In a significant move to strengthen economic ties, Canadian Prime Minister Mark Carney and Indian Prime Minister Narendra Modi have agreed to restart negotiations on a comprehensive bilateral free trade agreement. The decision marks a notable thaw in relations between the two nations following a period of diplomatic strain.
A New Chapter in Bilateral Relations
The agreement to begin negotiations on a high-ambition Comprehensive Economic Partnership Agreement was announced following a meeting between the two leaders on the sidelines of the G20 summit in Johannesburg, South Africa. According to a statement from India’s Ministry of External Affairs, Prime Minister Modi also extended a formal invitation for Prime Minister Carney to visit India.
The two countries have set an ambitious target to increase their bilateral trade to $50 billion by the year 2030. This goal represents a substantial increase from current levels, as Canada and India exchanged approximately CAD$31 billion in goods and services last year, according to official Canadian data.
Overcoming Past Diplomatic Hurdles
This is not the first attempt by Canada and India to secure a trade deal. Previous efforts were derailed in 2023 after then-Prime Minister Justin Trudeau and other Canadian officials publicly stated there was evidence linking the Indian government to the killing of a Sikh activist in the Vancouver area. Canadian police have since laid criminal charges in the case, which is awaiting trial.
Indian officials have consistently voiced concerns that Canada has not taken sufficient action to address active Sikh separatist groups operating within its borders. Since assuming office in March, Prime Minister Carney has actively worked to restore normal diplomatic relations. A key step in this process was the appointment of new ambassadors by both governments this past summer.
The Path Forward for Trade and Security
Speaking to reporters just before his pivotal meeting with Modi, Carney emphasized the critical importance of securing better trade access to one of the world's largest and fastest-growing economies. He highlighted the immense economic opportunity that a strengthened partnership with India represents for Canada.
Alongside the renewed trade dialogue, Carney confirmed that both countries continue to maintain communication between their law enforcement and national security agencies. This indicates a parallel effort to address and manage the complex security concerns that have impacted the relationship in the recent past, paving the way for more stable and productive economic cooperation.
