Canada and India are targeting an expansion of bilateral trade from approximately $30 billion to $70 billion over the next five years, aiming to finalize a Comprehensive Economic Partnership Agreement (CEPA) before the close of 2026. Speaking on the sidelines of the G20 Trade Ministers’ Meeting in Milwaukee, Wisconsin, on Thursday, October 1, 2026, Canadian International Trade Minister Maninder Sidhu confirmed that the two nations will convene in Ottawa on Monday, October 5, for the fifth formal round of negotiations, accelerating momentum following fourth-round technical discussions held in Mumbai.
The commercial roadmap establishes an ambitious economic normalization timeline between Ottawa and New Delhi following diplomatic strains that paused bilateral trade negotiations between mid-2023 and late 2025. Supported by a mutual commitment to conclude treaty text by December 2026, both governments are shifting their economic dialogue toward institutional supply chains, using clean energy transitions, critical mineral extraction, aerospace manufacturing, and services integration to anchor cross-border commerce through 2030.
Key Takeaways
- Targeting $70 Billion by 2030: Canada and India have committed to more than doubling two-way trade in goods and services from roughly $30.4 billion in 2025 to $70 billion annually over a five-year horizon.
- Fifth Round in Ottawa: Negotiators will meet in Ottawa on Monday, October 5, 2026, for Round 5 of the CEPA talks, building on technical terms reviewed during Round 4 in Mumbai.
- Firm 2026 Completion Deadline: Both governments have reaffirmed their commitment to conclude the formal CEPA treaty negotiations before the end of calendar year 2026.
- Critical Minerals & Energy Anchor: Commercial engagement is moving past traditional agrarian commodities (lentils, pulses, and wheat) into strategic industrial inputs, backed by a bilateral critical minerals memorandum and a $2.6 billion long-term uranium fuel supply agreement with Cameco.
- Services & Educational Mobility: The agreement seeks to protect and formalize two-way services trade—which stood at nearly $20 billion in 2025—addressing professional mobility, technology engineering transfers, and academic travel.
The Strategic Trajectory: From Diplomatic Pause to Institutional Engagement
The expansion toward a $70 billion trade target reflects a pragmatic separation of commercial diplomacy from broader geopolitical friction.
CEPA DIPLOMATIC TRAJECTORY
│
March 2022 – July 2023 Mid-2023 – Late 2025 March 2026 – October 2026
│ │ │
▼ ▼ ▼
Nine Initial Rounds on Negotiations Formally Terms of Reference Signed;
Early Progress Trade Paused Amid Severe Rounds 4 (Mumbai) & 5 (Ottawa)
Agreement (EPTA) Diplomatic Strains Target End-of-2026 Conclusion
Between March 2022 and July 2023, Ottawa and New Delhi conducted nine formal rounds of negotiations aimed at an Early Progress Trade Agreement (EPTA)—an interim harvest treaty covering select tariff lines ahead of a full CEPA. That process was suspended in late 2023 following diplomatic disputes over extraterritorial national security allegations and political disputes.
However, global supply chain volatility and economic realignments prompted both administrations to resume commercial dialogue in late 2025:
- Terms of Reference (March 2, 2026): Commerce and Industry Minister Piyush Goyal and his Canadian counterparts signed updated Terms of Reference, establishing a comprehensive mandate covering merchandise goods, services trade, technical barriers, sanitary protocols, and cross-border investment protections.
- Trade Diversification Mandate: Canada launched an export diversification strategy designed to double shipments to non-US markets over the coming decade to reduce reliance on North American continental demand. India serves as the primary demographic and industrial anchor for this diversification in the Indo-Pacific.
- The G20 Milwaukee Bilateral: Minister Maninder Sidhu noted during bilateral discussions in Milwaukee that technical negotiating teams have moved into text-based bargaining across multiple chapters, providing the foundation for Round 5 in Ottawa.
Baseline Economics: The Composition of Current Bilateral Trade
Reaching $70 billion within five years requires an annual growth rate exceeding 18% across combined goods and services channels. According to official data from Global Affairs Canada and the Indian Ministry of Commerce and Industry, two-way commercial exchange stood at $30.4 billion in 2025.
