India & Canada To Restart FTA Talks, Move To Normalise Diplomatic Ties

New Delhi, Jun 19 (KNN) India and Canada have agreed to resume stalled negotiations on a free trade agreement (FTA), marking a significant step towards restoring diplomatic and economic engagement following a period of strained bilateral relations. 

The decision was made during the first meeting between Indian Prime Minister Narendra Modi and newly appointed Canadian Prime Minister Mark Carney on the sidelines of the G7 Summit in Kananaskis, Canada.

The Ministry of External Affairs (MEA) confirmed in a statement that both leaders agreed to begin normalising ties by facilitating the early return of High Commissioners to New Delhi and Ottawa. 

“The leaders also discussed the importance of restarting the stalled negotiations on the Early Progress Trade Agreement (EPTA), with a view to paving the way for a Comprehensive Economic Partnership Agreement (CEPA),” the MEA said.

Discussions also covered a wide range of potential areas for collaboration, including clean energy, digital transformation, liquefied natural gas (LNG), food security, critical minerals, higher education, mobility, and supply chain resilience.

Trade talks between the two nations were suspended in September 2023, shortly before India hosted the G20 Summit. 

The shift in tone comes amid changing global trade dynamics, including rising protectionism in the United States under President Donald Trump. 

Canada, as the second-largest exporter to the U.S. after China, has been particularly affected by Washington’s policies, prompting Ottawa to explore broader trade alliances.

Despite political tensions, bilateral trade has remained resilient. Merchandise trade between India and Canada grew modestly from USD 8.3 billion in FY2023 to USD 8.4 billion in FY2024. 

India's exports to Canada rose 9.8 percent year-on-year to USD 4.2 billion in FY2024–25, while imports from Canada declined 2.3 percent to USD 4.4 billion. 

Currently, over 600 Canadian companies operate in India, and more than 1,000 Canadian firms are actively engaged in the Indian market. 

The agreement to resume trade talks is seen as a pragmatic step towards rebuilding a multifaceted economic and strategic partnership.

(KNN Bureau)