India and Canada will begin negotiations towards free trade deal early next year: Official

Toronto: Negotiations towards a free trade deal between India and Canada will commence early next year.

A senior Indian official told the Hindustan Times that while negotiations towards the comprehensive economic partnership agreement (CEPA) could commence as early as January, they would certainly begin within the first quarter of 2026.

The announcement that the two countries will enter into negotiations towards such a “high ambition” trade agreement came last month following the bilateral meeting between Prime Ministers Narendra Modi and Mark Carney on the margins of the G20 Leaders' Summit in Johannesburg.

The official pointed out both countries have frameworks in place to facilitate the negotiations process. India has already negotiated deals with the United Kingdom, Australia and the United Arab Emirates, while Canada has clinched agreements with countries like Indonesia.

The official said that the existence of such structures will ideally ensure negotiations are concluded early.

In a statement after the Johannesburg bilateral, Canada's Prime Minister's Office said, “The leaders expressed confidence that the CEPA will serve as a powerful economic anchor and help more than double two-way trade to (CA) $70 billion by 2030.”

In a post after the meeting, Modi said, “We agreed to further advance our relations in the coming months, particularly in trade, investment, technology and innovation, energy and education.”

For now, the principal challenge for the two countries is not the usual irritants that have held the relationship back, but “capacity constraints”. As the official explained both India and Canada have to face the challenge of American tariffs and work towards a trade deal with the United States. At the same time, India is also negotiating the conclusion of a deal with the European Union and Canada is in talks for agreements with the ASEAN bloc and countries like the Philippines.

Prior to the bilateral with Modi in Johannesburg, Carney described India as reliable trade partner but underscored the need for a trade deal. “The ability to have more effective trade with them, to scale that trade with them, would be greatly helped by that,” he stressed.

He said Canada has a “strong commercial relationship with India' with Canadian companies “one of the largest foreign investors”. In that context, he said, “What we're looking to do is put that down on a sound footing through a potential trade agreement.”

India and Canada worked on a CEPA earlier but that was dropped in favour of the Early Progress Trade Agreement (EPTA) in 2022, so they could capture low-hanging fruit. However, after several rounds of negotiations, Canada “paused” talks in August 2023, just weeks before then Prime Minister Justin Trudeau stated in the House of Commons on September 23 that year that there were “credible allegations” of a potential link between Indian agents and the killing of pro-Khalistan figure Hardeep Singh Nijjar three months earlier in Surrey, British Columbia. India described those accusations as “absurd” and relations cratered.

A gradual reset was set in motion after Carney assumed charge as PM this year, with the breakthrough in relations coming when he held a bilateral with Modi on the margins of the G7 Leaders' Summit in Kananaskis in June. Since then, the relationship has gained momentum.

Carney is expected to visit India in the first quarter of next year to give a further boost to bilateral ties.

Source: Hindustan Times
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