India and Canada have agreed to restart stalled trade negotiations and restore diplomatic normalcy following a meeting between Prime Minister Narendra Modi and his Canadian counterpart Mark Carney. During bilateral talks on the sidelines of the G7 Summit, the leaders also confirmed plans to appoint new high commissioners, signalling a reset in relations that were strained since 2023.
Trade Talks Regain Momentum
The central outcome of the meeting was a mutual commitment to resume discussions on the Early Progress Trade Agreement (EPTA), seen as a stepping stone toward a broader Comprehensive Economic Partnership Agreement (CEPA). Talks on the CEPA originally began in 2010 but faced multiple setbacks, including a recent pause due to political tensions. Despite the freeze, both sides made notable progress by holding ten rounds of negotiations on the EPTA, a limited-scope trade agreement intended as a stepping stone to the more ambitious CEPA.
Both sides decided to instruct their officials to re-engage on trade negotiations at the earliest possible opportunity.
India is aiming for greater market access for its traditional goods and a more liberal visa regime for Indian professionals. And, also seeks regulatory harmonization and fewer non-tariff barriers, particularly in sectors where it has competitive advantages.
Canada is expected to seek broader access for its agricultural exports and automobile sector in the Indian market. Alongside the trade pact, discussions on a separate Foreign Investment Promotion Agreement are also likely to resume.
Despite deep economic linkages—with Canadian pension funds investing over $75 billion in India—the bilateral trade figures remain modest. In 2024, trade in goods stood at $8.6 billion while services trade reached $14.3 billion.
High Commissioners To Be Reinstated
Both nations have agreed to appoint new high commissioners to each other’s capitals. This comes after India Canada reset following a period of diplomatic freeze following allegations in 2023 regarding alleged Indian involvement in the killing of Khalistani separatist Hardeep Singh Nijjar. New Delhi strongly denied the allegations as “baseless and politically motivated”.
The Canadian Prime Minister’s Office released a statement affirming that “the leaders agreed to designate new high commissioners, with a view to returning to regular services to citizens and businesses in both countries.”
India Canada Reset
Beyond trade, “the leaders explored ways to expand cooperation in critical and emerging areas, including clean energy, artificial intelligence, digital transformation, LNG, food security, higher education and critical mineral supply chains,” Foreign Secretary Vikram Misri confirmed after the talks.
“India and Canada are connected by a strong belief in democracy, freedom and rule of law,” PM Modi said after the meeting. “We look forward to working closely to add momentum to the India-Canada friendship. Areas like trade, space, clean energy, fertilisers and critical minerals offer immense potential.”
Foreign Secretary Misri added that senior-level dialogues would resume across multiple sectors to “bring greater momentum to the relationship”.
Geostrategic Alignment
The two prime ministers also reaffirmed their commitment to a free and open Indo-Pacific, signalling shared strategic goals in a rapidly shifting global order. Canadian Prime Minister Carney also raised issues of “transnational crime and security”. Both leaders emphasised the importance of respecting sovereignty and international norms.
This meeting marks PM Modi’s first visit to Canada in a decade and is seen as a crucial step in mending ties after months of friction. With negotiations back on track and diplomatic representation soon to be restored, both countries appear to be realigning their partnership on a more stable and cooperative foundation.
