India-Canada Trade Talks Gain Momentum Amid Shifting Global Dynamics
NEW DELHI — Renewed trade negotiations between India and Canada are taking on greater significance as both countries look to strengthen economic ties in a changing global landscape, despite past disruptions caused by political tensions.
The relaunch of discussions during Canadian Prime Minister Mark Carney’s visit to India in March has provided an opportunity to rebuild a more stable and long-term bilateral economic relationship, according to former Indian High Commissioner to Canada Sanjay Kumar Verma.
Verma said Canada’s heavy economic reliance on the United States has become a strategic limitation in an increasingly uncertain geopolitical environment, making diversification a priority.
“Canada faces its own structural dilemma. Its overwhelming economic dependence on the United States has become a strategic constraint… Diversification is no longer optional. In that context, India represents not just another market, but a long-term strategic partner,” he said.
He pointed to a shift in 2022 toward an Early Progress Trade Agreement (EPTA) as a more pragmatic approach, suggesting it could serve as the foundation for a broader Comprehensive Economic Partnership Agreement (CEPA).
Rather than pursuing a single, sweeping deal, Verma said a phased approach would be more effective, starting with areas already negotiated and gradually expanding to include more complex issues such as investment protection, digital trade and regulatory cooperation. More sensitive sectors, including agriculture and intellectual property, could be addressed later as conditions improve.
Trade between the two countries remains relatively modest but has significant potential to grow with improved market access and simplified trade rules. Services, already a strong component of the relationship, could expand further in sectors such as information technology, education and professional services.
Investment ties are also a key pillar of the relationship. Canadian pension funds and institutional investors have made substantial investments in India’s infrastructure and renewable energy sectors, while Indian companies have established a growing presence in Canada’s services industry.
However, Verma emphasized that clearer taxation and repatriation policies will be essential to sustain and expand investment flows, balancing regulatory oversight with investor confidence.
He also stressed the need to shield economic cooperation from political disruptions that have previously strained relations.
“The answer does not lie in assuming that such episodes will not recur. It lies in designing institutions that ensure they do not derail economic engagement,” he said.
Such measures would include stronger dispute resolution mechanisms, regular review processes and institutional frameworks that continue functioning regardless of political tensions. He also called for a greater role for the private sector to help stabilize ties during periods of diplomatic strain.
The renewed push for a trade agreement reflects a broader effort by both countries to deepen economic engagement and adapt to evolving global trade dynamics. (Source: IANS)
