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Canada-India Free Trade Negotiations Progressing

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Canada has bilateral free trade agreements with a number of other nations (e.g., between the US and Mexico under the USMCA, between Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam under the CPTPP, and with most of the European Union under the CETA).

Canada’s next target for free trade appears to be India, and Global Affairs indicates that negotiations toward an Early Progress Trade Agreement have been progressing rapidly!

Negotiations of Phased Agreements

Canada and India first announced the launch of negotiations over a decade ago but those negotiations eventually ground to a halt. In March 2022, the countries issued a jointstatement confirming the re-launching of negotiations and it now looks like there has been some progress.

To overcome the previous roadblocks, the two countries are negotiating phased agreements, with the first step being an Early Progress Trade Agreement (“EPTA”).  The EPTA appears to be an interim but important first step toward an eventual Comprehensive Economic Partnership Agreement (“CEPA”). An EPTA will expand market access by putting in place an agreement regarding issues that the two countries can mutually agree upon, such as “high level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement” (Global Affairs, March 2022), while the two countries continue negotiations on more contentious issues.

Global Affairs recently reported that the fifth round of negotiations took place virtually in November 2022 and that the sixth round is currently underway (taking place in New Delhi between January 23 and February 8, 2023).  

India as a Trade Partner

India clearly has great economic potential as a Free Trade Partner. Global Affairs itself predicts that India will be the most populous country in the world by 2030, and trade between the two countries increased by 71% from 2011 to 2021.

In 2021, for example, Canada saw $4.6 billion CAD of imported goods and $3 billion CAD of exported goods to/from India (Global Affairs Canada, 2023).

Global Affairs also reports that key sectors of opportunity in India for Canadian exporters include “agriculture and agri-food, cleantech, digital industries, infrastructure, life sciences and automotive”.

Negotiations for a Foreign Investment Agreement also Underway

Canada and India are also negotiating a Foreign Investment Promotion and Protection Agreement (FIPA), to provide “greater predictability and certainty for Canadian investors considering investment opportunities in India” (Global Affairs Canada, 2021).

The Federal Government announced that Canada developed its own Foreign Investment Promotion and Protection Agreement Model, and it will be interesting to see if it will be used as a model for the India-Canada agreement.

India is also negotiating trade agreements with the UK and the EU.

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