Visiting Canada next month to speed up FTA negotiations: Piyush Goyal

India's Commerce Minister is set to travel to Canada to accelerate negotiations for a Comprehensive Economic Partnership Agreement (CEPA), following the sign...

What Happened

India's Commerce Minister is set to travel to Canada to accelerate negotiations for a Comprehensive Economic Partnership Agreement (CEPA), following the signing of the Terms of Reference (ToR) for the agreement in March 2026, when both countries formally launched CEPA talks in New Delhi.
The target is to finalise the agreement by end-2026, with bilateral trade targeted to reach USD 50 billion by 2030 — compared to the current level of USD 8.66 billion in FY 2024–25.
Separately, India is also conducting FTA discussions with Chile and Peru, reflecting a broader strategy of expanding trade partnerships across Latin America.

Static Topic Bridges

Comprehensive Economic Partnership Agreements (CEPAs) vs. Traditional FTAs

A Free Trade Agreement (FTA) conventionally focuses on reducing or eliminating tariffs and quotas on goods traded between two countries. A Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA) is a more ambitious instrument: it covers not just goods but also services, investment, intellectual property, competition policy, government procurement, dispute settlement, and other trade-related policy areas. CEPAs represent a "WTO-plus" undertaking — going beyond obligations under the World Trade Organization.

India has signed bilateral trade deals in the form of CEPAs, CECAs, FTAs, and Preferential Trade Agreements (PTAs) with 18 groups or countries, including ASEAN, Japan, South Korea, UAE (CEPA 2022), and Australia (ECTA 2022).
The India-UAE CEPA, signed in February 2022 and implemented from May 2022, is India's most recently concluded bilateral CEPA; it was negotiated in under 90 days and is often cited as a model for speed.
The India-Australia Economic Cooperation and Trade Agreement (ECTA), an interim agreement signed in April 2022, also demonstrates India's renewed appetite for bilateral deals after a decade of stalled negotiations (including the collapse of RCEP talks in 2019).
WTO's GATT Article XXIV permits FTAs as an exception to the Most Favoured Nation (MFN) principle — member states may extend preferential tariffs to FTA partners without extending them to all WTO members, provided the agreement covers "substantially all trade."

Connection to this news: The India-Canada CEPA negotiations represent India's continued FTA pivot following its exit from RCEP, targeting developed-country partners where services trade (IT, professional services, education) and diaspora economic linkages can be leveraged.

WTO Framework — MFN, GATT Article XXIV, and the "Enabling Clause"

The Most Favoured Nation (MFN) principle, enshrined in GATT Article I, requires WTO members to extend any trade advantage granted to one country immediately and unconditionally to all other members. FTAs create a structured exception to MFN: under GATT Article XXIV, two or more countries may form a Free Trade Area or Customs Union, provided they eliminate tariffs on substantially all trade between them and do not raise external barriers against third parties.

GATT Article XXIV requires FTA negotiations to be completed within a "reasonable length of time," generally interpreted as 10 years.
For developing countries, the "Enabling Clause" (1979 Decision on Differential and More Favourable Treatment) provides additional flexibility, allowing preferential trade arrangements among developing countries without strict Article XXIV compliance.
India has used the Enabling Clause framework for its trade arrangements with neighbouring South Asian countries under SAFTA (South Asian Free Trade Area).
WTO's Trade in Services is governed separately by the General Agreement on Trade in Services (GATS); CEPA services chapters are assessed under GATS Article V (Economic Integration).
Non-tariff barriers (NTBs) — including sanitary and phytosanitary (SPS) standards, technical barriers to trade (TBT), and regulatory divergence — are often the harder negotiations in modern CEPAs; tariffs are increasingly low across developed economies.

Connection to this news: The India-Canada CEPA will operate within this WTO framework: goods liberalisation must cover "substantially all trade" under GATT Article XXIV, while the services chapter will fall under GATS Article V — both create legally binding commitments that go beyond any standalone ministerial statement.

India's FTA Strategy — Key Challenges and Learnings

India's history with FTAs has been mixed. Studies have found that some of India's existing FTAs (particularly with ASEAN and South Korea) resulted in widening trade deficits — partly because India liberalised goods without adequate complementary measures on services, intellectual property, and investment. The experience has shaped a more cautious but commercially driven approach to newer agreements.

India withdrew from RCEP (Regional Comprehensive Economic Partnership) in November 2019, citing concerns about trade deficit risks (particularly vis-à-vis China) and inadequate protections for the dairy, agriculture, and MSME sectors.
RCEP entered into force in January 2022 among its 15 remaining members; India remains outside.
India's trade deficit with ASEAN widened after the ASEAN-India FTA (AIFTA) came into force in 2010, partly attributed to tariff rate differentials and non-utilisation of FTA preferences by Indian exporters.
Key Indian negotiating priorities in modern CEPAs include: market access for services (Mode 4 — movement of natural persons), mutual recognition of professional qualifications, data localisation exemptions, and protection from rules-of-origin circumvention (particularly Chinese goods routed through FTA partners).
Canada is a major destination for the Indian diaspora (approximately 1.8 million people of Indian origin); this diaspora provides a commercial intelligence network and consumer base that enhances the economic complementarity for a CEPA.

Connection to this news: The India-Canada CEPA talks are taking place in a context where India has explicitly learned from past FTA pitfalls; services liberalisation, movement of professionals, and anti-circumvention clauses are expected to be higher priorities than in earlier agreements.

India-Canada Bilateral Relations — Political Context

India-Canada relations had experienced significant turbulence following diplomatic disputes in 2023–2024, before being reset during bilateral summits in late 2025. The G7 summit in Kananaskis, Canada (October 2025) provided the platform where both leaders agreed to pursue the CEPA; the formal Terms of Reference were exchanged in New Delhi in March 2026.

Current bilateral trade: USD 8.66 billion (FY 2024–25) — exports USD 4.22 billion, imports USD 4.44 billion; the trade balance is roughly even, unlike many of India's bilateral relationships.
Target: USD 50 billion in bilateral trade by 2030 — implying nearly a 6-fold increase, ambitious but reflective of untapped potential in services, education, critical minerals, and clean energy.
Canada is a significant source of potash for India's fertiliser sector; India is Canada's fastest-growing export market for pulses (lentils, chickpeas).
Areas under negotiation: goods (tariff reduction schedules), services (IT, professional services, financial services), investment protection, intellectual property, government procurement, and digital trade.

Connection to this news: The political reset and the formal launch of CEPA talks signal that both governments view economic integration as a stabilising instrument in the bilateral relationship — a pattern common in India's diplomatic toolkit where trade ties are used to anchor broader partnerships.

Key Facts & Data

India-Canada bilateral trade FY 2024–25: USD 8.66 billion (Exports: USD 4.22 bn; Imports: USD 4.44 bn).
Target under CEPA: USD 50 billion bilateral trade by 2030.
Terms of Reference for India-Canada CEPA signed: 2 March 2026 at Hyderabad House, New Delhi.
India has FTA/CEPA/CECA arrangements with approximately 18 countries/groups.
India-UAE CEPA (2022): negotiated in under 90 days; a benchmark for speed in India's FTA diplomacy.
India exited RCEP negotiations in November 2019; RCEP entered force January 2022 among 15 members.
GATT Article XXIV: the WTO provision permitting FTAs as exceptions to the MFN rule.
Indian diaspora in Canada: approximately 1.8 million people of Indian origin.
India is also in FTA discussions with Chile and Peru, expanding its Latin America trade diplomacy.