Canada and India resume trade talks, aiming to double bilateral trade by 2030

Talks between Canada and India on a new trade agreement have been restarted, the Indian government announced on Sunday, after negotiations had been paused following a diplomatic spat two years ago.

A bilateral discussion between Canadian Prime Minister Mark Carney and Indian Prime Minister Narendra Modi was held on the sidelines of the G20 summit in Johannesburg.

It was stated by India’s Prime Minister’s Office that a decision had been reached to begin negotiations on a high-ambition Comprehensive Economic Partnership Agreement (CEPA), which is aimed at doubling bilateral trade to USD 50 billion by 2030.

Prime Minister Carney posted on X that a trade deal had been launched which could increase trade to more than C$70 billion. He noted that India, being the world’s fifth-largest economy, presented significant opportunities for Canadian workers and businesses.

The longstanding civil nuclear cooperation between the two countries was reaffirmed, and it was noted that discussions on expanding collaboration including long-term uranium supply arrangements are ongoing.

The restart of negotiations has been seen as a signal of thawing relations between the two countries, while Canada’s efforts to expand trade beyond its largest trading partner, the United States, have been highlighted. Carney has pledged that Canada’s non-U.S. exports will be doubled over the next decade.

Discussions on a comprehensive trade agreement between India and Canada have been ongoing for over two decades. Early negotiations in the 2000s and 2010s focused on a Broad-based Economic Cooperation Agreement and a CEPA covering goods, services, and investment, but no deal was finalized.

In 2014–2019, talks were rebranded as “high-ambition” CEPA discussions. Negotiations were paused in 2023 following a diplomatic dispute when Ottawa accused India of involvement in the killing of a Canadian Sikh separatist, which New Delhi denied. Despite these interruptions, trade has continued to grow modestly.

In 2024, two-way trade in goods and services was recorded at approximately C$31 billion ($21.98 billion), largely in Canada’s favor due to C$16 billion in services exports. By comparison, Canada’s total trade with China was almost four times larger.

Improvement in relations was observed following Modi’s meeting with Carney on the sidelines of the G7 summit in June. Carney described India as a reliable trading partner, while acknowledging the potential for friction.

It was emphasized by Carney that a strong commercial relationship exists and that efforts would be made to scale it up. A potential trade agreement is expected to provide protections for businesses in both countries, a clear set of rules, and dispute mechanisms, while building on mutual opportunities.

Additionally, Carney met with Brazilian President Luiz Inácio Lula da Silva at the G20 summit, and agreements were reached to intensify negotiations on a Canada-Mercosur free trade agreement. Mercosur includes Brazil, Argentina, Paraguay, and Uruguay.

Exchange Rate Reference: $1 = 1.4101 Canadian dollars.