India, Canada to Launch Free Trade Talks in Early 2026, Eyeing $70B in Annual Trade
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India and Canada are set to begin negotiations for a comprehensive economic partnership agreement (CEPA) in early 2026, aiming to create a high-ambition trade deal. The talks will likely start in January, with both countries having frameworks in place to facilitate the process. This development comes after a bilateral meeting between Prime Ministers Narendra Modi and Mark Carney on the sidelines of the G20 Leaders' Summit in Johannesburg last month. The two leaders expressed confidence that the CEPA will serve as a powerful economic anchor, doubling two-way trade to $70 billion by 2030. India has already negotiated deals with the UK, Australia, and the UAE, while Canada has agreements with countries like Indonesia. The existence of these frameworks is expected to expedite the negotiations. One of the primary challenges for both countries is addressing capacity constraints, as they work to navigate American tariffs and pursue trade deals with the US, EU, and ASEAN bloc. India is also currently negotiating a deal with the EU, while Canada is in talks with the Philippines. In a recent bilateral meeting, Carney described India as a reliable trade partner, emphasizing the need for a trade deal to boost trade and investment. Canada's Prime Minister's Office stated that the CEPA will help Canadian companies, one of the largest foreign investors in India, by creating a stable and secure trade environment. The two countries had previously worked on a CEPA, but it was dropped in favor of the Early Progress Trade Agreement (EPTA) in 2022. However, after several rounds of negotiations, Canada paused talks in August 2023 due to allegations of a potential link between Indian agents and the killing of a pro-Khalistan figure in Canada. The relationship has since undergone a gradual reset, with Carney's assumption as PM and a bilateral meeting in June marking a significant breakthrough. Carney is expected to visit India in the first quarter of next year to further boost bilateral ties.
