In a major diplomatic development signalling a reset in bilateral relations, India and Canada have agreed to restart negotiations on a high-ambition Comprehensive Economic Partnership Agreement (CEPA). The announcement came after a meeting between Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney on the sidelines of the G20 Leaders’ Summit in Johannesburg on Sunday, marking a turning point after years of tension and frozen engagement.
According to India’s Ministry of External Affairs (MEA), both nations committed to working toward an expansive trade pact aimed at doubling bilateral trade to USD 50 billion by 2030. The renewed talks will cover goods and services, investment frameworks, agricultural cooperation, labour mobility, digital trade, and sustainable development — including collaboration in artificial intelligence and advanced technology ecosystems. The reset also revives longstanding civil nuclear engagement and discussions on long-term uranium supply arrangements, which both sides described as a shared strategic priority.
A Diplomatic Reset After Years of Friction
Relations between New Delhi and Ottawa have been strained for several years, with India repeatedly expressing concern over Khalistani extremist elements operating from Canadian territory. The situation escalated sharply in 2023 when former Canadian Prime Minister Justin Trudeau publicly accused India of involvement in the killing of a Canadian citizen linked to separatist activity — allegations India rejected as unfounded and politically motivated. The fallout led to the withdrawal of diplomats, a freeze in trade negotiations, and a near-total breakdown in engagement.
The shift in tone began only recently, after sustained dialogue facilitated by External Affairs Minister S. Jaishankar and Canadian Foreign Minister Anita Anand. Multiple meetings over the past year helped rebuild trust, leading to the October 2025 announcement that High Commissioners would return to both capitals, restoring full diplomatic presence. Analysts say the Johannesburg meeting reflects the first tangible outcome of that gradual thaw.
The CEPA Timeline: From Momentum to Suspension and Back
Negotiations on CEPA were first launched in 2010, with renewed traction in 2022 amid growing cooperation in pharmaceuticals, renewable energy, rare earth minerals, mining, urban infrastructure and tourism. But in 2023, the process abruptly halted when Canada unilaterally paused discussions in the wake of political tensions.
With trade ambitions now revived, industry experts say the timing reflects both nations’ strategic recalculations:
✅ For India:
- diversification of trade partners amid global realignments
- access to advanced tech and energy systems
- greater leverage in North American markets
✅ For Canada:
- growing need to re-engage with the Global South
- search for reliable partners beyond Western alliances
- positioning in emerging-tech supply chains
Carney Signals Strategic Pivot
Speaking earlier on Sunday, Canadian PM Mark Carney said Canada was “reengaging pragmatically with global giants India and China.” He highlighted a new trilateral pact announced a day prior — the Australia-Canada-India Technology and Innovation (ACTI) Partnership — focusing on clean energy, critical minerals and artificial intelligence. Carney said the partnership would “unlock more opportunities for Canadian workers and businesses,” underscoring a broader recalibration of Canada’s foreign-economic strategy.
The trilateral cooperation aligns with India’s own technology-leadership priorities, including supply-chain diversification, semiconductor collaboration and energy transition frameworks.
Strategic, Economic and Security Stakes
Diplomatic observers note that the renewed CEPA talks represent more than trade — they symbolize a recalibration of geopolitical priorities for both nations. Key implications include:
🔹 Economic
- potential tariff reductions
- increased investment flows
- expanded market access for agriculture and services
🔹 Strategic
- revival of civil-nuclear frameworks
- stable uranium supply for India
- counterbalance to China-weighted supply chains
🔹 Security
- mechanism to address extremism concerns
- clearer diplomatic protocols
- reduced public friction
New Delhi has emphasised that movement toward CEPA must coincide with firm commitments from Canada regarding extremist activity on its soil — a condition analysts expect to remain central.
What Comes Next
The coming months will determine whether momentum translates into durable outcomes. Negotiation tracks are expected to include:
✅ tariff schedule frameworks
✅ digital standards and data governance
✅ mobility pathways for skilled professionals
✅ environmental and sustainability clauses
✅ dispute-resolution protocols
Business councils in both countries have welcomed the announcement, but caution that political stability and mutual trust will be essential for meaningful progress.
