Context: India and Canada have reaffirmed their commitment to conclude negotiations for a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026.
About India–Canada Trade Deal:
What It Is?
- The proposed India–Canada Comprehensive Economic Partnership Agreement (CEPA) is a broad trade and economic agreement aimed at liberalising trade, promoting investment and strengthening financial and commercial ties between the two countries.
Aim: To expand bilateral trade and investment, reduce trade barriers, deepen financial cooperation and create a predictable framework for businesses and investors in both countries.
Key Features:
- CEPA by 2026: Both countries committed to conclude CEPA negotiations by the end of 2026.
- Trade Expansion: Aim to raise bilateral trade to about ₹4.65 lakh crore (CAD 70 billion) by 2030, from ₹70,354 crore in 2025-26.
- Investment Protection: India expressed readiness to begin negotiations for a Bilateral Investment Treaty (BIT) to provide greater certainty and protection to investors.
- Digital Payments & FinTech: Cooperation proposed in UPI, cross-border remittances, FinTech, capital markets, financial stability and financial crime prevention.
- Strategic Investments: Greater cooperation envisaged in critical minerals, AI, technology, infrastructure, energy and resilient supply chains, alongside deeper participation by Canadian institutional and pension funds.
Significance:
- Expands India’s economic partnerships and provides businesses greater access to the Canadian and North American markets.
- Greater participation of Canadian pension and institutional funds can support India’s infrastructure and asset-monetisation pipeline.
- Cooperation in critical minerals, energy and technology can strengthen India’s economic security and diversify strategic supply chains.
Relevance in UPSC Examination:
- GS Paper II: India–Canada bilateral relations, economic diplomacy, agreements involving India and their implications.
- GS Paper III: External trade, foreign investment, infrastructure financing, FinTech, critical minerals and resilient supply chains.
- Essay: Economic diplomacy, globalisation, strategic trade partnerships and India’s role in the changing global economic order.