+-----------------------------------------------------------------------------------+
| CANADA–INDIA BILATERAL COMMERCIAL BREAKDOWN (2025 BASELINE) |
+-----------------------------------------------------------------------------------+
| Category / Trade Corridor | Value (USD / CAD) | Key Constituent Sectors |
+--------------------------------+-------------------+------------------------------+
| **Merchandise Trade Total** | $13.6 Billion | Goods, minerals, agriculture |
| • Canadian Exports to India | $3.9 Billion | Pulses, potash, wood pulp, |
| | | crude petroleum, coal |
| • Indian Exports to Canada | $9.7 Billion | Pharmaceuticals, gems, |
| | | electronics, machinery |
| **Services Trade Total** | $19.7 Billion | Professional, travel, IT |
| • Canadian Services to India | $15.2 Billion | Higher education, travel, |
| | | financial & insurance |
| • Indian Services to Canada | $4.5 Billion | Enterprise IT, engineering, |
| | | telecommunications |
| **Consolidated Bilateral Trade**| **$30.4 Billion** | Target by 2030: **$70 Billion**|
+--------------------------------+-------------------+------------------------------+
1. Merchandise Trade: The $13.6 Billion Goods Foundation
Two-way physical goods trade has historically favored Indian manufacturing, with India exporting $9.7 billion in merchandise to Canada against $3.9 billion in imports in 2025.
- Canadian Inflows: Canada is a primary agricultural and industrial supplier to India, providing yellow peas and lentils, potassium chloride fertilizer (potash), wood pulp for paper manufacturing, and coking coal for domestic blast furnaces.
- Indian Inflows: India’s shipments to Canada consist heavily of finished formulations: generic cardiovascular and oncology medications, processed precious gems and jewelry, automotive components, and textile yarns.
2. Services Trade: The Asymmetric Growth Driver
Unlike many of India’s other bilateral trade relationships, services trade with Canada exceeds merchandise trade. Total services exchange reached $19.7 billion in 2025.
However, this trade channel is heavily weighted toward Canadian exports ($15.2 billion). The primary economic driver is educational travel: hundreds of thousands of Indian undergraduate and postgraduate students enrolled in Canadian universities contribute tuition, campus housing payments, and living expenditures. Indian services exports ($4.5 billion) consist primarily of enterprise IT management, offshore engineering consulting, and business process outsourcing provided to Canadian financial institutions and energy utilities.
The Strategic Shift: Critical Minerals, Nuclear Fuel, and Aerospace
To bridge the gap from $30 billion to $70 billion, both negotiating teams are expanding beyond traditional agrarian and software categories into capital-intensive industrial inputs:
THE NEW GROWTH VECTORS
│
┌──────────────────────────────┼──────────────────────────────┐
▼ ▼ ▼
CRITICAL MINERALS & CLEAN TECH CIVIL NUCLEAR ENERGY AEROSPACE & DEFENSE
• Bilateral MoU on Mining / • Cameco $2.6B uranium deal • Bombardier / De Havilland
Processing (March 2026) with Atomic Energy Dept aerostructures supply
• Lithium, nickel, cobalt & • 10-year baseload nuclear • Satellite subsystems &
graphite for Indian EV cells fuel security for reactors advanced optical sensors
1. The Critical Minerals Partnership
In March 2026, Canada and India signed a bilateral memorandum of understanding (MoU) on critical minerals, establishing an operational framework covering exploration, refining, and joint venture project financing.
As India scales domestic manufacturing under the Production-Linked Incentive (PLI) scheme for advanced chemistry cell (ACC) batteries and electric mobility, its gigafactories face supply deficits in battery-grade lithium, nickel, cobalt, and synthetic graphite. Canada possesses substantial reserves of these transition elements and is positioning its mining sector as an alternative to Chinese refining monopolies.
2. Civil Nuclear Energy and Uranium Supply
Energy security forms a second pillar of the economic relationship. Following bilateral reviews, Canada’s Cameco Corporation finalized a landmark $2.6 billion long-term commercial supply contract with the Department of Atomic Energy (DAE) of India.
The agreement guarantees the supply of natural uranium hexafluoride and uranium concentrates to fuel India’s expanding fleet of pressurized heavy water reactors (PHWRs) over the next decade, providing baseload clean energy as India targets 500 gigawatts of non-fossil capacity by 2030.
3. Aerospace and Advanced Manufacturing
During a recent bilateral investment conference in Toronto, Canadian and Indian aerospace consortiums announced over $500 million in preliminary joint project commitments.
Canadian aerospace manufacturers (such as De Havilland and regional component producers) are expanding direct procurement contracts with Indian precision engineering firms (such as Tata Advanced Systems and Dynamatic Technologies), integrating Indian machine shops into civil aviation airframe supply lines.
