Canada and India have agreed to restart negotiations for a new trade agreement, the Indian government announced on Sunday, after discussions were paused following a diplomatic spat two years ago.
The announcement came after Canadian Prime Minister Mark Carney met with Indian Prime Minister Narendra Modi on the sidelines of the G20 summit in Johannesburg, South Africa.
According to India’s Prime Minister’s Office, the leaders agreed to begin talks on a high-ambition Comprehensive Economic Partnership Agreement (CEPA), aimed at doubling bilateral trade to USD 50 billion by 2030.
“Prime Minister @narendramodi and I met at the G20 Summit today, and launched negotiations for a trade deal that could more than double our trade to more than C$70 billion,” Carney posted on X. “India is the world’s fifth largest economy, and that means big new opportunities for Canadian workers and businesses.”
Both countries reaffirmed their long-standing civil nuclear cooperation and noted ongoing discussions to expand collaboration, including potential long-term uranium supply arrangements.
The restart of talks highlights improving relations between Canada and India, as Carney seeks to expand trade ties beyond the United States, Canada’s largest trading partner. He has pledged to double Canada’s non-U.S. exports over the next decade.
Negotiations for a broad trade pact were paused in 2023 after diplomatic tensions arose when Ottawa accused India of involvement in the killing of a Canadian Sikh separatist—a claim New Delhi denies. Despite the row, bilateral trade has grown, though it remains small relative to India’s economy. Two-way trade in goods and services reached about C$31 billion ($21.98 billion) in 2024, with Canada benefiting largely from C$16 billion in services exports. For comparison, Canada’s trade with China was nearly four times larger that year.
Carney emphasized that India is a reliable trading partner, while acknowledging there could still be sources of friction. “What we’re looking to do is to put that commercial relationship on a sound footing through a potential trade agreement between the two countries, which gives protections to our businesses, protections to Indian businesses, a clear set of rules, dispute mechanisms, and others, and build on those opportunities,” he said.
During the G20 summit, Carney also met with Brazilian President Luiz Inácio Lula da Silva, and both leaders agreed to intensify negotiations on a Canada-Mercosur free trade agreement, which includes Brazil, Argentina, Paraguay, and Uruguay.
