India Ready to Open Investment Treaty Talks With Canada
- MGMMTeam
- 4 hours ago
- 5 min read
India has said it is prepared to start negotiations on a Bilateral Investment Treaty with Canada as soon as possible. The offer came after Finance Minister Nirmala Sitharaman and Canadian Finance Minister François-Philippe Champagne closed the first Canada–India Finance Ministers’ Economic and Financial Dialogue in Toronto. A joint statement issued after the meeting put trade, investment and financial cooperation at the centre of a relationship both governments are trying to deepen. The same statement repeated a target first set when Prime Minister Narendra Modi and Prime Minister Mark Carney met in New Delhi in March 2026: raise two-way trade to CAD 70 billion, or about Rs 4.65 lakh crore, by 2030.
What the Toronto meeting set in motion
The new Economic and Financial Dialogue is meant to sit beside the trade talks already under way, not replace them. Sitharaman and Champagne compared notes on the world economy and on each country’s domestic priorities, then turned to the practical work of moving capital, payments and projects between the two markets. India used the meeting to say it would open BIT talks at the earliest. In Toronto, Sitharaman also spoke of finishing a foreign investment protection agreement by the end of this year, on the same calendar as the Comprehensive Economic Partnership Agreement that the two prime ministers have asked officials to close in 2026.
Canadian officials welcomed the rise in two-way investment and pointed to the large presence of Canadian pension funds and other institutional investors in India. Ottawa’s readout noted that tax relief already given to those investors in India has helped keep that capital in place. Champagne described the meeting as part of Canada’s effort to be strong at home and more diversified abroad. He said the two economies are complementary and that Canada can be a useful partner on energy security and food security. Sitharaman said bilateral ties matter more in a period of global uncertainty and described the new dialogue as an attempt to move past ordinary trade in goods and services toward a wider partnership covering investment, finance, capital markets and regulation.
The trade targets need to be read carefully
The CAD 70 billion figure is a goods-and-services ambition. Sitharaman has put current goods-and-services trade at about USD 24 billion in 2024. Other briefings have used a figure near C$30 billion a year. Merchandise trade is much smaller. India’s Commerce Ministry puts two-way goods trade at about USD 8 billion in 2025-26, with Indian exports of USD 4.67 billion and imports of USD 3.28 billion, down from USD 8.66 billion the year before. Some Indian statements still attach a separate USD 50 billion merchandise target to the CEPA by 2030. Champagne has called the CAD 70 billion goal totally achievable. Whether either number is met will depend on what is written into the CEPA and the investment treaty, not on the press conference that announced them.
Where the CEPA talks stand
CEPA negotiations were relaunched during Carney’s March visit to New Delhi, after terms of reference were signed and chief negotiators met. Three rounds have been completed, the latest in Ottawa from 6 to 10 July 2026. Those sessions covered goods, services, intellectual property, rules of origin, sanitary rules and technical barriers to trade. Commerce and Industry Minister Piyush Goyal said earlier this year that the two sides would chase areas of agreement and leave sensitive sectors out rather than let difficult chapters block a deal. Trade Minister Maninder Sidhu has said he wants an agreement locked down before the year ends. Canadian High Commissioner Chris Cooter has called the 2026 deadline realistic, mainly because both prime ministers want it. Sitharaman said in Toronto that the trade pact may be concluded soon.
Pension funds, insurance and cheaper payments
Canadian capital is already a large part of the commercial relationship. Official Canadian figures put total direct and indirect Canadian investment in India above CAD 110 billion in 2024. Sitharaman has spoken of about CAD 100 billion from pension funds alone. Cumulative FDI equity from Canada between April 2000 and March 2026 is much smaller in India’s official count, at USD 4.34 billion, or 0.55 per cent of total inflows. That gap is why New Delhi is asking Canadian institutions to look beyond infrastructure stakes they already hold.
In Toronto, Sitharaman met Sun Life, the Canada Pension Plan Investment Board, Ontario Teachers’ and Canaccord Genuity. She pointed to the rise in the insurance FDI cap from 74 per cent to 100 per cent and to the government’s Insurance for All by 2047 goal. She also presented GIFT City as a base for Canadian financial firms that want a foothold in India and the wider region. Payments were treated as a near-term piece of work. The ministers agreed to encourage officials and companies to ease cross-border remittances and merchant payments and to expand India’s Unified Payments Interface in Canada through partnerships with payment firms. The official Canadian statement said wider use of such systems could make transfers faster and cheaper and help trade, tourism, education and smaller businesses. That matters in a corridor that already includes a large Indian student population in Canada.
Energy, minerals and the rest of the visit
Both sides listed critical minerals and energy as subjects for official follow-up. Sitharaman said cooperation there would help both countries deal with concentrated global supply chains. Champagne spoke of the link between food, energy, economic and national security and of possible work on critical minerals, artificial intelligence and data centres. The March 2026 reset had already produced a Strategic Energy Partnership covering LNG, LPG, uranium, solar and hydrogen, and a C$2.6 billion uranium supply arrangement with Cameco for 22 million pounds between 2027 and 2035.
After the finance dialogue the two ministers sat with Canadian firms from financial services, fintech, technology, artificial intelligence, infrastructure, energy and natural resources. Sitharaman’s Canada and United States tour runs from 25 August to 2 September. After Toronto she is due in Chicago, Asheville and New York, including the G20 finance meetings. The next India–Canada Economic and Financial Dialogue is scheduled for 2027.
The commercial push also reflects Canada’s search for markets beyond the United States as tariff tensions with Washington have worsened. That does not by itself close a CEPA or a BIT. It does explain why both capitals are treating the remaining months of 2026 as a working deadline rather than a distant aspiration.
The MGMM Outlook
India’s decision to begin Bilateral Investment Treaty talks with Canada marks an important step in the renewed economic engagement between the two countries. The first Canada–India Finance Ministers’ Economic and Financial Dialogue in Toronto has created a broader framework for cooperation covering investment, finance, capital markets, payments, energy and critical minerals. With both sides aiming to raise two-way goods-and-services trade to CAD 70 billion by 2030 and complete the Comprehensive Economic Partnership Agreement in 2026, the focus is increasingly shifting from traditional trade to long-term investment and economic integration. Canadian pension funds and institutional investors already have a significant presence in India, while New Delhi is seeking to attract more capital by highlighting opportunities in infrastructure, insurance, financial services, technology and GIFT City. The proposed investment treaty could provide greater certainty for investors and strengthen the foundation for future economic cooperation.
The renewed momentum also reflects the complementary strengths of the two economies. Canada brings substantial institutional capital, energy resources, critical minerals and expertise in areas such as finance and technology, while India offers a large and rapidly expanding market, a growing digital economy and opportunities across infrastructure, manufacturing and services. Cooperation on UPI, cross-border payments, uranium, LNG, critical minerals, artificial intelligence and data centres could further expand the relationship beyond conventional commerce. The CAD 70 billion trade ambition is sizeable compared with current merchandise trade, but the parallel progress on CEPA, investment protection and sector-specific partnerships provides a pathway toward achieving greater economic engagement. If the commitments made by both governments are translated into concrete agreements and business opportunities, 2026 could become a significant year in shaping a stronger and more diversified India–Canada economic partnership.
(Sources: News18, LiveMint, Moneycontrol)
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