Remaining Trade Hurdles Facing the Fifth Round in Ottawa
While the political will to hit $70 billion is clear, Round 5 in Ottawa must resolve several regulatory and structural sticking points:
+-----------------------------------------------------------------------------------+
| KEY REMAINING CEPA NEGOTIATING STICKING POINTS |
+-----------------------------------------------------------------------------------+
| Sector / Issue | Ottawa's Perspective | New Delhi's Perspective |
+------------------------------+-----------------------------+------------------------------+
| **Agricultural Tariffs** | Demands duty-free quota | Protects domestic pulse and |
| | stability on pulses/lentils | mustard farmers from import |
| | without abrupt tariff spikes| gluts during harvest seasons |
+------------------------------+-----------------------------+------------------------------+
| **Student Visa & Labor Caps**| Restricting non-permanent | Demands predictable Mode 4 |
| | student visa allocations to | mobility for tech workers, |
| | manage domestic housing | researchers, and engineers |
+------------------------------+-----------------------------+------------------------------+
| **Investment Protections** | Pushes for investor-state | Prefers exhaustion of local |
| | dispute settlement (ISDS) | legal remedies before |
| | in international tribunals | international arbitration |
+------------------------------+-----------------------------+------------------------------+
| **Data Localization** | Seeks cross-border data | Mandates financial and critical|
| | transfers without storage | telemetry data residency within|
| | mandates for tech/finance | Indian sovereign borders |
+------------------------------+-----------------------------+------------------------------+
1. The Pulse and Lentil Tariff Whitelist
Canadian agricultural federations have consistently demanded long-term tariff predictability from India. In past years, Indian commerce authorities frequently introduced seasonal import duties or quantitative restrictions on Canadian yellow peas and lentils to shield domestic farmers from price drops during local harvest windows. Canadian negotiators are pushing for a locked, multi-year tariff schedule within CEPA to support long-term planting cycles in Saskatchewan and Alberta.
2. Mode 4 Services and Immigration Policy Changes
Services trade discussions arrive alongside shifts in Canadian immigration policy. To ease pressure on metropolitan rental markets and social infrastructure, the Canadian federal government introduced limits on international student study permits and temporary foreign worker visas throughout 2025 and 2026.
Because education-related travel forms the bulk of Canada’s services exports to India, caps on student intake could slow services growth. In response, Indian negotiators are seeking binding commitments under “Mode 4” services provisions to ensure that accredited software developers, inter-company transferees, and scientific researchers can access streamlined temporary entry visas without facing general immigration quotas.
3. Investor-State Dispute Settlement (ISDS)
Canadian institutional allocators—including major pension funds like the Canada Pension Plan Investment Board (CPPIB), CDPQ, and Ontario Teachers’ Pension Plan (OTPP), which collectively hold over $55 billion in Indian infrastructure, real estate, and digital enterprise assets—demand robust investor protections.
Negotiators are working to reconcile Canada’s preference for international arbitration tribunals with India’s model bilateral investment treaty framework, which requires foreign investors to exhaust domestic judicial remedies for a minimum period before initiating international arbitration.
Frequently Asked Questions (FAQs)
What is the new trade target set by Canada and India?
Canadian International Trade Minister Maninder Sidhu announced that Canada and India are targeting an increase in two-way bilateral trade in goods and services from approximately $30 billion to $70 billion within the next five years (by 2030).
What is the status of the Canada-India Free Trade Agreement (CEPA)?
Negotiations for the Comprehensive Economic Partnership Agreement (CEPA) are entering their fifth round, scheduled to begin in Ottawa on Monday, October 5, 2026. Both governments have committed to concluding the treaty negotiations before the end of calendar year 2026.
Why were the trade talks paused previously?
Negotiations were paused between July 2023 and late 2025 due to diplomatic tensions. Following backchannel discussions, both nations agreed to separate economic and trade engagement from diplomatic disagreements, formally signing new Terms of Reference for CEPA in March 2026.
What are the main components of current bilateral trade?
In 2025, bilateral trade stood at $30.4 billion, comprising $13.6 billion in merchandise and $19.7 billion in services. Canada exports pulses, potash fertilizer, coking coal, and higher education services to India, while India exports pharmaceuticals, machinery, precious gems, electronics, and enterprise IT services to Canada.
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