India-Canada to begin talk on Free Trade Agreement

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India-Canada to begin talk on Free Trade Agreement

  • Indian Commerce minister and his Canadian counterpart to begin talks for a free trade agreement (FTA) between the two countries.
  • The two sides had begun talks for a comprehensive economic partnership agreement in 2010.
  • But it did not see much progress although the negotiations went on till 2017.

Focus of meeting

  • Canada will focus on investment protection agreement as part of the comprehensive deal
  • While India is focussed to discuss market access for agriculture, textiles, pharmaceuticals, and easing of technical and sanitary and phytosanitary barriers to trade.
  • The negotiations for a comprehensive economic partnership may also cover investment and services
  • However, India is looking for an early harvest or an interim trade deal before progressing with a full pact

India-Canada trade relations

  • Canada is India’s 31st largest market, accounting for just $3 billion or 0.88% of India’s total outbound shipments in April-January 2021-22.
  • India had a small trade surplus of nearly $200 million with Canada with imports worth $2.68 billion, and exports worth $2.9 billion in 2020-21
  • Exports to Canada : Organic chemicals, pharmaceuticals, and apparel and textiles, Iron and steel
  • Imports from Canada: vegetables and petro products

Cooperation in Energy sector

  • In 2010, Both signed a Nuclear Cooperation Agreement (NCA) establishing the Joint Committee on Civil Nuclear Cooperation.
  • Uranium supply agreement inked in 2015 when the Indian PM visited Canada.

Cooperation in S&T and Space sector

  • ISRO and CSA (Canadian Space Agency) signed MOUs for collaboration in the field of space exploration and use.
  • Many Canadian satellites have been launched by ANTRIX, ISRO's commercial arm.

Indian Diaspora

  • The Indian diaspora in Canada is the world's eighth largest.
  • In the 2019 federal elections, 23 Indo-Canadians (Punjab ties) elected as MPs.
  • Both countries have estd. several organisations to boost coop. including Canada-India Parliamentary Friendship Group (CIPEG), Canada-India Business Council (CIBC),
  • Canada-India Foundation (CIF), and Indo-Canada Chamber of Commerce (I-CCC).


  • Khalistani separatist factor: single most significant obstacle to India-Canada relations.
  • Sikhs (~1%) make up a considerable component of the Indian diaspora. Few Canadian leaders support Khalistan cause for electoral advantages.
  • Commerce Relations: Despite both being active in commerce for a long time, India's MEA claims that trade treaties are ""always underperforming.""
  • Canadian Trade Policies are Being Feminised: Gender clauses included in trade agreement by Canadian govt. Perceived as a non-tariff barrier in countries like India.
  • Bilateral agreements: CEPA and Investment Promotion and Protection Agreements (BIPPA) in works for some time, but far from finalisation.
  • Strategic Location: Canada, surrounded by developed Western countries, cannot fully comprehend India which is bordered by hostile neighbours like China and Pakistan.

Way forward

  • Feminisation clauses: Canada needs to understand and eliminate Feminisation clauses from trade agreements, or give India more time to finish obligations.
  • Renewable energy usage: With a focus on renewable energy targets in INDCs, India needs to reach an agreement or MOU on renewable energy.
  • Infrastructure and transportation are two areas where coop. and investment could be beneficial.
  • Convergence on China: Canada has announced that it would diverge its trade relations and reject China's diplomacy. India has the potential to become a provider of goods.