Canada and India Move to Restart Trade Talks After Two-Year Pause

Ottawa – Canada and India have agreed to resume negotiations on a long-pending trade agreement, marking a significant diplomatic shift after discussions were frozen for nearly two years.

The decision followed a bilateral meeting between Prime Minister Mark Carney and Indian Prime Minister Narendra Modi on the sidelines of the G20 Summit in Johannesburg.

The Indian government confirmed that both leaders supported relaunching work toward a Comprehensive Economic Partnership Agreement. The goal is to build a high-ambition pact designed to boost economic engagement between the two countries.

Officials said the updated agreement aims to double bilateral trade to USD 50 billion by 2030. Canada indicated similar ambitions, projecting that trade could rise to more than C$70 billion if negotiations succeed.

Carney emphasized that India’s growing economic influence makes it a strategic market for Canada. He noted that deeper ties could bring substantial opportunities for Canadian industries and workers.

The talks represent a thaw in relations following a period of diplomatic tension. Negotiations were put on hold in 2023 after allegations from Canada about the death of a Sikh separatist strained ties.

New Delhi rejected those accusations, and both sides gradually reopened lines of communication over the past year. Improved diplomatic contact began earlier in 2025 during a meeting between both leaders at the G7 Summit.

Despite political tensions, trade between the two nations continued to grow modestly. However, experts say the overall trade volume remains small relative to the scale of India’s economy.

Two-way trade reached approximately C$31 billion in 2024, with Canada benefiting heavily from its large services exports. By comparison, Canada’s trade with China remains almost four times larger.

Both countries reiterated their longstanding civil nuclear cooperation as part of the renewed dialogue. They highlighted ongoing work on potential long-term uranium supply agreements to support energy needs.

Carney has committed to diversifying Canada’s trade footprint beyond the United States, its largest trading partner. He has pledged to double non-U.S. exports over the next decade by opening new markets and modernizing trade frameworks.

The revival of talks with India fits into Canada’s broader economic outreach strategy. Carney said he wants to establish predictable trade rules that protect businesses and encourage investment on both sides.

He explained that the potential agreement would include dispute resolution mechanisms, clear guidelines, and updated commercial protections. Such measures, he said, would help foster long-term confidence among companies operating between the two markets.

India, for its part, is seeking to expand its own global trade partnerships as its economy continues to grow rapidly. Officials in New Delhi view the renewed talks as an opportunity to strengthen ties with a major G7 economy.

The discussions also occur amid growing global interest in India as a supply-chain and investment destination. Both governments appear aligned in wanting to seize this moment for economic expansion.

Earlier in the day, Carney described India as a dependable trading partner, while acknowledging occasional friction. He stressed that establishing a robust agreement would help manage challenges and support sustainable cooperation.

Beyond India, Carney also met with Brazilian President Luiz Inácio Lula da Silva during the G20 Summit. Both leaders agreed to accelerate negotiations between Canada and Mercosur, which includes Brazil, Argentina, Paraguay, and Uruguay.

Expanding trade with Mercosur forms another important pillar of Canada’s diversification efforts. Carney said that stronger ties with fast-growing markets would help position Canada competitively in a shifting global economy.

As Canada and India prepare to restart negotiations, officials on both sides are working on updated frameworks. Their aim is to launch formal rounds of talks soon, building on the renewed momentum from recent diplomatic outreach.