India-Canada Fast-Track CEPA Negotiations; Set US$50 Billion Trade Target by 2030

India has held a series of high-level engagements in Toronto, between May 26 and 27, 2026, aimed at strengthening economic cooperation, accelerating investment flows, and advancing negotiations for the proposed India–Canada Comprehensive Economic Partnership Agreement (CEPA).

The Union Minister’s visit forms part of a broader initiative to revive bilateral commercial relations, with India leading its largest-ever business delegation to Canada, comprising representatives from more than 100 Indian companies.

India-Canada target US$50 billion trade by 2030

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India and Canada have reiterated their objective to strengthen bilateral economic ties and expand two-way trade to US$50 billion by 2030. This also includes the aim to conclude negotiations for the proposed CEPA by the end of 2026.

At the latest round of bilateral engagements, the central government highlighted growing opportunities for collaboration across strategic sectors such as advanced manufacturing, biotechnology, clean technology, energy, semiconductors, and digital infrastructure. The visit also marked India’s largest-ever industry delegation to Canada, reflecting renewed efforts to deepen commercial and investment cooperation between the two countries.

At present, merchandise trade between India and Canada stands at approximately US$7.96 billion. India’s exports to Canada have continued to grow steadily over the past three years, while imports from Canada declined significantly in FY 2025-26.

Source: Tradestat, Department of Commerce, Union Ministry of Commerce & Industry

Meanwhile, the Canadian government has announced a proposed “Team Canada” trade mission to India later in 2026. This is intended to encourage Canadian businesses to explore partnership and investment opportunities in high-growth sectors, including artificial intelligence, critical minerals, renewable energy, nuclear energy, clean technology, and advanced manufacturing.

Canada signals expanding investment interest across India’s strategic sectors

The latest economic engagements also indicate renewed momentum in bilateral investment cooperation, particularly across infrastructure, technology, manufacturing, and energy-related sectors.

At the Canada-India Investment Roundtable attended by senior government officials, financial institutions, and major Canadian pension funds, discussions focused on India’s ongoing infrastructure development, financial sector liberalization, and continued regulatory reforms aimed at improving the ease of doing business. These structural developments continue to position India as an increasingly attractive long-term investment destination for global institutional investors.

During the discussions, India encouraged Canadian investors to expand their presence across priority sectors, including:

1. Clean energy
2. Digital infrastructure
3. AI
4. Advanced manufacturing
5. Supply chain diversification
6. Financial market collaboration

Separate bilateral meetings were also held with leading Canadian companies and institutional investors operating in sectors such as insurance, banking, food processing, and critical minerals processing.

The discussions emphasized several factors driving foreign investor interest in India, including:

• India’s strong macroeconomic growth trajectory;
• recent trade and industrial policy reforms;
• Production Linked Incentive (PLI) schemes supporting strategic manufacturing investments;
• availability of highly skilled STEM talent;
• rapid expansion of Global Capability Centres (GCCs); and
• an evolving regulatory environment supporting long-term foreign investment and industrial growth.

Canada currently ranks as India’s 16th largest foreign direct investment (FDI) source country. Cumulative Canadian FDI inflows into India reached approximately US$4.33 billion between January 2000 and December 2025, reflecting steady investor interest across multiple sectors.

India–Canada CEPA negotiations gain fresh momentum

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India and Canada are advancing negotiations on the proposed CEPA in 2026, which will establish a broad-based trade and investment framework covering trade in goods and services, investment facilitation, regulatory cooperation, intellectual property, professional mobility, and supply chain partnerships.

Both countries aim to conclude negotiations by the end of 2026 as part of broader efforts to significantly expand bilateral trade and strengthen long-term economic cooperation.

The renewed momentum follows the signing of the Terms of Reference (ToR) in March 2026, through which India and Canada formally restarted CEPA negotiations and established the framework and roadmap for future discussions. In March 2026, officials from both countries concluded the second round of negotiations in New Delhi and discussed several chapters, including trade in goods and services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and intellectual property rights.

