India, Canada Ink Major Commercial Pacts; Set Sights on 2026 FTA Finish
India and Canada sign key commercial agreements in Bengaluru as both nations aim to conclude the Comprehensive Economic Partnership Agreement by 2026.
In a significant move to strengthen economic ties, Indian and Canadian entities have signed a series of commercial agreements and Memoranda of Understanding (MoUs). The signing ceremony took place in Karnataka, Bengaluru, in the presence of Canada's Minister of International Trade, Maninder Sidhu, marking a pivotal moment for bilateral trade and industrial collaboration.
The Road to CEPA: A 2026 Deadline
Beyond the immediate commercial deals, the two nations are working toward a much larger goal: the Comprehensive Economic Partnership Agreement (CEPA). According to a presentation by the Ministry of Commerce and Industry, India and Canada have officially confirmed their target to wrap up negotiations for this proposed trade deal by the end of 2026.
The momentum is already building, with the fifth round of negotiations recently concluding in Ottawa between October 5 and October 9. These high-level talks focused on several critical pillars of trade, including:
- Market access for both goods and services.
- Investment parameters and rules of origin.
- Intellectual property rights.
- Trade remedies to ensure fair competition.
The dialogue is set to continue quickly, with the next round of bilateral discussions scheduled to take place in New Delhi in early November.
Projected Economic Boom
The stakes for the CEPA are high. The agreement aims to dismantle trade barriers and open doors for businesses in both jurisdictions. Government data reveals that bilateral trade between the two countries reached USD 7,956.43 million in FY26.
Looking ahead to 2035, official estimates suggest that the CEPA could be a game-changer. It is projected to boost bilateral trade by an additional USD 4.4 billion to USD 6.5 billion. Furthermore, Canada expects a gross domestic product (GDP) gain ranging from USD 3.8 billion to USD 5.9 billion as a result of the pact.
Focus on Innovation and Infrastructure
Speaking at a business reception in Bengaluru—often referred to as India's innovation hub—Minister Maninder Sidhu emphasized that India is an indispensable commercial market. He highlighted a "short list" of sectors where Canada sees immense potential for collaboration:
- Artificial Intelligence (AI) and Quantum Computing.
- Digital Innovation and Security.
- Aviation Infrastructure.
- Sustainability and Smart Mobility.
Sidhu noted that the relationship is already thriving, with several prominent Canadian firms such as Kinaxis, OpenText, CGI, CAE, Magellan Aerospace, MDA Space, and BCE Global Tech already operating within India.
The Aviation Connection
A specific point of interest for the Canadian delegation was the aviation sector. After touring Terminal 2 of the Bengaluru airport and learning about its expansion plans, Minister Sidhu pointed to the existing footprint of Canadian investment. He mentioned Fairfax Financial's investments in the airport, as well as the active roles of Canadian companies like Genetec, Transoft Solutions, and RBH Access.
Why India is Critical for Canada
Canada's strategic pivot toward India is driven by a broader macroeconomic goal: the desire to double its non-U.S. exports over the next ten years. With India's economy growing at approximately 7% annually and its trajectory toward becoming the world's third-largest economy, Ottawa views the market of 1.4 billion people as one it simply cannot afford to ignore.
"Canada and India are renowned for their creative flair. So what better place for all of us to gather than here in India's Innovation Hub?" said Minister Sidhu.