The India–Canada CEPA has potential to significantly deepen bilateral economic ties by leveraging complementarities across trade, energy, technology, and innovation. With a target to raise bilateral trade to $50bn by 2030, the agreement can drive investment, technology partnerships, economic resilience, and long-term strategic growth for both nations.

The economic relations between India and Canada are entering a new and promising phase. Both nations are demonstrating renewed commitment to building a stronger, more resilient, and future-oriented partnership. The proposed India–Canada Comprehensive Economic Partnership Agreement (CEPA) is expected to serve as a strategic framework to transform bilateral trade, investment, technology cooperation, and people-to-people ties. Both countries recently committed to concluding a balanced and mutually beneficial CEPA by the end of 2026, highlighting a shared understanding that India and Canada are not merely trading partners but natural economic complements capable of contributing significantly to each other’s growth and prosperity.

Rebuilding trust, renewing momentum

India and Canada share deep democratic values, multicultural societies, strong educational ties, and a vibrant Indian diaspora of more than two million people. The economic fundamentals of their bilateral relations have remained robust, providing a solid foundation for sustained engagement. The signing of the Terms of Reference for CEPA between the two nations and the successful completion of multiple rounds of negotiations demonstrate a clear commitment by both governments to translate political goodwill into tangible economic outcomes. Canadian Prime Minister Carney’s description of CEPA as a “game changer” underscores the agreement’s strategic importance, while the revised target to conclude negotiations by November 2026 underscores the seriousness and urgency with which both sides are approaching the process.

CEPA: More than just a trade agreement

The India–Canada CEPA is far more than a conventional trade pact. It is envisioned as a comprehensive framework covering trade in goods and services, investment facilitation, intellectual property, government procurement, regulatory cooperation, and emerging technologies. In an increasingly uncertain global environment marked by geopolitical tensions, supply chain disruptions, and rising protectionism, CEPA offers both countries an opportunity to strengthen economic resilience and diversify their strategic partnerships.

For India, the agreement promises enhanced access to one of the world’s most advanced economies, greater export opportunities, increased long-term capital inflows, and deeper integration into global value chains. For Canada, CEPA opens the door to one of the fastest-growing major economies, a rapidly expanding consumer market, and a global hub for innovation, manufacturing, and digital services. The agreement, therefore, represents not only an economic opportunity but also a strategic partnership that supports long-term growth and competitiveness.

Unlocking the potential of bilateral trade

Despite strong complementarities, bilateral trade between India and Canada remains well below its potential. India-Canada merchandise trade was estimated at $8bn in 2025-26, with India’s exports to Canada at $4.7bn and imports at $3.3bn.

Services trade between the two countries is around $19.7bn (2025), with a trade balance largely in Canada’s favour. Going ahead, both nations are poised to achieve $50bn in bilateral trade, including merchandise and services. The signing of CEPA between India and Canada is expected to significantly enhance bilateral trade. Recognising the untapped opportunities, both governments have set an ambitious target to increase bilateral trade to $50bn by 2030.

Achieving a higher trajectory in bilateral trade will require tariff reductions, improved market access, streamlined customs procedures, and stronger business-to-business engagement. India’s exports to Canada include pharmaceuticals, engineering goods, textiles, chemicals, information technology services, and processed foods. In turn, Canada exports agricultural commodities, fertilisers, minerals, energy products, wood products, and advanced industrial goods to India. These trade patterns are largely complementary rather than competitive, providing a strong foundation for sustained expansion and deeper economic integration.

Investment Partnerships: Fuelling long-term growth

One of CEPA’s most promising dimensions is investment cooperation. Canada is home to some of the world’s largest pension funds and institutional investors, many of which have already established a significant presence in India. Canadian investors have shown growing interest in sectors such as infrastructure, renewable energy, logistics, transportation, healthcare, financial services, real estate, and digital infrastructure. India’s rapidly expanding economy, improving business environment, and vast infrastructure needs make it an attractive destination for long-term capital.

Critical Minerals: Building strategic supply chains

Many sectors, beyond critical minerals, demonstrate the complementarity between India and Canada. As India advances its ambitions in electric vehicles, renewable energy, semiconductors, defence manufacturing, and advanced electronics, securing reliable access to critical minerals has become a strategic imperative. Canada has substantial reserves of lithium, cobalt, nickel, uranium, and rare earth elements, which are essential to modern industrial and technological development.

A comprehensive CEPA could facilitate long-term supply agreements, joint ventures, and investment partnerships across mineral extraction and processing. Such cooperation would strengthen supply-chain resilience, reduce dependence on concentrated sources of strategic resources, and support both countries’ industrial ambitions.

Innovation, technology and the knowledge economy

India and Canada are increasingly positioning themselves as innovation-driven economies, characterised by robust research ecosystems, vibrant startup communities, and globally recognised talent pools. This shared focus on innovation presents significant opportunities for collaboration across emerging technologies and knowledge-intensive industries.

The focus on artificial intelligence, quantum computing, deep technology, and startup collaboration reflects a shared vision for future growth. The proposed India–Canada Startup Bridge is particularly significant, as it aims to establish institutional mechanisms to enable innovation partnerships, technology transfer, and entrepreneurial collaboration.

India’s strengths in software development, digital public infrastructure, and technology services complement Canada’s expertise in advanced research, artificial intelligence, clean technologies, and innovation financing. Together, the two countries can build innovation corridors that drive technological advancement, create jobs, and enhance global competitiveness.

Strengthening food security and agricultural cooperation

Agriculture remains a key pillar of the India–Canada economic relationship. Canada is a major supplier of pulses, potash, and agricultural inputs, which significantly bolster India’s food security and agricultural productivity. At the same time, India has developed considerable strengths in food processing, agricultural innovation, and value-added agricultural exports. Enhanced cooperation in agri-technology, sustainable farming practices, food processing, and supply-chain management can yield substantial benefits for producers and consumers in both countries. Such collaboration can boost farm productivity, strengthen food security, and support rural livelihoods.

People-to-People Ties: The human capital advantage

One of the greatest strengths of the India–Canada relations is its people-to-people ties. Canada remains a preferred destination for Indian students, professionals, entrepreneurs, and skilled workers, while the large Indian diaspora serves as a powerful bridge linking businesses, institutions, and communities across both nations.

Human capital mobility directly contributes to innovation, trade, investment, and cultural understanding. It also plays a crucial role in strengthening the services sector, which is expected to be a major component of CEPA. Facilitating smoother mobility pathways, streamlining visa processes, supporting professional recognition arrangements, and expanding educational partnerships can significantly deepen economic integration.

From Potential to Performance: The road ahead

The India–Canada CEPA’s significance extends far beyond trade figures and investment flows. It embodies a broader vision of cooperation between two democratic, multicultural, and innovation-driven economies seeking sustainable growth in an increasingly uncertain world. Canada offers India access to capital, technology, critical minerals, educational excellence, and advanced industrial capabilities. In turn, India offers Canada scale, growth, talent, innovation, and one of the world’s most dynamic consumer markets.

In a nutshell, CEPA has the potential to become one of the most consequential economic agreements for both nations in the coming decade, transforming India–Canada relations from a partnership of potential to one of performance. In an era marked by geopolitical uncertainty and economic fragmentation, India and Canada have a unique opportunity to demonstrate how cooperation, openness, and mutual trust can foster shared prosperity.