEECH DELIVERED BY HERBERT BROWNSTEIN BEFORE GUJARAT CHAMBER OF COMMERCE & INDUSTRIES
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Mr. President, honoured members:
It is a great pleasure and honour once again to be invited by the Gujarat Chamber of Commerce and Industries to discuss the subject of Canada-India-Trade after a period of 18 months and particularly since our Prime Minister's visit to your country in January, 1996 which has seen an increase in trade between our respective countries.
You may remember that when I last addressed your Chamber in March, 1995 together with my associate, Mr. Prashant Ajmera, we discussed in much detail the business facts and figures on Canada. As this information was already provided to you during the course of our last seminar, I do not want to burden you by repeating the same facts and figures. Instead we have made this information readily available to you in printed form for the benefit of all Indian businessmen wishing to do business with Canada. During our last seminar, I indicated that according to the United Nations standing in 1993 Canada enjoyed the reputation of being declared as the best country in the world in which to live. As a Canadian, I am proud to state that we have maintained our position as number one for the years 1994 and 1995.
Of the various Canadian trade delegations and government delegations that visited India during the past 18 months, clearly the most important and biggest delegation was the Team Canada Trade Mission headed by our Prime Minister Jean Chrétien in January, 1996.
It was an honour for our firm to be invited and to participate in this trade mission and I myself and Mr. Prashant Ajmera represented our firm before the Confederation of Indian Industry (CII) in Mumbai and before the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi.
The Team Canada Trade Mission was two tier comprised of both a Government and Business delegation. The Government delegation led by our Prime Minister included several Central Government Cabinet Ministers, including most notably our International Trade Minister, Roy MacLaren who has visited India on 21 occasions, our Secretary of State for Asia-Pacific, Mr. Raymond Chan, our Ambassador to India, Mr. Stanley Gooch, seven of our Provincial Premiers (Chief Ministers) and a number of local government officials.
The business delegation consisted of over 250 business leaders, representing 230 companies. This Team was the biggest ever foreign trade Mission from Canada to visit India.
The 4-day business program in India included the participation of the team in the "Partnership Summit 1996" in Mumbai, a special event organized by the Confederation of Indian Industry (CII), marking the CII centenary and a special session of the Canada-India Joint Business Council (JBC) in New Delhi, jointly hosted by the JBC partners, the Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM) and the Canada-India Business Council (CIBC).
The program included plenary sessions in Mumbai and New Delhi, which were addressed by our Prime Minister Mr. Jean Chrétien.
I am pleased to report that there were official signings both in Mumbai and New Delhi of a total of 75 business deals worth $3.9 billion. The deals included $921 million in commercial contracts and $2.47 billion in agreements including memoranda of understanding and letters of intent. This is a tremendous success considering that in previous years two way trade between Canada and India only amounted to a total of $600 million.
Following discussions between the Indian and Canadian Prime Ministers and the Team Canada Government delegation, several Canada-India bilateral were signed agreements described as part of major efforts to raise relations between our two countries to a new level of relevance and importance.
These included a revised agreement for the avoidance of double taxation, reflecting more accurately the current tax policies of the two countries. It is aimed at improving the climate for investment and the conduct of business, and will replace the existing one concluded in 1985. This is tremendously encouraging as it is to the benefit of Canadian and Indian businessmen wishing to enter into trading partnerships.
Prime Minister Chrétien also announced the appointment of an Honourary Consul in Madras, the immediate opening of a trade office in Bangalore and our government's intention to appoint an honourary Consul in Calcutta. It was also announced that Canada would open a Canadian Education Centre in India in 1997 to promote Canadian educational services.
Mr. Chrétien, in his address both at the CII "Partnership Summit 1996" in Mumbai, in which 1500 Indian and foreign business leaders attended, and at the special session of the Canada-India Joint Business Council in New Delhi, stressed the importance and significance of Team Canada's visit to India. He declared as follows:
"Canada is ready to build a stronger, more vital link with India. That is the reason for this Team Canada Mission to this country; In Canada, it is not on every issue that the Prime Minister and provincial premiers (Chief Ministers) agree; so the fact we are all here as one team says something about the importance we place on renewing the relationship between our nations."
The Prime Minister also referred to a new Focus India strategy which has been adopted in Canada. The focus India strategy was recently developed by our government in response to Canadian companies need to look for new markets, using new strategies that go beyond exporting and include investment, joint venture, and technology transfers. The Canadian Government and the private sector have cooperated on the Focus India strategy that would make it possible to coordinate the efforts of the federal and provincial governments (our central and state governments) and of the private sector, in order to take advantage of new economic opportunities.
