What Happened
- India and Canada formally relaunched negotiations for a Comprehensive Economic Partnership Agreement (CEPA) on March 2, 2026, with Commerce and Industry Minister Piyush Goyal and Canada's Minister of International Trade Maninder Sidhu signing the Terms of Reference (ToR) in the presence of PMs Modi and Carney.
- The negotiations had been suspended in September 2023 following the diplomatic rupture over the killing of Khalistani separatist Hardeep Singh Nijjar in Surrey, British Columbia.
- The two sides set a target to conclude the CEPA by end of 2026, with a bilateral trade goal of $50 billion by 2030 — up from the current ~$8.66 billion.
- The CEPA negotiations, originally launched in November 2010, had seen 16 rounds without conclusion before suspension; the relaunch is expected to accelerate with an Early Progress Trade Agreement (EPTA) or interim arrangement as a stepping stone.
- PM Carney described India as Canada's "most important" emerging market relationship and said Canada aims to sign a trade deal with India within the year.
Static Topic Bridges
Comprehensive Economic Partnership Agreement (CEPA): Definition and Significance
A Comprehensive Economic Partnership Agreement (CEPA) is broader and more ambitious than a traditional Free Trade Agreement (FTA). While an FTA focuses primarily on reducing tariffs on goods, a CEPA covers goods, services, investments, intellectual property rights (IPR), government procurement, competition policy, and trade facilitation. India has signed CEPAs with the UAE (effective May 2022) and South Korea (effective January 2010), and a CEPA with the UK is also under negotiation. The India-UAE CEPA — the fastest negotiated (completed in 88 days) — is often cited as a template for expedited CEPA finalization.
- FTA focuses on: goods (tariff reductions) only
- CEPA covers: goods + services + investment + IPR + government procurement + competition
- India's signed CEPAs: UAE (in force May 2022), South Korea (in force January 2010), Japan (in force August 2011)
- India-Canada CEPA: first negotiations launched November 2010; 16 rounds completed before 2023 suspension
- Terms of Reference (ToR): technical document defining the scope, structure, and objectives of CEPA negotiations — a prerequisite for formal talks
- Nodal ministry: Ministry of Commerce and Industry (Department of Commerce)
Connection to this news: The signing of ToR for India-Canada CEPA is the formal relaunch mechanism — it sets the negotiating framework that will govern all subsequent rounds of talks.
India-Canada Trade: Structure and Potential
India-Canada bilateral trade stood at approximately $8.66 billion in FY 2024-25, making Canada a mid-tier trade partner for India. India's major exports to Canada include pharmaceuticals, iron and steel, seafood, cotton garments, electronic goods, and chemicals. India's major imports from Canada include pulses, pearls and semi-precious stones, coal, fertilisers, paper, and petroleum. Canada is also among the top sources of Foreign Direct Investment (FDI) into India, particularly through the Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers' Pension Plan, which have made substantial investments in Indian infrastructure and real estate.
- India-Canada bilateral trade (FY 2024-25): ~$8.66 billion
- India's exports to Canada: ~$4.22 billion
- India's imports from Canada: ~$4.44 billion
- CEPA target: $50 billion by 2030 (more than 5x increase in ~5 years)
- Key Canadian exports to India: pulses (Canada is among the world's largest pulse exporters), fertilisers (potash), critical minerals
- Key Indian exports to Canada: pharmaceuticals, engineering goods, textiles
- Canadian pension funds (CPPIB, Ontario Teachers') are major FDI sources into India
Connection to this news: The CEPA is expected to significantly expand market access in both directions — particularly for Indian pharma, IT services, and skilled workers into Canada, and Canadian pulses, fertilisers, and critical minerals into India.
India's Approach to Trade Agreements: Policy Principles
India's trade agreement strategy has evolved considerably. After signing numerous FTAs/CEPAs in the 2000s-2010s, India withdrew from the Regional Comprehensive Economic Partnership (RCEP) in November 2019, citing concerns about import surges (particularly from China), trade deficits, and inadequate market access offers from partner countries. Post-RCEP, India has adopted a more selective, value-driven approach — seeking reciprocal market access in services (where India has a comparative advantage) alongside goods, and pushing for stronger rules-of-origin provisions to prevent trade deflection.
- RCEP withdrawal: November 4, 2019 — India cited: trade deficit risks, inadequate safeguards, services access concerns
- India's active FTA negotiations (as of 2026): Canada (CEPA), UK (CEPA, under advanced negotiation), EU (FTA restarted 2022), Oman (FTA), Peru
- Recently concluded: UAE CEPA (May 2022), Australia ECTA (interim, December 2022)
- Rules of origin: Provisions in trade agreements specifying minimum domestic value addition required for a product to qualify for preferential tariff treatment — key India concern in FTA negotiations
- India's FTA review mandate (2020): Commerce Ministry commissioned review of existing FTAs after studies showed trade deficits widened post-FTA
Connection to this news: The India-Canada CEPA relaunch fits India's post-RCEP strategy of selective, comprehensive agreements with advanced economies that offer services market access, skilled migration pathways, and supply chain complementarities.
Key Facts & Data
- India-Canada CEPA first launched: November 2010
- Rounds of negotiations before suspension: 16
- Trade suspended/FTA talks suspended: September 2023 (Nijjar diplomatic crisis)
- CEPA Terms of Reference signed: March 2, 2026 (by Commerce Ministers Goyal and Sidhu)
- Target to conclude CEPA: End of 2026
- Current bilateral trade: ~$8.66 billion (FY 2024-25)
- Trade target by 2030: $50 billion
- Canada's Indian diaspora: approximately 1.8 million people of Indian origin (one of the largest Indian diasporas globally)
- India-UAE CEPA (fastest negotiated): 88 days, in force May 2022
- India's RCEP withdrawal: November 4, 2019