Commerce and Industry Minister Piyush Goyal and his Canadian counterpart Maninder Sidhu on Wednesday held discussions for launching negotiations on a proposed free trade agreement. This means another trade deal will start loading when India, hard-pressed by Trump tariffs, has begun to explore trade agreements with various countries to diversify and boost its exports. Besides today’s shifting global trade landscape, India’s hard push for ramping up manufacturing requires markets abroad. Nearly a week ago, Goyal said India is in talks with 50 countries for trade agreements through 14 groups. India has already concluded agreements with Australia, the UAE, Mauritius, the UK and the four-nation EFTA grouping.
A trade deal with Canada will open up a prized market for Indian exports while helping India secure critical imports. Canada is also reeling under heavy tariffs imposed by Trump on it. The two sides have recently agreed to resume negotiations for the pact, officially known as Comprehensive Economic Partnership Agreement (CEPA), with an aim to increase the two-way trade to $50 billion by 2030
“Held a productive discussion with Minister Sidhu to advance the trade and commercial engagement with Canada. We undertook initial scoping and broad discussions on the overall approach, contours, macro objectives and modalities as part of preparations for the launch of CEPA negotiations,” Goyal has said in a social media post. Canadian trade minister Sidhu said in a social media post that he looks forward to welcoming Minister Goyal and his trade and investment delegation in the new year. Canadian Prime Minister Mark Carney is also expected to visit India next year.
A trade deal, interrupted
The India-Canada trade pact, CEPA, has been in the works for long. The first formal launch of CEPA negotiations between India and Canada took place on 16 November 2010 in New Delhi. Multiple rounds of negotiations were held. By 2013, the two sides had set up negotiating tables on several core areas such as goods, services, customs/trade facilitation, sanitary & phytosanitary, technical barriers to trade, origin procedures and institutional issues.Nearly 10 rounds of CEPA negotiations took place till 2017 after which the progress slowed down. In March 2022, the two countries formally re-launched CEPA negotiations and at the same time began exploring a limited interim pact, known as an Early Progress Trade Agreement (EPTA), as a stepping stone toward the full CEPA.However, the next year, in 2023, CEPA negotiations came to an abrupt halt. Canada paused negotiations amid tensions triggered by allegations made by then Prime Minister Justin Trudeau. Diplomatic momentum picked up only this year after Prime Minister Narendra Modi met his Canadian counterpart Mark Carney on the sidelines of the G7 summit in June.
The proposed pact aims to reduce or remove customs duties on a large share of traded goods, liberalise the movement of skilled professionals and boost bilateral investment flows. Despite the diplomatic freeze that began two years ago, trade momentum remained steady but has a lot of scope to grow. Two-way goods and services trade touched about C$31 billion ($21.98 billion) in 2024, largely in Canada’s favor due to its C$16 billion in services exports. In contrast, Canada’s total bilateral trade with China was almost four times bigger in 2024. Canada hosts one of the largest Indian-origin populations globally, forming a key pillar of economic and people-to-people ties.
Positive signs are in the air
Even before the negotiations for CEPA begin, there are positive signs. India and Canada are close to finalising an uranium export agreement deal valued at about US$2.8 billion, Canadian newspaper Globe and Mail reported last month, citing people familiar with the matter.
The uranium export contract, potentially running for 10 years, would see Canada’s Cameco Corp. supply the material as part of a broader civil nuclear cooperation effort between the two countries. “It’s possible the terms of the deal could be modified before it is announced,” sources familiar with the negotiations told the Canadian newspaper. In the past, too, India has imported uranium from Cameco as part of their 2015 agreement, when the company supplied India with the chemical valued at approximately US$350 million over five years.
India currently operates around 25 nuclear reactors, with six more under construction, many of which use Canadian Candu-derived pressurized heavy-water reactor designs. Broader cooperation could include Canada’s efforts to build commercial small modular nuclear reactors in India.
India and Canada have “a lot of potential” to work together on critical minerals, nuclear energy and artificial intelligence (AI), commerce and industry minister Goyal has said recently. Emphasising that there is much that India can learn from Canada as well as offer to the country, Goyal said, “There is a lot of potential on critical minerals, critical minerals processing technology. There is a good possibility on nuclear energy – particularly with our engagement with Canada on uranium supplies.”
India-Canada trade talks gaining momentum when Russian President Putin is in India to pave the way for expanded trade shows that India is willing to take full advantage of a shifting global trade to secure markets and critical imports across the world.