What Happened
- Canada and India are actively negotiating a Comprehensive Economic Partnership Agreement (CEPA), with the formal objective of doubling bilateral trade to USD 50 billion by 2030.
- Canadian Prime Minister Mark Carney visited India from February 27 to March 2, 2026, marking a significant diplomatic reset after nearly two years of severely strained relations following the diplomatic row over the alleged killing of Khalistani separatist Hardeep Singh Nijjar in Canada in 2023.
- CEPA negotiations were formally launched following an agreement between PM Carney and PM Modi in November 2025; Global Affairs Canada conducted public consultations from December 13, 2025 to January 27, 2026.
- Key CEPA focus areas include energy (Canada as a supplier of critical minerals, LNG, and uranium), digital services, infrastructure, healthcare, agriculture, and skilled labour mobility.
- Canadian investors have already invested over USD 100 billion in Indian airports, logistics, and urban infrastructure (largely through Canadian pension funds — CPPIB, CDPQ, Ontario Teachers').
- Bilateral trade in goods and services between India and Canada stood at approximately CAD 30.9 billion in 2024 (India's seventh-largest trading partner in goods and services). The CEPA target of USD 50 billion would roughly double this.
Static Topic Bridges
Comprehensive Economic Partnership Agreement (CEPA) — What It Covers and India's Track Record
A Comprehensive Economic Partnership Agreement (CEPA) is a type of Free Trade Agreement (FTA) that covers not just tariffs on goods but also services, investment, intellectual property, government procurement, and regulatory cooperation — effectively a broader, deeper integration framework than a simple goods FTA.
- India's existing CEPAs: India-Japan CEPA (August 2011), India-South Korea CEPA (January 2010), India-UAE CEPA (May 2022 — India's fastest-negotiated CEPA, completed in 88 days), India-Australia ECTA (Interim FTA, April 2022, with final CEPA negotiations ongoing).
- India-UAE CEPA is the benchmark: It was the first to include a services chapter comparable to a CEPA, with market access commitments for professional services including temporary movement of Indian IT professionals.
- CEPA vs FTA vs PTA: Preferential Trade Agreement (PTA) = partial tariff concessions; Free Trade Agreement (FTA) = comprehensive tariff elimination on goods; CEPA = FTA plus services, investment, and other behind-the-border measures.
- Canada's CETA (Comprehensive Economic and Trade Agreement with EU, 2017) is an example of what a Canada-India CEPA aspires to — covering 98% of tariff lines, services access, and regulatory cooperation.
- India's standard "sensitive list" in trade negotiations: dairy, wines and spirits, some agricultural commodities — likely to feature in Canada-India CEPA as well given Canada's agricultural export interests.
Connection to this news: The Canada-India CEPA is positioned as a high-ambition agreement — not just a tariff deal but a framework for deeper economic integration. Given Canada's strengths in critical minerals, energy, and services, the CEPA's services and investment chapters are likely to be as significant as the goods tariff schedule.
India-Canada Diplomatic Relations — From Estrangement to Reset
India-Canada bilateral relations deteriorated sharply following the June 2023 killing of Hardeep Singh Nijjar (a Khalistani separatist designated as a terrorist by India) in Surrey, British Columbia. Canadian PM Justin Trudeau publicly alleged Indian government involvement in September 2023, triggering a diplomatic crisis: both countries expelled senior diplomats, and Canada suspended CEPA negotiations (which had been underway since 2010 with multiple suspension-and-restart cycles).
- India-Canada CEPA negotiations first launched: 2010; stalled multiple times over issues including market access for agricultural goods, Mode 4 services (movement of persons), and IP protections.
- Nijjar incident (June 18, 2023): Killing of Hardeep Singh Nijjar in Surrey, BC; Trudeau's September 2023 parliamentary statement alleging Indian government involvement.
- Diplomatic fallout: India expelled a senior Canadian diplomat; Canada withdrew its High Commissioner and suspended trade negotiations.
