India and Canada are embarking on a fresh effort to strengthen their bilateral relations, initiating talks toward a comprehensive trade deal known as the Comprehensive Economic Partnership Agreement (CEPA). This move signals a significant step in mending ties that experienced a downturn following allegations of Indian involvement in the killing of a Sikh activist on Canadian soil in 2023.
The decision to revive CEPA negotiations was reached during a meeting between Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney on the sidelines of the G20 summit in Johannesburg. This marks their second face-to-face meeting since Carney assumed office, with their previous encounter occurring at the G7 summit in Canada in June.
The planned CEPA is envisioned as an expansive agreement encompassing various sectors, including goods, services, investments, agriculture, digital trade, labor mobility, and sustainable development. Foreign Affairs Minister Anita Anand anticipates that this agreement could potentially double two-way trade between the two nations by 2030, reaching US$50 billion.
Negotiations for a comprehensive trade deal between India and Canada initially began in 2010 but were later scaled down to focus on specific industries. These talks were suspended in 2023 after Canada publicly accused the Indian government of involvement in the assassination of a Sikh activist.
The current effort to revitalize the CEPA reflects a mutual desire to move past recent disagreements and foster a stronger economic and strategic partnership. According to a senior government official, the two countries are now commencing discussions to enhance cooperation.
Beyond trade, India and Canada, along with Australia, have recently established a trilateral partnership called the ACITI Partnership, focusing on critical technologies, clean energy, and artificial intelligence. This collaboration aims to diversify supply chains and promote the widespread adoption of AI.
During a recent interview, Prime Minister Carney affirmed his view of India as a reliable trading partner, highlighting the existence of mechanisms and systems to address any potential issues that may arise. Similarly, India's High Commissioner to Canada, Dinesh Patnaik, acknowledged Canada's potential as a reliable energy supplier, emphasizing India's growing consumption needs.
The resumption of CEPA negotiations has been welcomed by various stakeholders. Premier Scott Moe of Saskatchewan expressed strong support for the trade deal, emphasizing the importance of the Indian market for Saskatchewan's pea exports. In 2024, the province exported $480 million worth of peas to India, accounting for a significant portion of Canada's total pea production.
Despite the progress in trade relations, some challenges remain. Concerns about security and foreign interference continue to be subjects of discussion. Prime Minister Carney has stressed the importance of maintaining a security dialogue with India to rebuild trust and address these concerns.
The India-Canada Ministerial Dialogue on Trade and Investment in November 2025 underscored the resilience of the economic partnership between the two countries. Both ministers acknowledged the increasing two-way investment flows and reaffirmed their commitment to deepening bilateral cooperation through sustained dialogue and mutual respect. In 2024, bilateral trade in goods and services reached US$23.66 billion, with merchandise trade valued at nearly US$8.98 billion, representing a 10% increase over the previous year.
