India-Canada Trade Talks: CEPA Target 2026, BIT Negotiations to Begin
India and Canada held their inaugural Economic and Financial Dialogue in Toronto, led by the Finance Minister and Canada's Minister of Finance
Both sides set a target of concluding negotiations on a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026
India and Canada agreed to initiate talks on a Bilateral Investment Treaty (BIT) at the earliest opportunity
The dialogue built on commitments made during a bilateral meeting between the two heads of government in New Delhi in March 2026
Discussions covered cross-border remittances, expanding UPI usage in Canada, critical minerals supply chains, capital markets cooperation, and financial crime prevention
Both countries set a goal of expanding bilateral trade to CAD 70 billion (approximately Rs 4.65 lakh crore) by 2030
The next Economic and Financial Dialogue is scheduled for 2027
CEPA vs FTA vs BIT: Distinguishing Trade and Investment Instruments
A Free Trade Agreement (FTA) primarily reduces or eliminates tariffs on trade in goods between countries. A Comprehensive Economic Partnership Agreement (CEPA) goes further, covering goods, services, investment, intellectual property, and regulatory cooperation in a single integrated framework — representing a deeper level of economic integration than a standard FTA. A Bilateral Investment Treaty (BIT), by contrast, is narrowly focused: it is a legally binding agreement between two states to promote and protect private investments in each other's territory, and does not cover trade in goods or services at all.
Key Details
- India has concluded CEPAs with the UAE (2022) and Australia (Economic Cooperation and Trade Agreement, 2022, later upgraded toward a full CEPA)
- India's existing CEPAs include Japan (2011), South Korea (2010, as CEPA), and Singapore (2005, as CECA)
- BITs are administered separately from trade pacts by India's Department of Economic Affairs, Ministry of Finance
- India terminated most of its older-generation BITs around 2016-17 after adverse arbitration awards, replacing them with a new Model BIT
India and Canada are pursuing both instruments in parallel but sequentially — a CEPA to govern trade in goods, services, and broader economic cooperation, and a separate BIT to specifically protect bilateral investment flows once trade talks conclude.
India's 2016 Model Bilateral Investment Treaty
India adopted a new Model BIT in 2016 after facing a wave of investor-state arbitration claims under its earlier-generation treaties (notably the White Industries case). The Model BIT reflects a shift toward protecting India's sovereign regulatory space while still offering investment protection.
Any future India-Canada BIT will likely be negotiated on this 2016 Model BIT template, meaning strong local-remedies and dispute-settlement safeguards rather than an open-ended investor-protection regime.
UPI's Cross-Border Expansion
The Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI), has been extended to multiple countries for merchant payments and remittances as part of India's digital public infrastructure diplomacy.
Key Details
- UPI is live for cross-border acceptance and/or remittances in around a dozen countries including UAE, Singapore, France, Mauritius, Bhutan, Nepal, Sri Lanka, and Qatar
- France (2024) was the first European country to accept UPI, through a partnership with a French payment aggregator
- UAE's UPI rollout (2022) was enabled through a Mashreq Bank subsidiary, covering tens of thousands of merchant locations
- NPCI International Payments Limited (NIPL) is the NPCI arm that negotiates and implements these overseas UPI tie-ups
The India-Canada dialogue explicitly discussed expanding UPI usage in Canada through local payment service providers, extending this digital-payments diplomacy to North America for the first time.
- Target for concluding India-Canada CEPA negotiations: end of 2026
- Target bilateral trade level: CAD 70 billion (~Rs 4.65 lakh crore) by 2030
- Inaugural Economic and Financial Dialogue held: Toronto, August 28, 2026
- Preceding bilateral summit: New Delhi, March 2026
- Next Economic and Financial Dialogue scheduled: 2027
- India's existing CEPA partners include UAE (2022), Japan (2011), South Korea (2010), Singapore (2005)