India, Canada to resume trade talks next week, says Piyush Goyal

New Delhi: India and Canada will resume formal discussions on a comprehensive economic partnership agreement (CEPA) next week, commerce and industry minister Piyush Goyal said on Friday, signalling that the trade track between the two countries is moving forward after a long pause.

“India is widening its engagement with several major economies as part of its broader strategy to deepen trade ties and support the government’s push for self-reliance,” Goyal said while speaking at an event organised by industry’s lobby body Ficci.

The move signals a diplomatic and commercial reset between the two countries after a period of strained relations, with both sides targeting a sharp increase in bilateral trade by 2030.

While talks had stalled after bilateral relations deteriorated sharply in 2023, Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney agreed on 18 June during the G7 Summit in Kananaskis to revive negotiations.

Since then, senior Canadian ministers, including foreign affairs minister Anita Anand (12–14 October) and trade minister Maninder Sidhu (12–14 November), have visited India to rebuild trust and momentum.

In their most recent interaction, Modi and Carney met for the second time on 23 November on the sidelines of the G20 Summit in Johannesburg and agreed to unlock the potential for deeper cooperation in defence and space sectors, besides advancing ties in areas such as trade, investment, technology and energy.

Stressing the Prime Minister’s call to place Atmanirbhar Bharat at the centre of India’s economic planning, Goyal said that this vision has now become a collective national mission.

He said India has already concluded what he described as balanced and equitable trade agreements with Australia, the UAE, Mauritius, the UK and the four-nation EFTA bloc.

Negotiations are underway with countries that together account for nearly 50 markets worldwide, including Oman, New Zealand, Bahrain, Qatar and the wider GCC grouping.

India is simultaneously pursuing a second-stage agreement with Australia and reviewing its FTAs with ASEAN and South Korea to correct what he called existing imbalances.

India is also in active discussions with the United States and the 27-nation European Union, has recently started talks with the Eurasian region, and finalised the terms of reference with Israel last week to begin negotiations soon.

“The India–Canada CEPA track is also being revived. Canada and India are looking at CEPA, and next week we will kickstart conversations around that,” Goyal said, signalling a reopening of formal dialogue.

Untapped opportunities

A comprehensive trade agreement between India and Canada will beneficially open untapped economic opportunities for both countries, said Agneshwar Sen, trade policy leader, EY India.

"Canada accounts for less than 1% of India’s total exports, and India is just the 14th largest trading partner for Canada, this is despite India’s vast manufacturing base and Canada's need for diversified suppliers,” said Sen.

Sectors like textiles, leather footwear, and gems & jewellery, where India has global competitiveness, stand to gain significantly. For instance, Canada imports over $3 billion worth of footwear and leather goods annually, but India's share is under 2%.

India's gems and jewellery exports exceeded $35 billion last year, while its exports to Canada were less than $300 million.

“Given the political reset in bilateral relations, it may be useful to have an early harvest deal focusing on sectors where complementarities are strong and sensitivities are low like textiles, gems and jewellery, agri-products, and clean energy,” said Sen. “This will offer quick relief to the sectors in both countries looking for alternative markets. By targeting visible, mutual gains, such a deal can build trust, unlock MSME opportunities, and lay the groundwork for a sustainable economic partnership.”

India’s trade with Canada remains slightly in deficit, with exports at $4.22 billion and imports at $4.44 billion in FY25. Exports grew from $3.84 billion in FY24, while imports fell from $4.55 billion.

India imports critical minerals, nuclear and clean-energy equipment, aerospace parts, and agricultural products, including lentils. Its exports to Canada include textiles, auto components, pharmaceuticals, IT services and food-processing goods, including dairy.

Bilateral relations had sharply deteriorated in 2023 after the then Canadian Prime Minister Justin Trudeau accused Indian agents of involvement in the killing of a Khalistani separatist.

India rejected the allegations, expelled Canadian diplomats, and Ottawa responded in kind. Trade talks paused, visa services were briefly suspended, and diplomatic engagement froze. However, trade between the two countries continued despite the diplomatic strain.