India-Canada Trade Talks Resume Amid Shifting Diplomatic Landscape

Ottawa/New Delhi: After a prolonged period of diplomatic tension, India and Canada are set to revive discussions on a bilateral trade agreement. Relations between the two nations had deteriorated sharply during former Canadian Prime Minister Justin Trudeau’s tenure in 2023, when negotiations on a Free Trade Agreement (FTA) were stalled. Trudeau’s administration had also expelled Indian diplomats and halted discussions, citing concerns over Khalistan supporters in Canada.

Renewed Momentum Under Prime Minister Mark Carney
The tide is now turning under Prime Minister Mark Carney, who took office in March 2025. In a recent interview, Carney confirmed that Canada has formally resumed trade talks with India. Commerce and Industry Minister Piyush Goyal also stated that both countries are preparing to discuss the Terms of Reference (ToR), a critical step toward formalizing any trade agreement. The renewed dialogue aims to strengthen bilateral economic ties and explore mutually beneficial opportunities in critical sectors.

Strategic Economic Considerations
The resumption comes as Canada seeks to reduce its heavy dependence on the United States, particularly following the imposition of high tariffs by former U.S. President Donald Trump. In 2025, Trump had levied a 35% tariff on Canadian goods and additional 50% tariffs on steel and copper, prompting Ottawa to diversify its trade portfolio toward India, the UAE, and Europe. Canada views India as a growing market with significant economic potential, making the renewed trade dialogue strategically important.

High-Ambition CEPA and Economic Potential
Both nations are now aiming for a High-Ambition Comprehensive Economic Partnership Agreement (CEPA), with the objective of doubling bilateral trade by 2030. Currently, India’s exports to Canada increased by 9.8% in 2024–25, reaching $4.22 billion, while imports from Canada fell slightly to $4.44 billion. Total bilateral trade in goods and services in 2023 stood at $18.38 billion. Under the proposed CEPA, trade could potentially rise to $50–70 billion, positioning India and Canada as key partners in Asia’s rapidly growing economic landscape.

Opportunities Beyond Trade
The agreement is expected to open avenues for collaboration in critical minerals, clean and nuclear energy, supply chain diversification, advanced technology, artificial intelligence, and quantum computing. India’s vast STEM talent pool and innovation capacity, combined with Canada’s strong market and the presence of over 2.9 million people of Indian origin and 427,000 Indian students, are seen as catalysts for deepening economic and cultural ties.

A Win-Win Partnership
Experts suggest that finalizing the trade deal will create substantial opportunities for both nations. It will strengthen economic resilience, expand market access, and pave the way for a robust, future-ready India-Canada partnership that extends beyond commerce to education, technology, and strategic collaboration.