India-Canada Bilateral relationship: Civil Nuclear ties, Energy Security, Investment

• India and Canada are aiming for closer partnerships in civil nuclear energy and hydrocarbons with the dissipation of distrust that kept them estranged for 40 years after India had conducted a nuclear test in 1974.
• In hydrocarbons tie-up, India will take first cargo of oil sourced from Canada’s east coast from the beginning of next year (January 2014). Indian refiners are interested in importing Alberta blended bitumen from its Saint John terminal. Canada’s ice-free marine terminal at Saint John would cater for Very Large Crude Carriers (VLCC), thus making transportation economical. (This would help Indian refiners as this product would be significant.)
• This relationship would be supplemented with a “collaborative approach” in the civil nuclear sector, decks for which have been cleared with the signing of a civil nuclear accord and finalising of administrative arrangements. (Canada’s ties in the nuclear sphere had begun in the mid-1950s and lasted till India’s first nuclear test in 1974.)
• India and Canada have just completed an energy dialogue which has been elevated from the bureaucratic to ministerial level.
• The idea of developing shale oil and gas, mainly by the U.S. and Canada, has galvanized the geopolitics of the energy market. Three scenarios might emerge. First, the lowered gas prices will force key producers to readjust production and they may consider forming a cartel; second, gas may begin to be independently priced; and third, this independent pricing would ultimately have an effect on oil prices.
• Also Canada is rich in Uranium, which would help India in its Energy security.
• Both Prime Ministers had set the bilateral trade target at $15 billion by the end of 2015 fiscal. It would be assisted by a Comprehensive Economic Partnership Agreement (CEPA) (currently the negotiations for CEPA is going on). And with regard to Investments – Canadian pension funds are looking at India’s infrastructure requirements. The Canada Pension Plan Investment Board (CPPIB) had already announced investment of $200 million.