After years of diplomatic frost, India and Canada are suddenly moving fast on the economic front. A Comprehensive Economic Partnership Agreement (CEPA) between the two countries — first talked about in various forms for over a decade, formally launched this March — has entered what both governments describe as a crucial phase. Negotiators completed a fifth round of talks in Ottawa in early October, Canada's trade minister is leading a nearly 300-strong business delegation to India this week, and both sides are openly aiming to conclude a deal by the end of the year, possibly sealed by a visit from Prime Minister Narendra Modi to Canada in December. For two economies looking to hedge against an uncertain world, the coming weeks could be decisive.

Background: a relationship thawing after years of strain

To understand why this moment matters, it helps to recall where the relationship was not long ago. In 2023, the killing of Hardeep Singh Nijjar in Canada, and allegations by the then Canadian government of Indian involvement — which New Delhi firmly denied — sent bilateral ties into a deep freeze. Diplomatic channels narrowed, negotiations that had been inching forward were paused, and trade discussions stalled along with everything else.

The thaw gathered pace through 2025 and 2026. Prime Minister Narendra Modi held talks with Canadian Prime Minister Mark Carney on the margins of the G7 summit in Kananaskis in June 2025, and CEPA negotiations were formally launched in March 2026 after being paused in 2023 and formally resumed late in 2025. Four rounds of negotiations have since been completed — the most recent concluding in New Delhi on September 18 — with commerce ministers Piyush Goyal and Maninder Sidhu reviewing progress on the sidelines of the G20 Trade Ministers' Meeting in Milwaukee in early October.

The strategic logic driving both sides is straightforward. Carney has made trade diversification a central priority for Canada, seeking to reduce the country's heavy dependence on the United States market and to double exports to non-US markets over the next decade. India, with one of the world's fastest-growing major economies and an expanding appetite for energy, resources, and technology, is an obvious target. For New Delhi, a trade pact with a resource-rich G7 economy offers expanded export markets, investment inflows, and secure supplies of energy and critical minerals — materials essential to India's ambitions in electric vehicles, batteries, electronics, and renewable energy. Canada's recent minerals diplomacy extends beyond India, as our explainer on Canada's critical minerals pact with Australia shows.

What happened: a busy week for the talks

The fifth round of CEPA negotiations ran from October 5 to 9 in Ottawa, hosted by Global Affairs Canada. Officials from both sides worked to narrow outstanding differences across goods, services, and investment, with the shared objective — stated repeatedly by both governments — of concluding negotiations before the end of 2026. The round followed the October 3 meeting between Goyal and Sidhu in Milwaukee, where Sidhu emphasised the importance of working toward a mutually beneficial agreement by year's end.

Almost immediately after the Ottawa round, the commercial push began in earnest. Canadian International Trade Minister Maninder Sidhu is leading a Team Canada Trade Mission to India from October 12 to 17, bringing nearly 300 delegates from Canadian businesses across sectors including aerospace and space, clean technology, energy transition, information and communications technology, life sciences, and agri-food. The delegation, bound for Mumbai and Bengaluru, is Canada's largest trade mission to India in more than 30 years — a deliberate signal that Ottawa is serious about the commercial relationship, not just the diplomatic paperwork.

The mission is designed to connect Canadian businesses directly with Indian decision-makers and potential partners. As Sidhu put it before travelling, matching Canadian expertise in sectors like aerospace, agri-food, and clean technology with India's growing demand will diversify trade and attract new investment. The business engagement is expected to run in parallel with the government-to-government negotiation track, creating momentum on both fronts.

Adding political urgency to the timetable is the prospect of a Modi visit to Canada in December. Carney has said publicly that the Indian prime minister is expected around that time, and both governments appear to be working toward having something substantial — if not a signed agreement, then at least a concluded negotiation — to show for it. Year-end deadlines in trade talks are often aspirational, but they do concentrate minds: negotiators on both sides know that without a political moment to anchor the talks, unresolved differences tend to drift.

Why it matters

The numbers explain why both capitals are investing so much effort. India and Canada traded goods and services worth CAD 30.4 billion in 2025 — more than $30 billion in total — and both governments have set an ambitious target of $70 billion in annual bilateral trade by 2030, doubling the current figure within five years. Whether that target is realistic will depend heavily on what the CEPA actually delivers.

