India and Canada Set to Restart Free-Trade Negotiations: A Renewed Partnership for 2030

India and Canada have signaled a fresh diplomatic and economic reset, announcing that formal negotiations on the Comprehensive Economic Partnership Agreement (CEPA) will restart early next year. The talks, paused since 2023 due to a period of strained ties, are now expected to resume in January 2026 or within the first quarter. This decision follows a constructive meeting between Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney during the G20 Leaders’ Summit, where both leaders affirmed their commitment to rebuilding cooperation across multiple sectors including trade, technology, and investment.

This renewed engagement marks a significant shift in bilateral relations, especially after high-level diplomatic tensions impacted earlier rounds of CEPA discussions. With both governments restoring diplomatic channels and reinstating their high commissioners, the environment is once again conducive for structured negotiations aimed at strengthening long-term economic collaboration.

A drone view shows cranes, shipping containers and transport trucks at the Port of Montreal in Montreal, Quebec, Canada. (REUTERS) | Hindustan Times

Ambitious Goals for Trade and Economic Growth

At the heart of the revived CEPA initiative lies a shared ambition to dramatically expand bilateral trade by 2030. Current trade flows amount to approximately US$8.6 billion, but projections suggest that with a robust free-trade framework, this figure could rise considerably—some estimates reaching up to CA$70 billion within the next five years. India’s exports to Canada include pharmaceuticals, machinery, and chemicals, while Canada serves as a vital supplier of agricultural goods, fertilizers, and mineral resources.

The expanded scope of CEPA is expected to include goods and services, digital trade, agriculture, mobility, clean energy, critical minerals, and technology-focused collaboration. Canada’s strengths in the clean-tech and energy sectors align well with India’s growing demand for sustainable solutions and critical mineral supplies. Similarly, India's expanding digital economy and manufacturing base present significant opportunities for Canadian investment and partnership. Studies suggest that a comprehensive agreement could add billions to Canada’s GDP by 2035 and significantly accelerate India’s access to advanced technologies and diversified supply chains.

Broader Cooperation Beyond Trade

Beyond its economic promise, CEPA is also envisioned as a foundation for deeper strategic cooperation. India and Canada are exploring joint initiatives in clean energy transitions, civil nuclear technology, higher education, and research partnerships. The countries share a strong people-to-people connection, with a vast Indian diaspora shaping Canada’s social and economic landscape, and educational exchanges poised to grow further under a smoother mobility framework.

The renewed diplomatic warmth—reflected in high-level dialogues and restored trust—has created an opportunity to rebuild collaboration in sectors previously affected by geopolitical disagreements. Both countries recognize that in an increasingly uncertain global environment, diversified partnerships and resilient supply chains are critical. CEPA is therefore not just a trade agreement but a foundation for a long-term, multi-layered partnership.

Geopolitical Context and the Road Ahead

The revived enthusiasm for CEPA comes after a turbulent phase in India–Canada relations. The earlier suspension of trade talks stemmed from allegations made by Canada’s previous leadership, which India firmly rejected. With new leadership in Ottawa and renewed diplomatic outreach, both sides have shown readiness to move forward. This shift reflects the realisation that the benefits of cooperation far outweigh the costs of prolonged tension.

As negotiations begin in 2026, both nations face the challenge of harmonising regulatory frameworks and balancing domestic sensitivities with long-term strategic goals. Capacity constraints may influence the pace of talks as India and Canada simultaneously engage in other major trade negotiations globally. However, the strong political will demonstrated by both governments indicates that CEPA now stands on firmer ground than ever before.

The MGMM Outlook

India and Canada’s decision to restart CEPA negotiations marks a positive shift toward rebuilding a relationship that had been strained in recent years. This renewed engagement reflects a practical recognition of India’s rising global economic relevance and the growing necessity for countries to form stable, respectful partnerships. Canada’s willingness to revisit an expansive trade framework—covering sectors like digital innovation, clean energy, critical minerals, agriculture, and mobility—highlights how India’s economic momentum and technological advancement are reshaping global trade priorities. As both nations restore diplomatic channels, we see this as an opportunity for a more balanced, transparent, and future-oriented partnership grounded in mutual growth rather than political distractions.

The projected expansion of trade—from the current US$8.6 billion to potentially several multiples by 2030—shows the scale of what a well-structured CEPA can unlock. From our viewpoint, this collaboration is not just about tariffs or market access; it signals a deeper strategic realignment, where resilient supply chains, energy security, advanced technology exchange, and stronger people-to-people ties become central pillars. India’s rapidly growing digital ecosystem and manufacturing strength align naturally with Canada’s expertise in clean energy and resources, making the renewed negotiations not only timely but also essential. As diplomatic trust is rebuilt and the two countries enter a more constructive phase, this reopening of CEPA talks stands as a reminder that long-term development should always rise above temporary geopolitical turbulence.

(Sources: Hindustan Times, Economic Times, Livemint)