Our Prime Minister, while supporting the reform process in India, described it as a bold step taken by the Indian Government and said that Canadians were excited about the new policies and that it was these reforms, to a large degree, that have served as the catalyst for the increased economic and commercial cooperation between the two countries.
The Prime Minister also referred to the sharp increase in the two-way trade, Canadian direct investment in recent months, and the large number of business deals signed by Team Canada, and said that these developments have demonstrated that the two countries could and should double the two-way trade over the next two years and quadruple over the next five years, and challenged business leaders to work to achieve these goals.
The Team Canada Trade Mission program included plenary sessions in Mumbai and New Delhi, which were addressed by Prime Minister Chrétien. Other events included several sector specific seminars, as the trade delegation was divided into the following sectors:
- 1> Financial: represented by Canada's major banks such as the Bank of Nova Scotia, Bank of Montreal and Toronto Dominion Bank;
- 2> Telecommunications: represented by such companies as Northern Telecom, Bell Telephone;
- 3> Power Corporations: represented by such companies as B.C. Hydro, Ontario Hydro, and SNC-Lavalin Inc.;
- 4> Food: represented by such companies as Met-Chem Canada Inc. and Micro-Chem Laboratories Inc.;
- 5> Transportation: represented by such companies as Canadian Airlines and Air Club;
- 6> Education: represented by 13 major Canadian Universities and Colleges;
The program included luncheon meetings with guest speakers and one-on-one business meetings allowing Canadians to interact with hundreds of Indian business leaders and top government officials resulting in the conclusion of major agreements and/or memorandums of agreement.
Canadian studies and surveys show that there are other sectors other than those covered by the trip in January, 1996 in which Indian requirements could be met by Canadian companies on a competitive basis such as environment, mining, pulp and paper industry, high tech computer technology, textile manufacturing and many other sectors where Indian companies are currently receiving technical know-how from other European and Western countries. Canada could provide this technical know-how at a more competitive price.
The Canadian Business delegation focused mainly on large Canadian corporations. However, upon our review of Canadian studies and surveys, we discovered there to be many small and medium size companies in Canada which have the technology and know-how needed in India and most certainly tieups can be made, among those Indian companies similar in size and nature. Unfortunately, we have found from our visits to India that many small and medium size companies in India are under the mistaken impression that the costs, complexities and time required do not justify the extra effort needed to explore the Canadian market. In their experience, it is so easier to do business next door and consequently, they do not try very hard to succeed in Canada and do not devote the resources required.
My Recommendations:
Indian businessmen should be encouraged to go out of their way to show Canadians, in detail, with facts and figures how and why cooperation is in their mutual interest, without taking it for granted that all Canadians know what may seem obvious to experienced Indian businessmen. One should not assume, even today, that all Canadians are fully informed on the current Indian environment. Since a number of bad experiences in the past, with bureaucracy, customs, the Reserve Bank of India, tender procedures lacking transparency, etc., continue to colour the thinking of Canadian businessmen.
The technology that Canadians have to offer and the integrity and capability of Canadians as long-term business partners will make the additional effort more than worthwhile. It would also be beneficial for Indian companies to adopt Western marketing techniques in their dealings with Canadians and other Western companies to more beneficially demonstrate their capabilities and, in particular, their serious intentions in doing business.
Having visited India on 5 occasions, I have also realized, as a problem, the difference in levels of persistence and patience which exists in doing business between our respective countries.
You must realize that in Canada, joint ventures and business deals are rapidly implemented and Canadians are not used to the relatively slow process of establishing an operation business in India and some become disillusioned by lengthy delays. There is much misunderstanding which could be eliminated if the Indian partners make clear from the beginning what is involved since Canadians are not always aware of problems and procedures which in India are taken for granted.
In fact, Canadian companies on our trade mission to India were encouraged to learn to adapt to the Indian pace of business and even more importantly, accept a long term commitment and strategy appropriate with persistence and patience as an essential ingredient with doing business in India.
Recently a meeting took place at our office in Montreal with Mr. Navin Parekh, the Chairman of the India desk for the Conference Board of Canada. This Government sponsored organization has been created to enlighten Canadian businessmen on doing business in foreign markets.
Many Canadian companies have participated in the program and have found it highly useful in adapting their business practices to the Indian market.
Following the success of the Team Canada Business delegation of January, 1996, the Department of Foreign Affairs and International Trade of Canada has decided to sponsor and promote in selected cities in India an Encon Environmental Trade Fair in February, 1997. Technical seminars are now being planned to promote company products and technologies in India.
In conclusion, the opportunities for Canada-India Trade are enormous so long as both parties work in a spirit of cooperation, understanding and one following a program of orientation.
HERBERT M. BROWNSTEIN
November, 1996
