India and Canada Aim to Finalise Trade Talks by Year End

India and Canada aim to finalise CEPA talks by year-end and raise bilateral trade to USD 50 billion by 2030, with stronger cooperation planned across critical minerals, energy, investment, technology and services.

The governments of India and Canada have decided to end the negotiations for the signing of the Comprehensive Economic Partnership Agreement (CEPA) before the year 2026 due to their intent to increase trade and economic relationships between themselves. This initiative to trade is included in their efforts to engage more commercially after experiencing strained diplomatic ties.

The two nations have established a challenging goal of increasing their annual bilateral trade volume to USD 50 billion by 2030. The Prime Ministers of both nations, Mr. Narendra Modi and Mark Carney of Canada, met in March and decided that they should intensify economic cooperation so as to conclude the CEPA. The current bilateral trade volume is estimated to be USD 13 billion.

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It is anticipated that the trade deal will provide a platform for enhancing market access, lowering barriers to trade, and increasing the flow of goods and services between the two countries. It will also pave the way for investments, technological collaboration, and participation in international value chains.

There are efforts being made by both India and Canada to increase collaboration beyond the conventional realm of trade in goods. Critical minerals, clean energy, civil nuclear cooperation, financial services, education, agriculture, and advanced technology are some sectors in which increased cooperation has become essential. Canada has considerable deposits of critical minerals, whereas India is looking for secure sources of these minerals.

Energy cooperation is yet another domain where both countries are enhancing their collaboration. Hydrocarbons as well as renewable energy are discussed along with green hydrogen and energy storage. Nuclear energy cooperation is becoming a new trend, as India and Canada have entered into an agreement for a long-term supply of uranium, among other things.

Investment is seen as one of the important elements that will form part of the new economic partnership. The pension funds in Canada, together with other institutional investors, already have a strong presence in India in relation to infrastructure projects and other long-term investments. On the visit to Canada by Finance Minister Nirmala Sitharaman, she encouraged the involvement of Canadian business and institutional investors in the opportunities in India.

In addition to this, the new round of trade negotiations takes place in light of the efforts being made by both countries to instill more confidence among their respective business establishments. Such engagement between policymakers and businesses would lead to the identification of issues that need to be sorted out.

CEPA would serve as a platform that provides predictability to companies operating in both markets. Access would be beneficial to Indian exporters in areas like pharmaceuticals, textiles, engineering goods, IT and services, while opportunities for Canada would arise in infrastructure, energy, finance, agriculture and technology in India.

Aside from trade, there is also an effort to cooperate on defence, maritime security, and education. Both nations are working towards initiating a dialogue for defence purposes, and some universities are looking at cooperating on topics such as artificial intelligence, healthcare, agriculture, and innovation.

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It is clear that attempts to sign off on the CEPA by year end are a major development in the larger economic rapprochement process between India and Canada. A signed deal would certainly increase business certainty and assist both countries to diversify their international trading networks.

With a trade objective of USD 50 billion for 2030 and negotiations inching towards closure by the end of the year, India and Canada hope to convert their renewed political interactions into more economic engagement. The anticipated CEPA will be a key forum for expanding their bilateral business activities.