PIB TrackerIndia and Canada open CEPA negotiations
A Terms of Reference was signed to begin negotiating a comprehensive India–Canada trade pact, with bilateral trade targeted at USD 50 billion by 2030.
What happened
- India and Canada formally launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA) in New Delhi on 2 March 2026, and agreed to conclude the pact soon.
- The Terms of Reference (ToR) for the negotiations were signed by Piyush Goyal, India's Minister of Commerce & Industry, and Maninder Sidhu, Canada's Minister of International Trade.
- The documents were exchanged at Hyderabad House, New Delhi, in the presence of Prime Minister Narendra Modi and Prime Minister Mark Carney of Canada.
- Prime Minister Modi set the goal of raising bilateral trade to US$50 billion by 2030; the negotiations will cover trade in goods, services and other mutually agreed policy areas.
- The step follows the leaders' decision at their bilateral meeting on the margins of the G7 Summit in Kananaskis, Canada (October 2025) to work towards finalising the ToR.
- The ToR sets the format, frequency and approach of the talks — it is the procedural rulebook for negotiating the agreement, not the agreement itself.
Background & context
A Comprehensive Economic Partnership Agreement belongs to the family of bilateral free-trade frameworks India negotiates, alongside the Comprehensive Economic Cooperation Agreement (CECA) and the plainer Free Trade Agreement (FTA). The "comprehensive" label signals that the pact reaches well beyond tariff cuts on goods: it folds in services, investment, and other policy chapters such as standards, government procurement, intellectual property and rules of origin. India has used the CEPA/CECA template repeatedly — the India–Japan CEPA (2011), the India–Korea CEPA (2010), the India–UAE CEPA (2022), the India–Australia ECTA (2022) and the India–EFTA TEPA (2024) are all members of the same negotiating lineage. The India–Canada talks are best read as the latest entrant in this larger push by the Department of Commerce to widen India's network of preferential trade arrangements.
The two countries are not new to this negotiation. They had earlier pursued a Comprehensive Economic Partnership Agreement (CEPA) and an interim Early Progress Trade Agreement (EPTA), but the process stalled amid a sharp diplomatic downturn in 2023–2024. The 2 March 2026 signing therefore marks a reset of an effort that had been paused rather than the opening of a wholly new track. The immediate political groundwork was laid at the G7 Summit in Kananaskis in October 2025, where the two leaders agreed to revive economic engagement; the ToR signing converts that political signal into a formal negotiating mandate, and it sat within a wider package of outcomes from the Canadian Prime Minister's visit that also produced a Joint Leaders' Statement and a CEO Forum.
A ToR is the disciplining document of any trade negotiation. By fixing the scope (which chapters are on the table), the structure (negotiating rounds, working groups, frequency) and the shared objective (an "ambitious, balanced and mutually beneficial" outcome), it prevents either side from re-opening the basic terms of engagement once talks begin. It is a guide-rail, not a commitment to specific tariff lines — those are settled chapter by chapter in the rounds that follow. A typical comprehensive negotiation then proceeds through successive rounds covering market access for goods, services and investment, rules of origin, sanitary and technical standards, and dispute settlement, before a final text is initialled, legally scrubbed, signed and — on India's side — examined by the Cabinet before it enters into force.
The agreement also sits within a clear institutional chain on the Indian side. Trade negotiations are run by the Department of Commerce within the Ministry of Commerce & Industry; the negotiated outcome, once concluded, is taken to the Union Cabinet for approval, after which it is signed and implemented. Unlike the United States, India does not require parliamentary ratification of a trade agreement, which is why the executive can move from a signed CEPA to implementation relatively quickly once the rounds conclude. This procedural backdrop is what makes the ToR significant: it is the first formal, government-to-government instrument in the chain that ultimately ends in an enforceable treaty.
For Prelims
- Entity: India–Canada Comprehensive Economic Partnership Agreement (CEPA) — negotiations launched 2 March 2026 via signing of the Terms of Reference.
- Signatories of the ToR: Piyush Goyal (India, Commerce & Industry) and Maninder Sidhu (Canada, International Trade); exchanged before PM Modi and PM Mark Carney at Hyderabad House.
- Nodal ministry (India): Ministry of Commerce & Industry — its Department of Commerce conducts India's trade negotiations.
- Coverage: trade in goods, services, and other mutually agreed policy areas.
- Headline target: bilateral trade of US$50 billion by 2030.
- Current bilateral trade (FY 2024-25): USD 8.66 billion — India's exports USD 4.22 bn, imports USD 4.44 bn (Source: DGCI&S), i.e. a small trade deficit for India.
- India's key exports to Canada: drugs & pharmaceuticals, iron & steel, seafood, cotton garments, electronic goods, chemicals.
- India's key imports from Canada: pulses, pearls & semi-precious stones, coal, fertilizer, paper, petroleum crude.
- Services trade: India's services exports to Canada are led by telecommunications, computer and information services, and other business services.
- Canada's market: population of 41.65 million (2025) and a GDP of US$2.34 trillion at PPP.
- People-to-people link: Canada hosts over 425,000 Indian students and a large Indian community, described in the leaders' framing as "One Family".
- Origin point: follow-up to the leaders' statement at the G7 meeting in Kananaskis, Canada (October 2025).
What this is NOT: The 2 March 2026 event is not the signing or conclusion of the CEPA itself — only of the Terms of Reference that launch and structure the negotiations. It is not a Cabinet approval, a ratified treaty, or an interim/early-harvest deal. CEPA should not be confused with a bare FTA (which focuses chiefly on tariff cuts on goods) — a CEPA is "comprehensive" because it also covers services, investment and allied policy chapters. It is likewise distinct from a BIT (a stand-alone investment-protection treaty) and from CECA, even though CECA and CEPA are near-synonyms in India's practice.
The comparative set — India's "comprehensive" trade pacts (carry the full family): India–Korea CEPA (2010) · India–Japan CEPA (2011) · India–Malaysia CECA (2011) · India–ASEAN CECA · India–UAE CEPA (2022) · India–Australia ECTA (2022, interim) · India–EFTA TEPA (2024) · India–UK FTA (concluded 2025) · and now the India–Canada CEPA under negotiation. Distinguish these from the larger plurilateral blocs India is not a member of — notably RCEP, which India opted out of in 2019.
Why it matters
The signing matters first as a diplomatic recovery. India–Canada relations had soured badly through 2023–2024, and economic engagement was among the first casualties when the earlier trade talks were paused. Re-launching negotiations is a concrete signal that both governments want to compartmentalise commerce from the political friction and rebuild the relationship on an economic footing.
It matters, second, for the economic gap it targets. At USD 8.66 billion in FY 2024-25, bilateral trade is strikingly thin for two G20 economies — Canada is a US$2.34 trillion (PPP) market of 41.65 million people, yet it accounts for a tiny share of India's total trade. The complementarity is real: India needs Canadian pulses, potash/fertilizer and coal, while Canada is a natural buyer of Indian pharmaceuticals, engineering goods and IT-enabled services. A CEPA that cuts tariffs and eases services and mobility rules is the instrument designed to convert that latent complementarity into the US$50 billion-by-2030 goal.
Third, it matters as part of India's wider trade-diversification strategy. In an era of shifting supply chains and geopolitical uncertainty in established markets, deepening preferential access to a resource-rich, services-hungry economy like Canada strengthens India's external resilience. The large Indian student and diaspora presence — over 425,000 students — adds a services and mobility dimension that a comprehensive agreement is well placed to formalise, from professional-services recognition to easier movement of skilled workers.