What Just Happened?
On November 23, 2025, Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney agreed to formally launch negotiations for an ambitious Comprehensive Economic Partnership Agreement (CEPA) between India and Canada. The very next day, on November 24, 2025, Global Affairs Canada tabled a Notice of Intent to enter into trade negotiations with India.
On March 2, 2026, India and Canada signed the Terms of Reference (ToR) for CEPA negotiations in New Delhi, establishing the formal framework, format, frequency, and approach for bilateral discussions. The first round of negotiations concluded by March 28, 2026, signaling strong momentum toward finalizing the agreement.
This marks a significant step forward in the bilateral economic relationship between the two countries, and it carries real implications for the large Indian diaspora in Canada as well as NRI investors with exposure to Indian markets.
What Is a CEPA and Why Does It Matter?
A Comprehensive Economic Partnership Agreement goes beyond a standard Free Trade Agreement (FTA). While an FTA typically focuses on reducing tariffs on goods, a CEPA covers a broader range of economic cooperation areas. These can include trade in goods, trade in services, investment protection, intellectual property, government procurement, regulatory cooperation, and digital commerce.
For NRIs, a CEPA between India and Canada could mean smoother pathways for cross border investment, reduced trade barriers in sectors where they operate, and potentially more favorable conditions for moving capital and services between the two countries. The agreement aims to achieve a bilateral trade target of US$50 billion by 2030, up from the current trade level of USD 8.66 billion in FY 2024-25.
Key Timeline So Far
| Date | Development | |------|-------------|| | November 23, 2025 | PM Modi and PM Carney agree to launch CEPA negotiations | | November 24, 2025 | Canada tables Notice of Intent to negotiate with India | | December 13, 2025 to January 27, 2026 | Canadian public consultation period for stakeholder input | | March 2, 2026 | Terms of Reference (ToR) signed in New Delhi | | March 28, 2026 | First round of negotiations concluded | | Late May or Early June 2026 | Joint Commission on Trade to reconvene in Canada | | Spring 2026 | Minister Piyush Goyal's visit to Canada planned, including Trade and Investment Forum | | 2026 | Target year for CEPA finalization |
The Terms of Reference provide the formal structure that both sides will follow during discussions. A Joint Commission on Trade will reconvene in Canada by late May or early June 2026, accompanied by India's largest-ever business delegation to fast-track CEPA finalization.
Current Bilateral Trade Context
Understanding the baseline helps you see where opportunities lie. As of FY 2024-25:
- Total bilateral trade: USD 8.66 billion
- Indian exports to Canada: USD 4.22 billion
- Indian imports from Canada: USD 4.44 billion
- Canada's market size: 41.65 million people with a GDP of USD 2.34 trillion (PPP, 2025)
Sectors Likely to Be Affected
While the official negotiation documents do not outline all specific sectoral details, CEPA negotiations between major economies typically cover technology, services, agriculture, natural resources, and skilled migration pathways. Based on current trade patterns and announced priorities, NRI investors should keep an eye on several areas.
Energy and Critical Minerals
Energy represents a priority sector in these negotiations. Canada is a major exporter of uranium, liquefied natural gas (LNG), crude oil, and critical minerals essential for clean energy and technology manufacturing. A recent uranium deal valued at C$2.6 million signals growing cooperation in this space. Indian companies in the energy, power generation, and infrastructure sectors that import from Canada could benefit from tariff reductions and preferential access. NRIs invested in Indian energy stocks, power utilities, and infrastructure funds should watch how resource trade provisions develop.
Technology and IT Services
Indian IT companies with significant operations in Canada could benefit from reduced barriers. Companies listed on Indian exchanges that derive revenue from Canadian clients or maintain delivery centers in Canada may see improved operating conditions if the CEPA reduces regulatory friction for services trade. The agreement is expected to include provisions for temporary movement of professionals, which could ease visa and work permit processes for Indian nationals in technology roles.
Natural Resources and Agriculture
Canada is a major exporter of natural resources, including oil, gas, potash, and minerals. Indian companies in the energy and fertilizer sectors that import from Canada could benefit from tariff reductions. NRIs invested in Indian energy stocks, fertilizer companies, or infrastructure funds should watch how resource trade provisions develop in these negotiations.
Both countries have significant agricultural sectors. A CEPA could affect Indian food processing companies, pulse importers, and agricultural commodity traders. India imports a substantial volume of pulses and lentils from Canada, so any tariff changes here could directly impact listed companies in the food and agri space.
