India and Canada Set to Finalize CEPA Talks by 2026 to Enhance Trade Relations

New Delhi, India Aug 28, 2026 ALN: In a bid to deepen bilateral economic and financial cooperation, India and Canada have announced plans to conclude negotiations on a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026. This ambitious move aims to bolster trade relations between the two nations, which have been steadily evolving over the years. The CEPA is expected to encompass a wide range of sectors, including goods, services, investments, and economic cooperation, thereby facilitating a more integrated economic relationship.

During the inaugural Economic and Financial Dialogue held in Toronto, Finance Minister Nirmala Sitharaman and Canada's Minister of Finance and National Revenue, Francois-Philippe Champagne, agreed to foster engagement among relevant authorities and stakeholders to explore opportunities related to cross-border remittances and merchant payments. This initiative is particularly significant given the large Indian diaspora in Canada, which plays a crucial role in remittances that support India's economy.

Both ministers expressed enthusiasm for expanding the use of the Unified Payments Interface (UPI) in Canada through partnerships with payment service providers. UPI is a real-time payment system developed by the National Payments Corporation of India, which has transformed the digital payments landscape in India. The integration of UPI in Canada is expected to facilitate faster and more cost-effective payments, thereby supporting bilateral trade, tourism, education, and the growth of small and medium-sized enterprises in both countries, as outlined in a joint statement released after the dialogue.

This dialogue builds on commitments made by Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney during their meeting in New Delhi in March 2026, where they emphasized strengthening bilateral economic and financial cooperation. The meeting highlighted the importance of a strategic partnership that reflects the changing dynamics of the global economy and the need for countries to collaborate on various fronts.

The two sides reaffirmed their shared commitment to concluding negotiations for the Canada-India CEPA by the end of 2026. The dialogue also included discussions on global macroeconomic developments and domestic policy priorities, aimed at enhancing economic and investment ties. By setting a clear timeline for the CEPA negotiations, both countries signal their seriousness in elevating their economic relationship.

Key discussions focused on supporting financial and commercial linkages between the two countries, with a shared goal of expanding bilateral trade to CAD 70 billion (approximately Rs 4.65 lakh crore) by 2030. This ambitious target reflects the potential for growth in trade, particularly in sectors where both nations excel, such as technology, agriculture, and natural resources.

India has also expressed its readiness to initiate negotiations on a Bilateral Investment Treaty (BIT) at the earliest, as stated in the joint communiqué. A BIT is crucial for providing a stable and predictable investment environment, protecting investors from arbitrary actions, and promoting sustainable economic growth. The establishment of a BIT would further encourage Canadian investments in India, particularly in sectors like infrastructure, renewable energy, and technology.

The ministers acknowledged the growing investment relationship between the two nations, highlighting the significant presence of Canadian pension funds and other institutional investors in India. These funds have increasingly recognized the potential for returns in the Indian market, particularly in infrastructure projects and technology startups. They discussed strategies to facilitate greater engagement between Indian and Canadian financial institutions and institutional investors, which could lead to increased capital flows and economic development.

Furthermore, the two sides explored opportunities for cooperation in payment modernization, financial stability, fintech innovation, capital markets development, and measures to combat financial crime. The fintech sector, in particular, has seen rapid growth in both countries, and collaboration in this area could lead to the development of innovative financial solutions that benefit consumers and businesses alike.

On global economic and financial issues, the ministers agreed to explore enhanced cooperation in shared interests, including critical minerals, with a focus on building resilient and diversified supply chains. This is particularly relevant given the increasing global demand for critical minerals used in technology and renewable energy, which both countries possess in abundance.

Following the dialogue, Sitharaman and Champagne engaged with representatives from Canada's financial services, fintech, technology, artificial intelligence, infrastructure, and energy sectors. These engagements underscored opportunities for increased collaboration among businesses, financial institutions, and other stakeholders in both countries. By fostering such partnerships, both nations can leverage their respective strengths to drive innovation and economic growth.

The ministers reiterated their commitment to maintaining regular economic and financial dialogues and advancing concrete cooperation and tangible outcomes in areas of mutual interest. The next India-Canada Economic and Financial Dialogue is scheduled for 2027, indicating a long-term commitment to nurturing this bilateral relationship.

Additionally, Sitharaman interacted with leading business chambers and professional alumni associations in the India-Canada corridor to explore new avenues for collaboration. This engagement is crucial as it helps to build networks and foster relationships that can lead to increased trade and investment between the two countries.

In conclusion, the ongoing discussions and initiatives between India and Canada mark a significant step towards strengthening their economic ties. As both nations work towards finalizing the CEPA by 2026 and establishing a BIT, they are poised to unlock new opportunities for collaboration that can benefit their economies and enhance their global competitiveness. The implications of these agreements extend beyond trade and investment; they also signify a commitment to working together on shared global challenges, thereby reinforcing the strategic partnership between India and Canada.