- Leadership change: Mark Carney replaced Justin Trudeau as Liberal PM in early 2025 — a change that created space for diplomatic reset, given Carney's focus on economic pragmatism over confrontational diplomacy.
- November 2025 Carney-Modi agreement: Formally relaunched CEPA negotiations, signalling a functional if still cautious reset of bilateral ties.
- The Sikh diaspora dimension: Canada has one of the world's largest Sikh diaspora communities (approximately 770,000–800,000 Sikhs, concentrated in Ontario and British Columbia) — a politically significant constituency for Canadian politics with overlapping ties to Indian Punjab.
Connection to this news: The CEPA negotiation's resumption is inseparable from the diplomatic reset — it represents the two governments prioritising economic interests over the unresolved diplomatic row. The economic logic (Canadian pensions seeking Indian infrastructure yields; India seeking Canadian critical minerals and energy) is providing the practical impetus for normalisation.
Canada as a Critical Minerals and Energy Partner for India
Canada's relevance to India extends beyond trade in conventional goods — it is a major source of uranium (for India's nuclear power programme), a potential LNG supplier, and a critical minerals-rich country. India's energy and industrial transitions require large quantities of lithium, cobalt, nickel, and rare earth elements — materials in which Canada holds significant reserves.
- Canada is the world's second-largest uranium producer (approximately 22% of global production in 2023), with mines in Saskatchewan (Athabasca Basin). India is pursuing nuclear energy expansion under its three-stage nuclear power programme.
- India-Canada Civil Nuclear Cooperation Agreement: India and Canada signed a civil nuclear agreement in 2010, following India's entry into the NSG (Nuclear Suppliers Group, 2008). Canada had cut off nuclear cooperation with India after India's 1974 nuclear test (the CIRUS reactor used Canadian technology).
- Critical Minerals: Canada's "Critical Minerals Strategy" (2022) identifies 31 critical minerals; India's "National Critical Minerals Mission" (2025) targets domestic production and international partnerships for lithium, cobalt, nickel, graphite, titanium, and REEs.
- Canadian pension funds in India: CPPIB (Canada Pension Plan Investment Board), CDPQ (Caisse de dépôt et placement du Québec), and Ontario Teachers' Pension Plan collectively have invested over USD 40–50 billion in Indian infrastructure (roads, airports, utilities, renewable energy, digital infrastructure).
- LNG potential: Canada is developing LNG Canada (first phase: 14 million tonnes/year, operational 2025) on the BC coast — as a potential supplier to India for natural gas diversification.
Connection to this news: Canada offers India a combination that few partners can match — uranium for nuclear power, critical minerals for the green transition, LNG for gas security, and patient capital from pension funds for infrastructure. The CEPA creates the framework for unlocking all of these simultaneously.
Key Facts & Data
- India-Canada CEPA target: USD 50 billion bilateral trade by 2030 (from current ~CAD 30.9 billion in 2024)
- Current India-Canada goods trade (2024): CAD 13.32 billion; services: CAD 19.6 billion; total: CAD 30.9 billion
- Canadian investors in Indian infrastructure: over USD 100 billion (CPPIB, CDPQ, Ontario Teachers')
- CEPA formal negotiations relaunched: November 2025 (Carney-Modi agreement)
- CEPA public consultations: December 13, 2025 – January 27, 2026
- PM Carney's India visit: February 27 – March 2, 2026
- India's existing CEPAs: Japan (2011), South Korea (2010), UAE (2022), Australia ECTA (interim, 2022)
- Canada's uranium production: ~22% of global output; Athabasca Basin, Saskatchewan
- India-Canada Civil Nuclear Agreement: 2010
- India's Sikh diaspora in Canada: ~770,000–800,000 (concentrated in Ontario and BC)
- CEPA formal negotiations originally launched: 2010 (multiple stalls and restarts)
- Hardeep Singh Nijjar killing: June 18, 2023 (Surrey, BC) — trigger for 2023 diplomatic crisis