A CEPA is a form of free trade agreement in which two countries significantly reduce or eliminate customs duties on the maximum number of goods traded between them, while also easing norms for investment and for the movement of skilled professionals. For Indian exporters, the prize is better access to the Canadian market for pharmaceuticals, engineering goods, textiles, information technology, and professional services — sectors where India is already competitive. Lower tariffs, clearer trade rules, and reduced regulatory barriers could expand market access for Indian manufacturers and exporters in ways that bilateral deals with other partners have demonstrated.

For Canada, the agreement would open a vast and growing market for its resources and expertise: energy, critical minerals, agriculture, aerospace, and clean technology. Merchandise trade between the two countries remains uneven — Canada exported goods worth CAD 3.9 billion to India in 2025 while importing CAD 9.7 billion worth, with the gap filled partly by India's service exports, including CAD 15.2 billion in Canadian service exports going the other way depending on the measure used. A successful CEPA would give Canadian firms more predictable access to one of the world's largest consumer and infrastructure markets.

Investment is another foundation. Canadian pension funds and asset managers had exposure to India worth about CAD 108 billion in 2025, including portfolio holdings, direct investments, and other vehicles — a reminder that Canadian capital is already deeply invested in India's growth story, and that a trade agreement would give that exposure a more stable institutional framework. The parallel boom in Canadian investment infrastructure, from data centres to clean tech, underlines how seriously Ottawa is taking the Indo-Pacific economic pivot.

Key facts at a glance

  • The fifth round of India–Canada CEPA negotiations ran October 5–9, 2026, in Ottawa, following a fourth round in New Delhi that concluded September 18; CEPA talks were formally launched in March 2026.
  • Both governments aim to conclude the agreement by the end of 2026, with a possible visit by Prime Minister Narendra Modi to Canada in December adding political urgency.
  • Canada's International Trade Minister Maninder Sidhu is leading a Team Canada Trade Mission to India from October 12 to 17, with nearly 300 business delegates — Canada's largest trade delegation to India in more than 30 years.
  • Two-way goods and services trade was worth CAD 30.4 billion in 2025, with a shared target of $70 billion annually by 2030.
  • Priority sectors include energy, critical minerals, aerospace, artificial intelligence, clean technology, agri-food, life sciences, and information and communications technology.
  • India's exports to Canada include precious stones and metals, machinery, and pharmaceuticals; Canada supplies India with vegetables, mineral fuels and oils, and wood pulp.
  • Canadian pension funds and asset managers held about CAD 108 billion in India exposure in 2025.
  • The talks follow a diplomatic thaw after the 2023 Nijjar killing froze ties; Modi and Carney met at the G7 in Kananaskis in June 2025.

What happens next

The coming weeks will test whether the year-end target is realistic. The October 12–17 trade mission is the immediate focus: if Canadian businesses return home with signed partnerships and a clear sense of Indian demand, it will strengthen the political case for compromise on both sides. But trade missions do not negotiate tariff schedules, and the hard bargaining over market access — particularly in sensitive areas — will continue between the chief negotiators.

India will be looking for tangible gains for its exporters and service providers while protecting sensitive sectors from disproportionate competitive pressure. Agriculture, regulatory requirements, and market access remain important considerations, and Indian negotiators have historically been cautious about opening domestic markets too quickly. Services and professional mobility are especially important to New Delhi, which will seek better opportunities for Indian service providers and greater certainty over the conditions under which Indian professionals and companies can operate in Canada.

Canada, for its part, must balance its commercial ambitions with its own domestic sensitivities, and with the broader politics of the relationship — where security and law-enforcement issues from the 2023 crisis still form part of the conversation between the two governments, even as the economic track races ahead.

If the talks hold their momentum, the December Modi visit could be the moment a deal is announced or signed — a symbolic capstone to one of the fastest diplomatic turnarounds in recent memory. But as with any negotiation, the final agreement will depend on whether both sides can resolve outstanding differences and secure commercially meaningful gains. The trade mission and the diplomatic engagement are promising signs; they are not guarantees. The weeks between now and December will show whether the crucial phase ends in a handshake or in another extension.

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