India, Canada to re-launch FTA negotiations to unlock full potential of bilateral trade

India and Canada on Friday held the fifth Ministerial Dialogue on Trade and Investment (MDTI) in New Delhi and agreed to formally re-launch the negotiations for a proposed free trade agreement, which aims at boosting economic ties between the two countries.

The meeting was co-chaired by Commerce and Industry Minister Piyush Goyal and Mary Ng, Canada's Minister of International Trade, Export Promotion, Small Business and Economic Development.

The ministers underlined the robust trade and economic relationship between India and Canada and resolved to further strengthen the bilateral ties and economic partnership.

The two countries agreed to consider an interim agreement or early progress trade agreement that could bring early commercial gains to both the countries.  

The ministers also emphasised that the agreement would help in expanding bilateral trade in goods and services by unlocking the potential across sectors, as per a joint statement.

The interim agreement would include high level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover any other areas mutually agreed upon, it said.

Reduce/eliminate customs duty on goods traded

In a free trade agreement, two trading partners significantly reduce or eliminate customs duty on the maximum number of goods traded between them. They also relax norms for promoting trade in services and investments. In an interim pact, two nations reduce or eliminate duties on a limited number of goods.

"The ministers agreed to formally re-launch the negotiations for India-Canada Comprehensive Economic Partnership Agreement (CEPA) and also consider an interim agreement or early progress trade agreement that could bring early commercial gains to both the countries," the statement said.

India and Canada also discussed ways to provide greater market access for commodities such as pulses, sweet corn, baby corn and banana.

"Both countries agreed to undertake intensified work with respect to the recognition of Canada’s systems approach to pest risk management in pulses and market access for Indian agriculture goods such as sweet corn, baby corn and banana," the statement said.

The two sides emphasised to enhance cooperation in sectors such as pharmaceuticals and critical and rare earth minerals as well as in areas like tourism, urban infrastructure, renewable energy and mining.

"They also noted the role of strong people-to-people ties between the two countries, including movement of professionals and skilled workers, students, and business travellers, in strengthening the bilateral economic partnership," it said.

India's exports to Canada stood at $2.9 billion in 2020-21 as against $2.85 billion in 2019-20. Imports in 2020-21 was $2.68 billion as against $3.9 billion in 2019-20.