Trade Targets

India and Canada have set a target of bilateral trade worth ₹4.65 lakh crore by 2030. 

Canada has the resources to power India’s growth story. India has the market that would help Ottawa expand its investments across every possible sector. Canadian pension funds have a brighter future, with several sectors in India offering unlimited opportunities for the next few decades. 

In this backdrop, the Inaugural India–Canada Finance Ministers’ Economic and Financial Dialogue, led by Sitharaman and Canada’s Minister of Finance and National Revenue, François-Philippe Champagne, sought to strengthen bilateral economic and financial cooperation, including the shared commitment to conclude Canada-India Comprehensive Economic Partnership Agreement talks by the end of 2026.

There is a readiness to initiate negotiations on a Bilateral Investment Treaty at the earliest.

Recognising the importance of resilient and diversified supply chains for economic security and sustainable growth, the Ministers have agreed to pursue opportunities to collaborate in strategic sectors, including critical minerals.

Bilateral Economic Ties

The role of long-term institutional capital in strengthening bilateral economic ties is paramount. There is a substantial presence of Canadian pension funds and other institutional investors in India, and the current tax relief provided to these investors by India has stimulated investment. 

There is also a need for greater engagement between Indian and Canadian financial institutions and institutional investors and deeper collaboration on a range of financial-sector issues, including payments modernisation, financial stability, FinTech innovation, and capital markets development.

There are also opportunities to broaden the use of Unified Payments Interface (UPI) in Canada through partnerships with payment service providers. Such efforts could contribute to faster, more efficient, and cost-effective payments and support bilateral trade, tourism, education, and the growth of small and medium-sized enterprises (SMEs) in both countries.

Comprehensive Economic Partnership Agreement

India and Canada launched negotiations for the Comprehensive Economic Partnership Agreement (CEPA) during the visit of Prime Minister of Canada Mike Carney to India in early March.

In fact, Prime Minister Narendra Modi's proposed visit to Canada in December may witness the conclusion of negotiations for CEPA. The Terms of Reference (ToR) of the negotiations will provide the format, frequency, and approach to India-Canada CEPA negotiations. 

The negotiations would cover trade in goods, services, and other mutually agreed policy areas. Canada represents a market of 41.65 million people (2025) and US$2.34 trillion in terms of GDP at purchasing power parity (PPP). The India–Canada CEPA holds significant potential to unlock and expand bilateral trade, which stood at US$8.66 billion in FY 2024-25.  

Trade Front

Key exports from India to Canada include drugs and pharmaceuticals, iron and steel, seafood, cotton garments, electronic goods, and chemicals, among others. Key imports of India from Canada include pulses, pearls & semiprecious stones, coal, fertilizer, paper, and petroleum crude.  

Key sectors of India’s services exports to Canada include telecommunications, computer and information services, and other business services. These sectors hold significant future growth potential and are expected to expand further following the conclusion of the CEPA. 

Canada is also home to over 425,000 Indian students and a strong Indian community.

Canadian Investments In India

Total direct and indirect Canadian investment in India has surpassed US$110 billion, driven heavily by Canadian pension funds backing Indian infrastructure, logistics, and digital spaces. Canadian pension funds (such as the Canada Pension Plan Investment Board, or CPP Investments) rank among the largest foreign infrastructure investors in India.

Canadian investments and economic engagements are increasingly targeting India's Micro, Small, and Medium Enterprises (MSMEs). More than 600 Canadian companies operate in India, while over 1,000 others explore entry into the market across tech, manufacturing, and financial services.

As Canada diversifies, India is seeking a bigger share of Canadian investments abroad. Sitharaman, during her recent visit to Canada, sought to widen Canadian investment in India, pitching the country’s infrastructure, technology, capital markets, and critical-minerals opportunities to some of Canada’s biggest institutional investors and businesses. The discussions focused on expanding institutional investment across transmission, renewable energy, roads, ports, urban infrastructure, digital infrastructure, and data centres.

India is also actively pitching opportunities for Canadian firms within the Gujarat International Finance Tec-City (GIFT City). 

While Canada has the funds and natural resources, India’s scale, sustained growth, and economic reforms will continue to create strong commercial opportunities for Canadian firms.

(The writer is a commentator on geopolitics and geoeconomics. Views expressed are personal.)