India, Canada aim to conclude trade talks by 2026-end in bid to boost bilateral trade
India and Canada reaffirmed a commitment to conclude negotiations on a Canada-India Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026, at the inaugural India-Canada Economic and Financial Dialogue held in Toronto
The dialogue was led by India's Finance Minister and Canada's Minister of Finance and National Revenue, and covered cross-border remittances, merchant payments, and expansion of India's Unified Payments Interface (UPI) in Canada
Both sides set a target of expanding bilateral trade to CAD 70 billion (about ₹4.65 lakh crore) by 2030, and discussed cooperation on financial services, capital markets, critical minerals and supply-chain resilience, and institutional investment
India expressed readiness to begin negotiations on a Bilateral Investment Treaty (BIT) with Canada at the earliest opportunity
The next edition of the Economic and Financial Dialogue is scheduled for 2027
CEPA vs FTA vs BIT — Distinguishing Trade Instruments
A Comprehensive Economic Partnership Agreement (CEPA) is a broader, deeper trade instrument than a standard Free Trade Agreement (FTA): while an FTA mainly covers tariff elimination on goods, a CEPA typically also covers services, investment, intellectual property, government procurement, and regulatory cooperation. A Bilateral Investment Treaty (BIT), by contrast, deals specifically with the protection and promotion of cross-border investment (not trade in goods/services) and typically includes investor-state dispute settlement provisions.
Key Details
- India's most comparable recent precedent is the India-UAE CEPA (signed February 2022, in force May 2022) — India's first CEPA negotiated and concluded on a fast-track basis, eliminating tariffs on over 90% of tariff lines
- India-Canada CEPA negotiations were first launched around 2010, paused for several years amid unresolved issues (including agriculture market access and IP protection), and were relaunched following a diplomatic reset and a visit by Canada's Prime Minister to India (February-March 2026)
- India's Model BIT (2016) is deliberately narrower than older BITs — it requires exhaustion of local remedies before investor-state arbitration and excludes taxation measures and government procurement from its scope, reflecting India's post-White Industries arbitration-award caution
- Negotiations for the CEPA proceeded in structured rounds (first round around March 2026, second round in May 2026) ahead of the end-2026 target discussed in this dialogue
The Toronto dialogue reaffirms the CEPA timeline while separately floating BIT negotiations — underscoring that trade-in-goods/services liberalisation (CEPA) and investment protection (BIT) are pursued as two distinct legal tracks between India and Canada.
UPI's International Expansion as Economic Diplomacy
The discussion on expanding UPI (Unified Payments Interface) into Canada is part of India's broader strategy of exporting its Digital Public Infrastructure (DPI) stack as a tool of economic diplomacy and remittance-cost reduction.
Key Details
- UPI was launched by the National Payments Corporation of India (NPCI) in 2016 under the oversight of the RBI; NPCI International Payments Limited (NIPL) is the vehicle for overseas UPI partnerships
- UPI has already been linked or is live in several jurisdictions including Singapore (PayNow-UPI linkage), UAE, Sri Lanka, Mauritius, France (limited merchant acceptance), and others, mainly targeting remittance corridors and Indian-diaspora merchant payments
- Canada hosts one of the largest Indian diaspora populations globally, making cross-border remittances and merchant-payment linkages commercially significant for both governments
- Digital Public Infrastructure (DPI) — the UPI-Aadhaar-DigiLocker "India Stack" model — has also been highlighted in G20 (India's 2023 presidency) discussions as an exportable framework for other countries
UPI expansion talks with Canada extend this DPI-diplomacy pattern, linking payments infrastructure cooperation to the broader trade and investment relationship being discussed at the Economic and Financial Dialogue.
India-Canada Trade Profile and Critical Minerals Cooperation
Bilateral merchandise trade between India and Canada remains modest relative to the CAD 70 billion 2030 target, making the sectors identified in this dialogue — critical minerals, financial services, capital markets — central to closing that gap.
Key Details
- India-Canada bilateral trade stood at roughly USD 8.66 billion in FY 2024-25 (exports to Canada: ~USD 4.22 billion; imports from Canada: ~USD 4.44 billion), against the CAD 70 billion (2030) target — indicating the scale of expansion being targeted
- Canada holds significant reserves of critical minerals (lithium, cobalt, nickel, rare earths) relevant to India's clean-energy and EV battery manufacturing ambitions under the National Critical Mineral Mission (2024)
- India's Ministry of Mines has been signing critical-mineral cooperation arrangements with resource-rich partner countries (Australia, Argentina, and now discussions with Canada) to diversify supply chains away from China-dominated processing
- Institutional investment linkages are also significant: several large Canadian pension funds (e.g., CPPIB, CDPQ) are long-standing investors in Indian infrastructure, real estate, and equity markets
The Toronto dialogue's focus on critical minerals and institutional investment reflects the two economies' complementary profile — Canada as a resource and capital source, India as a manufacturing and market destination — which the CEPA and BIT tracks aim to formalise.
- Bilateral trade target: CAD 70 billion (~₹4.65 lakh crore) by 2030
- Current bilateral trade (FY 2024-25): ~USD 8.66 billion (exports ~USD 4.22 bn, imports ~USD 4.44 bn)
- CEPA negotiations relaunched following Canadian PM's visit to India, February-March 2026; target conclusion: end of 2026
- India-UAE CEPA (comparable precedent): signed February 2022, in force May 2022, over 90% tariff lines liberalised
- Inaugural India-Canada Economic and Financial Dialogue held in Toronto (2026); next edition scheduled for 2027
- UPI launched by NPCI in 2016 under RBI oversight; overseas expansion routed through NPCI International Payments Ltd (NIPL)