India and Canada are working to conclude a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026, according to the Ministry of External Affairs. The renewed trade push aims to eliminate tariffs, liberalize services, and establish a transparent investment framework between the two countries.
CEPA Negotiations and Trade Targets
Negotiators have completed three rounds of talks for the proposed CEPA, with the most recent discussions held in Ottawa from July 6 to July 10, according to Minister of State for External Affairs Kirti Vardhan Singh. In a written reply to the Rajya Sabha, Singh confirmed that both governments are making progress across multiple negotiating tracks to meet the late 2026 deadline.
During the inaugural India-Canada Finance Ministers’ Economic and Financial Dialogue in Toronto on August 28, 2026, Finance Minister Nirmala Sitharaman and Canadian Minister of Finance and National Revenue François-Philippe Champagne established a shared goal to expand bilateral trade to ₹4.65 lakh crore by 2030.
Bilateral Investment Treaty and Capital Flows
Alongside the free trade agreement, India signaled its readiness to begin negotiations for a Bilateral Investment Treaty (BIT) at the earliest. Sitharaman noted that global uncertainties have shifted emphasis toward bilateral relationships.
A BIT provides legally binding protections for investors, including pre- and post-establishment treatment, national treatment, protection from expropriation, and formal dispute settlement mechanisms. Canadian pension funds currently maintain active investments in Indian infrastructure and asset-monetization projects. Treaty-level protections are expected to encourage institutional investors to expand their exposure to long-term Indian assets.
Ministerial Framework and Future Workstreams
The economic dialogue in Toronto followed a March 2026 meeting in New Delhi between Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney. Prime Minister Modi plans to visit Canada later this year to maintain momentum on bilateral diplomatic and commercial ties.
In addition to trade and investment treaties, finance ministers from both nations agreed to collaborate across several financial sectors. Follow-on workstreams established during the dialogue include: * Payments modernization * Financial stability initiatives * Financial technology (FinTech) collaboration * Capital markets integration * Financial-crime cooperation
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