11/08/2012 09:16 EST | Updated 01/08/2013 05:12 EST

Harper says Canada needs new markets beyond sluggish U.S.

Prime Minister Stephen Harper said today from India's bustling hi-tech centre of Bangalore that, re-election or not, U.S. President Barack Obama still faces an economy that will continue to grow slowly, meaning Canada must look to new markets.

"The reality is the United States, while it will remain our largest economic partner for the foreseeable future, it will likely continue to be a slow-growing economy," said Harper, who is on a trade mission in India. "[For Canada] to realize its full economic potential, it will have to diversify to countries like India that are growing and expected to grow much more rapidly."

"We can as a country continue to look at all these worrying developments around the world and fret," Harper said. "We're going to have a lot of these kinds of problems with us for a while."

"We have got to focus on the mid-term, and keep making the decisions and changes necessary in our own country so that we realize the opportunities to create jobs and growth regardless of what may happen in the U.S., Europe and other economies that have longer-term problems," the prime minister said.

Referring to the looming fiscal crisis in the U.S. – the so-called fiscal cliff – Harper added that "the world would be immensely helped if the U.S. could deal with this immediate issue and if the Europeans could accelerate progress on their debt issues."

Harper also said that Canada is watching "with great interest" as the Keystone XL pipeline proposal continues through the American regulatory process, noting that the project enjoys the support of not only his government but also business and labour in the United States.

On Thursday evening in Bangalore, Harper telephoned Obama to wish him well on his second term in office. The two leaders spoke for about ten minutes.

A readout provided by the prime minister's office says that Harper "used the opportunity to convey to [Obama] the importance of the White House and Congress working together to tackle the U.S. fiscal situation."

New consulate in Bangalore

As part of his government's enhanced focus on India, Harper announced Thursday that the current trade office in Bangalore will become a full consulate next summer, to serve the fast-growing city and beef up Canada's representation in the southern part of the country.

In addition to the high commission in New Delhi, Canada has three other consulates as well as three trade offices in India. Between 25 and 30 staff will be relocated from New Delhi and Chennai to Bangalore, a government press release said.

The enhanced services at the new consulate are meant to help attract international students and capitalize on Bangalore's trade potential, particularly in information technology and biotechnology. The city is the fourth-largest technology cluster in the world, after California's Silicon Valley, Boston and London.

During his news conference with reporters, Harper repeated his complaint that trade talks with India are moving too slowly.

"Are we frustrated? I think I've been very clear that I think we need to go farther and faster," he said.

But Harper praised his hosts for their recent emphasis on developing a closer bilateral relationship with Canada and the progress that has been made since the Indian government made it more of a priority.

Unlike other countries Canada is dealing with in the developing world, Harper said, "this country is a democracy. And that means the government cannot dictate a whole set of policy changes to have them the next day."

As for India's repeated complaints about Sikh extremism in Canada, Harper said his government supports a united India but could not violate free speech.

"The vast majority of Canadians, and I think the vast majority of Indo-Canadians, have no desire to see the revival of old hostilities in this great country here in India." However, he said, "we can't interfere with the right of political freedom of expression."

Praise for city's potential

Harper said he was deeply impressed what he was seeing on his tour, particularly the "energy" Bangalore exudes.

"It's a feeling I recognize. My own city of Calgary has it," Harper said. "It's the sense that anything is possible. That all around you, you are building the future."

Cameras followed Harper and his wife Thursday to a movie showing filled with Indian schoolchildren at the opening of the city's new IMAX theatre, which uses Canadian film technology.

The couple also toured the city's Sri Someshwara Swamy Temple.

Harper also met with Hans Raj Bhardwaj, the state governor of Karnataka, at his official residence.

Thursday's itinerary also included a business roundtable, his second on this trip.

The prime minister's visit concludes in Bangalore on Friday. In the evening, he'll fly to Manila for a one-day visit on Saturday. He's scheduled to mark Remembrance Day with a ceremony in Hong Kong on Sunday before heading home.