India-Canada FTA Talks

March 7, 2022

India and Canada decided to restart negotiations on Free Trade Agreement (FTA) or Comprehensive Economic Partnership Agreement (CEPA).

History of negotiations

  • The benefits of India-Canada CEPA were highlighted by “India-Canada CEO Round Table” held in 2008. It was decided that bilateral trade would get boost by elimination of tariffs.
  • In 2010, the benefits were reiterated in the report based on joint study conducted by both the countries. In the same year, Prime Ministers of India and Canada announced the launch of India-Canada CEPA in Seoul, to realize the benefits. Later, the negotiations for India-Canada CEPA were formally launched in New Delhi.
  • Both countries held 10 rounds of negotiations. In 2017, 10th round of India-Canada CEPA negotiations were held in New Delhi. A bilateral meeting was held in 2020 to explore the option of an early harvest trade deal or interim trade deal.

Present status

  • India is inclined towards an early harvest trade deal or mini-trade deal before concluding a Free Trade Agreement (FTA). Difficult and sensitive issues will be kept out of the early harvest deal. Such issues will be dealt later, while concluding final agreement.
  • It is believed that along with goods, the present round of negotiations will also include services and investments. As Canada is not large market for goods from India, India wants strong services agreement under the proposed FTA. This will enable Indian IT professionals to get Canadian work visas easily.
  • India also wants to focus on sectors like textiles, agriculture, pharmaceuticals. Also, India’s interests lie in reducing technical, sanitary & phyto-sanitary barriers to trade. Canada proposed inclusion of investment protection agreement in the deal.

India –Canada trade

India’s exports to Canada include Organic chemicals, pharmaceuticals, textiles, Iron and steel, etc. India’s imports from Canada include vegetables, petroleum products, etc. Canada is India’s 31st largest market and India had $200 million trade surplus with Canada in financial year 2020-21.

India’s Commerce minister Piyush Goyal and his Canadian counterpart Mary Ng are scheduled to meet in New Delhi on 11th March 2022.

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