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Renewed discussions between India and Canada are paving the way for a more robust economic partnership by leveraging the unique strengths of each country in sectors such as energy, technology, trade, and innovation. The proposed Comprehensive Economic Partnership Agreement (CEPA) seeks to raise bilateral trade to USD 50 billion by 2030, while also encouraging greater investment, technological cooperation, and strategic economic alignment.
The revival of CEPA talks marks an important step in rebuilding economic trust and exploring untapped areas of cooperation. Both nations are now moving toward pragmatic collaboration shaped by shared economic interests and the evolving global trade environment. The CEPA framework is expected to expand trade, enhance investment flows, and strengthen sector-specific partnerships.
A broader shift in global trade dynamics
This renewed engagement reflects a larger trend in global economic policy, where countries are increasingly seeking reliable partners to diversify trade, fortify supply chains, and reduce dependence on a limited set of markets. In this context, the India–Canada CEPA presents an opportunity to develop a bilateral relationship that has historically underperformed relative to its potential.
Resuming trade negotiations
High-level interactions, including meetings during major global forums such as the G20 Summit, have helped restore dialogue and confidence between the two governments. The CEPA discussions are now focusing on market access, regulatory alignment, and sectoral priorities. Restarting negotiations with a fresh approach is crucial, given the rapidly changing global trade patterns influenced by geopolitical tensions, supply-chain disruptions, and evolving trade alliances. India and Canada are well-positioned to deepen cooperation by capitalizing on their complementary economic strengths.
Expanding trade beyond current levels
Both countries aim to achieve USD 50 billion in annual trade by 2030 through CEPA and enhanced sectoral cooperation. Presently, bilateral trade in goods stands at approximately USD 13 billion, while services trade totals around USD 19 billion, bringing overall trade to about USD 32 billion. India’s exports to Canada have diversified beyond traditional sectors like pharmaceuticals, textiles, and gems and jewellery, now including engineering goods, machinery, electronics, chemicals, and automobiles. Canadian exports to India primarily comprise pulses, fertilisers, crude oil, wood pulp, and other resources vital to India’s agricultural and industrial needs. Despite these gains, bilateral trade remains below its full potential, underscoring CEPA’s role in unlocking new opportunities.
Complementary strengths driving cooperation
A key driver for CEPA is the complementary nature of the two economies. India, one of the fastest-growing major economies, offers a large consumer market, a dynamic services sector, and expanding manufacturing capabilities supported by initiatives such as Make in India, Production-Linked Incentive (PLI) schemes, and digital infrastructure development.
Canada, on the other hand, brings abundant natural resources, advanced technological expertise, and world-class research facilities. It is a leading exporter of agricultural products, minerals, and energy resources, while also excelling in artificial intelligence, biotechnology, and clean technology sectors.
These complementary strengths create a strong foundation for mutually beneficial economic collaboration. Canada can help meet India’s growing demand for energy, critical minerals, and agricultural inputs, while India provides Canadian businesses access to a large consumer base, skilled workforce, and competitive manufacturing environment. By leveraging these synergies, the CEPA could significantly enhance bilateral trade, investment, and long-term economic integration.
