India and Canada have agreed to restart negotiations on a long-discussed free trade agreement, signaling a significant thaw in relations after years of diplomatic tension. The decision came after Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney met on the sidelines of the G20 summit in South Africa, where both leaders committed to launching talks on a “high-ambition” Comprehensive Economic Partnership Agreement.
According to India’s Ministry of External Affairs, the renewed dialogue aims to expand economic cooperation and boost trade flows between the two countries. As part of the meeting, Carney accepted an invitation to visit India early next year, a move expected to further strengthen diplomatic engagement.
New Delhi has set an ambitious goal of raising bilateral trade to $50 billion by 2030. Last year, exchange of goods and services between the two nations amounted to roughly C$31 billion (US$22 billion), according to Canadian government data. Canada is particularly interested in gaining more access to India’s rapidly expanding market, which Carney described as one of the world’s most dynamic.
Efforts to secure a trade pact have faltered in the past, most notably when relations deteriorated in 2023 after then-Prime Minister Justin Trudeau alleged involvement of Indian agents in the killing of a Sikh activist in British Columbia. While the case remains before Canadian courts, both countries have since taken steps to stabilize ties, including appointing new ambassadors earlier this year.
Indian officials have long voiced concerns over the presence of Sikh separatist groups in Canada, while Ottawa has sought assurances on security and judicial cooperation. Carney confirmed that law enforcement and national security agencies from both nations continue to engage in regular discussions.
For Canada, strengthening economic links with India is part of a broader strategy to diversify beyond the United States, which currently absorbs the vast majority of Canadian exports. Carney has pledged to double Canada’s non-US exports by 2035, making the revival of India–Canada trade talks a key component of that vision.
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