In addition to tariff liberalization and improved market access, both countries are using the CEPA negotiations to advance broader strategic and economic priorities. Key sectors under discussion include critical minerals, clean energy, digital infrastructure, semiconductors, artificial intelligence, advanced manufacturing, and resilient supply chains.

Both governments have identified critical minerals cooperation as a major area of focus. This is given Canada’s substantial resource base and India’s rising demand for lithium, cobalt, uranium, and rare earth elements required for clean energy transition initiatives and advanced manufacturing industries.

India-Canada CEPA 2026: Top strategic sectors to monitor

The renewed momentum in India–Canada economic relations and the ongoing CEPA negotiations are expected to create medium- to long-term commercial opportunities across several strategic sectors. Businesses evaluating India market entry, supply chain diversification, technology partnerships, or long-term capital deployment should closely monitor the following areas:

1. Critical minerals and integrated supply chains

Critical minerals cooperation is likely to become a cornerstone of the India–Canada economic partnership. Canada’s reserves of lithium, cobalt, uranium, nickel, and rare earth elements complement India’s expanding manufacturing ambitions in electric vehicles, batteries, semiconductors, and clean energy technologies.

Businesses should monitor opportunities across:

1. Mineral sourcing and processing partnerships
2. Battery and energy storage manufacturing
3. Ev ecosystem development
4. Downstream industrial processing
5. Long-term supply chain agreements

Companies operating in advanced manufacturing and energy transition sectors may also benefit from India’s production-linked incentives, localization policies, and infrastructure expansion initiatives.

2. Clean energy, energy transition, and infrastructure investment

India’s energy transition agenda continues to generate increased demand for long-term institutional capital, technology transfer, and infrastructure partnerships. Canadian pension funds, infrastructure investors, and clean technology firms are expected to expand participation across renewable energy and sustainable infrastructure projects.

Key opportunity areas include renewable energy generation and storage, green hydrogen, smart grid and transmission infrastructure, nuclear energy cooperation, carbon reduction technologies, and climate-focused infrastructure financing.

Investors should also monitor evolving regulatory frameworks governing energy transition financing, carbon markets, and public-private infrastructure partnerships.

3. AI, digital infrastructure, and technology services

Digital economy cooperation is emerging as a major pillar of bilateral engagement. India’s expanding digital infrastructure ecosystem, large STEM workforce, and rapidly growing Global Capability Centre (GCC) landscape continue to attract multinational technology and innovation-driven businesses.

Commercial opportunities are likely to expand across:

1. AI deployment
2. Semiconductor and electronics ecosystems
3. Cloud infrastructure and data centers
4. Fintech and digital financial services
5. Cybersecurity
6. Research and development and engineering support operations

For Canadian companies, India increasingly represents both a technology talent base and a scalable operational hub supporting global business functions.

4. Advanced manufacturing and supply chain diversification

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The India-Canada CEPA discussions in 2026 align with broader global efforts to diversify manufacturing and supply chains beyond concentrated sourcing markets.

Businesses should assess opportunities in:

1. Electronics and semiconductor manufacturing
2. Automotive and electric mobility
3. Aerospace and industrial engineering
4. Industrial machinery and components
5. Integrated logistics and warehousing infrastructure

Companies seeking Indo-Pacific supply chain diversification may view India as a long-term manufacturing and export platform under an evolving CEPA framework.

5. Financial services and long-term institutional capital

The latest bilateral engagements indicate continued interest from Canadian pension funds, institutional investors, and financial services firms in India’s infrastructure, logistics, renewable energy, and private markets sectors.

As India continues implementing financial sector reforms and expanding infrastructure spending, institutional investors may increasingly position India as a core long-term allocation market within Asia.

Entering or expanding in India requires careful assessment of market conditions, regulatory frameworks, and sector competitiveness. Business intelligence insights help companies evaluate opportunities, benchmark competitors, and align investment strategies with India’s evolving economic landscape.

Koushan Das

Manager

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