Canadian PM Mark Carney says Ottawa is negotiating a free trade agreement with India, describing it as a game changer, with energy, agri-food, technology and education identified as priority sectors.
Summary:
- Canadian Prime Minister Mark Carney announced that Canada and India are actively negotiating a free trade agreement, describing the potential deal as transformative for Canadian workers and businesses
- Carney said he met Indian Commerce and Industry Minister Piyush Goyal to review progress and explore opportunities in energy, agri-food, technology and education
- The announcement signals a renewed push to diversify Canadian trade relationships at a time of significant tension with the United States over tariffs and economic sovereignty
Canada and India are in active free trade negotiations, Prime Minister Mark Carney announced, framing a potential deal as a landmark opportunity for Canadian exporters at a moment when the country is urgently seeking to reduce its economic dependence on the United States.
Carney said he had met Indian Commerce and Industry Minister Piyush Goyal to take stock of progress and map out the sectors where both countries see the strongest mutual opportunity. Energy, agri-food, technology and education were identified as the primary areas of focus, a list that reflects both the complementary structure of the two economies and the strategic priorities Carney has outlined since taking office.
The announcement carries particular weight given the history. Canada and India first launched formal free trade negotiations in 2010, under the banner of what was then called the Comprehensive Economic Partnership Agreement. Those talks dragged on for more than a decade before effectively stalling in 2023 amid a severe deterioration in diplomatic relations following the killing of Sikh separatist leader Hardeep Singh Nijjar in British Columbia. Ottawa publicly accused Indian government agents of involvement in the murder, a charge New Delhi rejected. The fallout led to the expulsion of diplomats on both sides and the suspension of trade talks entirely.
The resumption of negotiations, if that is what Carney’s post confirms, represents a significant diplomatic reset. Relations between the two governments appear to have stabilised sufficiently for economic engagement to resume, though the underlying sensitivities have not disappeared.
The commercial logic for Canada is straightforward. India is one of the world’s fastest-growing major economies and a massive importer of the commodities and products that Canada produces in abundance. Canadian LNG exports, which have long sought Pacific market access, would find a natural destination in an India that is working to expand gas in its energy mix. Canola oil, pulses and other agricultural goods face high Indian tariffs that a deal could lower substantially. The technology and education pillars reflect India’s demand for skilled migration pathways and Canadian institutions’ appetite for international students and partnerships.
For Carney, the push also serves a domestic political purpose. With the United States imposing tariffs on Canadian goods and the relationship with Washington under strain, being seen to open new markets aggressively matters. India, with a population of 1.4 billion and a middle class expanding rapidly in purchasing power, is the kind of alternative that plays well both economically and politically.
Whether the talks produce a deal, and how quickly, remains to be seen. Previous rounds foundered not just on diplomacy but on the substance: India’s agricultural sector is heavily protected and politically sensitive, and Canadian supply management in dairy and poultry has historically complicated its own trade negotiations. Both sides will need to move beyond the frameworks that failed before.
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For Canadian energy exporters, a trade agreement with India would open a significant and growing destination market at a moment when US tariff uncertainty has pushed Ottawa to accelerate diversification. India’s rapidly expanding energy import requirements, particularly for LNG and crude, align directly with Canada’s ambitions to develop Pacific export infrastructure. Canadian agricultural exporters, notably canola and pulses producers, would stand to gain from improved market access to one of the world’s largest food import markets. The talks signal a broader reorientation of Canadian trade strategy, though the chequered history of previous negotiating rounds will temper expectations about the pace of any deal.
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Separately, ICYMI, Reserve Bank of India Governor Sanjay Malhotra said:
This article was written by Eamonn Sheridan at investinglive.com.