Other BriefingsIndia-Canada CEPA 2026: Modi-Carney Sign Terms of Reference, Target US$50 Billion Trade by 2030
After an extended period of diplomatic strain, 2026 marks a decisive opportunity for India and Canada to recalibrate their bilateral relationship. On March 2, 2026, Prime Minister Narendra Modi and Prime Minister Mark Carney announced the Terms of Reference (ToR) for the proposed Comprehensive Economic Partnership Agreement (CEPA), signaling a structured effort to restore and strengthen economic engagement.
The latest India-Canada diplomatic engagement reflects a mutual recognition that bilateral trade and investment ties require renewed institutional momentum. Following more than three years of diplomatic friction, both countries have moved to formalize a roadmap toward a comprehensive trade agreement aimed at delivering balanced and mutually beneficial outcomes.
During the March 2, 2026, engagements in New Delhi, the two sides signed multiple agreements and unveiled initiatives designed to deepen economic cooperation across priority sectors. Carney’s first official visit to India underscored Ottawa’s intent to reset the relationship and re-anchor it in pragmatic, forward-looking economic collaboration.
India-Canada bilateral relations rest in 2026
India and Canada have taken concrete steps to reset bilateral relations, with the prime ministers of both countries launching a renewed phase of economic engagement, trade negotiations, and multi-sectoral cooperation.
Modi meets Carney at Hyderabad House, in New Delhi, on March 02, 2026. Image source: PIB
Signing ToR for India-Canada CEPA
On March 2, 2026, India and Canada formally launched CEPA negotiations in New Delhi. India’s Minister of Commerce and Industry, Piyush Goyal, and Canada’s Minister of International Trade, Maninder Sidhu, signed the ToR at Hyderabad House in the presence of both prime ministers.
The ToR sets out the negotiation structure, modalities, and roadmap, enabling both sides to pursue a comprehensive and commercially balanced agreement.
Reconstitution of the India-Canada CEO Forum
Both governments agreed to reconstitute the India-Canada CEO Forum and position it as a central platform for private-sector dialogue. Through this forum, they aim to facilitate structured discussions on investment flows, regulatory coordination, and sectoral collaboration.
What is covered under the India-Canada ToR for CEPA?
The ToR does not constitute the CEPA itself. Instead, it establishes the scope, structure, and negotiating framework for the proposed CEPA. They set out the format, frequency, and approach to the negotiations, providing a procedural roadmap to conclude an ambitious, balanced, and mutually beneficial pact.
Core areas of negotiation
1. Trade in goods: The CEPA negotiations will cover market access for goods, including tariff reduction or elimination. Discussions are expected to address rules of origin, customs procedures, and trade facilitation measures. Given the existing trade profile, i.e., India’s exports to Canada, including pharmaceuticals, iron and steel, textiles, electronics, and chemicals, and imports, such as pulses, coal, fertilizers, and crude oil, tariff rationalization will be a central component.
2. Trade in services: Services form a strategically important pillar of the negotiations. The agreement is expected to address cross-border supply of services, mobility of professionals, and regulatory cooperation. Key areas of interest include telecommunications, computer and information services, and other business services, where India has strong export capabilities.
3. Other mutually agreed policy areas: The ToR also provide flexibility to negotiate additional policy domains as mutually agreed. In modern comprehensive trade agreements, these often include investment facilitation, digital trade, intellectual property (IP) rights, government procurement, technical standards, sanitary and phytosanitary measures, and dispute settlement mechanisms. The final scope in these areas will depend on the progress and outcomes of negotiations.
Strategic objectives
Modi and Carney reaffirmed their shared goal of expanding bilateral trade to US$50 billion by 2030. Under FY 2025-26 (April to January), trade activities between Canada and India reached up to US$6.48 billion.
|
India’s Trade Relations with Canada Over the Years (Value in US$ Million) |
|||
|
Year |
Exports to Canada |
Imports from Canada |
Total trade |
|
*FY 2025-26 |
3,777.33 |
2,712.56 |
6,489.88 |
|
FY 2024-25 |
4,222.27 |
4,447.13 |
8,669.40 |
|
FY 2023-24 |
3,845.29 |
4,553.24 |
8,398.53 |
|
FY 2022-23 |
4,109.74 |
4,167.56 |
8,227.30 |
|
FY 2021-22 |
3,763.98 |
3,132.78 |
6,896.76 |
Source: Department of Commerce, Ministry of Commerce and Industry, GoI.
*Trade figures for FY 2025-26 are available from April 1, 2025, to January 31, 2026. The data for this period is provisional and subject to revision and update after March 31, 2026.
The CEPA is a key instrument to unlock untapped trade potential, improve regulatory predictability, and deepen sectoral cooperation.
Advancing technology, innovation, and education
Trilateral technology cooperation
The two countries have finalized the trilateral memorandum of understanding (MoU) under the Australia-Canada-India Technology and Innovation (ACITI) Partnership. Through this framework, the three countries will strengthen collaboration in emerging and critical technologies.
India-Canada academic collaboration
The All India Council for Technical Education (AICTE) and Mitacs, a Canadian research organization, signed an MoU to expand the Globalink Research Internship program. Starting in 2027, the program will enable up to 300 eligible Indian students each year to undertake fully funded 12-week research internships at Canadian institutions.
In parallel, universities from both countries signed 24 institutional MoUs covering artificial intelligence (AI), healthcare, agriculture, and innovation.
India-Canada energy and critical resources agreement
Commercial contract on uranium supply
India’s Department of Atomic Energy concluded a long-term commercial contract with Canadian uranium giant Cameco for the supply of uranium ore concentrates. The agreement supports the expansion of India’s nuclear energy program and aligns with its long-term objective of achieving 100 GW of nuclear power capacity by 2047.
MoU on critical minerals cooperation
India and Canada have agreed to collaborate on building secure and resilient critical mineral supply chains. The MoU promotes investment facilitation, project identification, and technical cooperation across exploration, mining, beneficiation, and processing of strategic minerals.
MoU on renewable energy cooperation
An agreement was signed to promote bilateral cooperation in renewable energy, including solar, wind, biomass, and energy storage technologies. The framework supports information exchange, capacity building, and sharing of best practices.
Conclusion
Through the 2026 visit and the launch of CEPA negotiations, India and Canada have actively reset their bilateral engagement. By advancing trade liberalization, strengthening institutional mechanisms, and expanding cooperation in energy, technology, education, defense, and culture, both governments have laid the groundwork for a more structured and forward-looking partnership, anchored by the CEPA negotiations.
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