- Why in news
- PM Modi and Canadian PM Mark Carney met on the sidelines of the G7 Summit in Evian, France, on 16 June 2026. They reviewed CEPA talks and agreed to launch negotiations on a security of information pact.
- What it is
- The India-Canada CEPA is a proposed bilateral trade agreement covering trade in goods, services and investment. A CEPA goes beyond a basic free trade agreement by including wider economic cooperation. Talks sit within efforts to rebuild ties after a period of strain.
- CEPA target
- Both sides want to conclude the CEPA negotiations within 2026.
- GSOIA
- The leaders agreed to launch negotiations on a General Security of Information Agreement to deepen defence and security cooperation.
- IORA
- India backed Canada becoming a Dialogue Partner of the Indian Ocean Rim Association.
- Energy and resources
- They reviewed commercial arrangements relating to LNG, LPG and metallurgical coal.
- Raisina Americas
- The leaders announced Raisina Americas as a platform for dialogue and cooperation.
- Signing
- Piyush Goyal and Canada's trade minister Maninder Sidhu signed the Terms of Reference on 2 March 2026 in New Delhi.
- Role of ToR
- The ToR sets the format, frequency and approach of the negotiations.
- Trade target
- The goal for bilateral trade is US$50 billion by 2030.
- Current trade
- Bilateral trade was USD 8.66 billion in FY 2024-25, with Indian exports of USD 4.22 billion and imports of USD 4.44 billion.
- Origin of talks
- Work on the ToR followed the leaders' meeting on the margins of the G7 meeting in Kananaskis, Canada, in October 2025.
- Scope
- Talks cover trade in goods, services and other mutually agreed policy areas.
Don’t confuse with CEPA vs FTA: An FTA mainly cuts tariffs on goods. A CEPA also covers services, investment and wider economic cooperation.
Don’t confuse with GSOIA vs other defence pacts: GSOIA covers sharing of classified information. It is not a logistics or basing agreement.
Don’t confuse with Terms of Reference vs the agreement: The ToR only sets how talks will run. The CEPA is the final treaty text.
International bodies and relations: the largest group of news questions in Prelims (61 since 2013), often about background, members and location. In Mains, 27 news-triggered questions, mostly on India's interests.
Why it matters
- A trade deal would diversify India's trade and tap Canada's energy, minerals and agriculture strengths.
- Defence and information-sharing talks show ties are being rebuilt across sectors.
- Aims to lift bilateral trade from USD 8.66 billion towards US$50 billion by 2030.
- Gives Indian pharma, textiles and services exporters access to a 41.65 million-person market, and helps India diversify partners.
- Supports rebuilding ties and links with the large Indian diaspora and student community in Canada.
Problems
- Past diplomatic strain can slow trust and talks.
- Sensitive areas such as agriculture and services market access can delay a deal.
- Bilateral ties were strained earlier, so political trust must be rebuilt.
- Sensitive issues such as agriculture, pulses and dairy may be hard to balance.
Way forward
- Keep regular ministerial and institutional dialogues to resolve trade issues.
- Build on energy, critical minerals and education cooperation to deepen ties.
- Conclude talks in phases, possibly with an early-harvest deal on easy areas.
- Keep the diplomatic channel steady so trade talks are not derailed by political disputes.
Put in your answer
India-Canada engagement: Leaders noted ongoing work under the Canada–India Talent and Innovation Strategy on skills, innovation and education.
Trade data: Bilateral trade was USD 8.66 billion in FY 2024-25, a small share of both countries' trade.
People ties: Over 425,000 Indian students study in Canada.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statements
Ours, not from a UPSC paper
Consider the following statements:
- 1.The Terms of Reference for the India-Canada CEPA fix the final tariff schedules for goods traded between the two countries.
- 2.In FY 2024-25, India's imports from Canada were higher in value than its exports to Canada.
- 3.Work on the Terms of Reference followed a bilateral meeting of the two leaders on the margins of a G7 meeting in Canada in October 2025.
Which of the statements given above is/are correct?
True or false?
1 of 7
Statements the way Prelims prints them. Say first, then see the fact.
1.The Terms of Reference for the India-Canada CEPA were signed in New Delhi on 2 March 2026.
True. Signed on 2 March 2026 at Hyderabad House, New Delhi.
2.The Terms of Reference fix the final tariff schedules for goods traded between India and Canada.
False. The ToR only provides the format, frequency and approach of negotiations; it is not the agreement itself.
3.The stated goal is to take bilateral trade to US$50 billion by 2030.
True. US$50 billion by 2030.
4.In FY 2024-25, India's imports from Canada were lower than its exports to Canada.
False. Imports (USD 4.44 billion) were higher than exports (USD 4.22 billion).
5.Work on the ToR followed the leaders' bilateral meeting on the margins of the G7 meeting in Kananaskis in October 2025.
True. The leaders met at the G7 in Kananaskis, Canada, in October 2025.
6.Pulses, coal and petroleum crude are among India's key imports from Canada.
True. Key imports include pulses, pearls and semiprecious stones, coal, fertilizer, paper and petroleum crude.
7.Drugs and pharmaceuticals are not among India's key exports to Canada.
False. Drugs and pharmaceuticals are listed first among India's key exports to Canada.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
10 marks · 150 words
India and Canada signed the Terms of Reference on 2 March 2026 and launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA). Examine the potential benefits of the proposed CEPA for India, the challenges in concluding it, and suggest a way forward.
Worth revising until Prelims 2028: most news questions come within two years of the event.