India and Canada have formally launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA) in New Delhi and agreed to finalise the agreement at the earliest. The Terms of Reference (ToR) for the India–Canada CEPA were signed during the visit of Canadian Prime Minister Mark Carney to India. Both countries have set a target to increase bilateral trade to USD 50 billion by 2030.
Background
The negotiations follow the leaders’ statement made during their bilateral meeting on the sidelines of the G7 Summit held in Kananaskis, Canada in October 2025. Subsequently, both countries worked towards finalising the ToR to guide CEPA negotiations.
CEPA Terms of Reference (ToR)
The ToR will:
- Define the format, frequency and approach for negotiations.
- Provide a structured framework to conclude an ambitious, balanced and mutually beneficial CEPA.
- Cover negotiations in:
- Trade in goods
- Trade in services
- Other mutually agreed policy areas
Trade and Economic Context
India-Canada Bilateral Trade (FY 2024–25)
- Canada represents a market of 41.65 million people (2025) and US$ 2.34 trillion in terms of GDP at PPP.
- India–Canada CEPA holds significant potential to unlock and expand bilateral trade which stood at USD 8.66 billion) in FY 2024-25 (Exports: USD 4.22 billion; Imports: USD 4.44 billion
- For India, Canada represents a significant developed market with strong purchasing power and trade potential.
Major Trade Composition
- India’s Key Exports to Canada: Drugs & pharmaceuticals, iron & steel, seafood, cotton garments, electronic goods and chemicals among others.
- Key imports of India from Canada: Pulses, pearls & semiprecious stones, coal, fertilizer, paper and petroleum crude.
- Key sectors of India’s services exports to Canada: Telecommunications, computer and information services, and other business services. These sectors hold significant future growth potential and are expected to expand further following the conclusion of the CEPA.
- Indian Diaspora: Canada is also home to over 425,000 Indian students and a strong Indian community.