Addressing Tariff Asymmetries
One key focus area involves addressing existing tariff imbalances. Canada currently imposes tariffs as high as 125 percent on Canadian automobiles, creating a significant barrier for Indian automotive exporters. CEPA negotiations aim to reduce such asymmetries, which could open new opportunities for Indian automotive and auto component manufacturers.
Financial Services and Investment
Investment protection clauses in a CEPA could make it easier for NRIs in Canada to invest in Indian markets and for Indian companies to raise capital or establish operations in Canada. CEPA agreements typically include investor-state dispute settlement (ISDS) provisions that protect investors on both sides. This is particularly relevant for NRIs who hold investments in Indian mutual funds, ETFs, REITs, and InvITs, or who plan to invest directly in Canadian businesses or real estate.
What This Means for NRI Investors in Canada
Portfolio Impact
NRIs who invest in Indian equities through Portfolio Investment Scheme (PIS) accounts or mutual funds should monitor which sectors get covered under the CEPA. Trade agreements often create tailwinds for export oriented companies and sectors that benefit from reduced import costs. Indian pharma companies, IT services firms, manufacturers with Canadian market exposure, and energy sector companies could see positive sentiment if negotiations progress well.
Once detailed negotiation outcomes are announced, Indian companies with significant Canadian operations or export exposure may see stock price movements. Companies in sectors like IT consulting, generic pharmaceuticals, agricultural exports, and energy infrastructure could benefit from improved market access and lower trade costs.
Direct Business Opportunities
NRIs running businesses in Canada that trade with India could benefit from streamlined customs procedures, reduced tariffs, mutual recognition agreements, and regulatory harmonization that often form part of a CEPA. If you operate in consulting, technology, education, professional services, energy, or critical minerals, the relevant chapters of the agreement will be especially important.
The planned Trade and Investment Forum during Minister Piyush Goyal's spring 2026 visit to Canada will provide opportunities for Indian businesses and NRI entrepreneurs to engage directly with Canadian counterparts and understand specific sectoral opportunities as they emerge.
Remittances and Capital Flows
While a CEPA does not directly change RBI rules on remittances under the Liberalised Remittance Scheme (LRS) or FEMA regulations, improved bilateral economic relations often lead to better banking corridors and potentially lower transaction costs for moving money between the two countries. Enhanced investment protections and regulatory alignment could also facilitate smoother capital flows for NRIs investing in both countries.
Strategic Context for NRI Investors
The urgency around CEPA finalization reflects broader geopolitical and economic considerations. Global risks including potential US tariffs and China tensions make Canadian market access increasingly valuable for Indian companies seeking diversification. For NRIs, this means the CEPA represents not just a bilateral opportunity but a strategic positioning within a shifting global trade landscape.
Important Caveats
These negotiations are progressing but remain incomplete. While the first round concluded by March 28, 2026, and momentum is strong with the Joint Commission reconvening in late May or early June 2026, no finalized CEPA text has been released yet. Trade agreements of this scope typically involve multiple rounds of negotiations before reaching a final agreement.
The negotiation documents do not yet provide specific details on tariff schedules, sector exclusions, investment thresholds, or rules of origin. NRIs should check the official circular and subsequent notifications from the Ministry of Commerce and Industry (commerce.gov.in) and PIB (pib.gov.in) as negotiations progress for concrete details.
Investment decisions should not be based solely on anticipated trade deal outcomes. These negotiations can take unexpected turns, and final agreements often look quite different from initial proposals.
How to Stay Updated
NRIs interested in tracking these negotiations should monitor the following official sources:
- Press Information Bureau (PIB): pib.gov.in for official press releases on negotiation rounds and outcomes
- Ministry of Commerce and Industry: commerce.gov.in for trade policy updates, negotiation documents, and tariff schedules as they are finalized
- Ministry of External Affairs: mea.gov.in for bilateral relationship developments and high-level announcements
- Global Affairs Canada: For the Canadian side of the negotiations and any further public consultations or official updates
Bottom Line
The India Canada CEPA negotiations represent a meaningful development for the estimated 1.8 million plus Indian diaspora in Canada. The signing of Terms of Reference on March 2, 2026, and the conclusion of the first negotiation round by March 28, 2026, demonstrate that discussions are moving forward with real momentum toward finalization in 2026.
While concrete investment implications will only become clear as negotiations advance and specific chapters take shape, NRI investors should start thinking about which parts of their Indian portfolio could benefit from deeper India Canada economic integration. Keep your eyes on energy and critical minerals, technology and IT services, natural resources, agriculture, and financial services as the sectors most likely to feature prominently in these talks.
The planned Joint Commission meeting in late May or early June 2026 and Minister Piyush Goyal's spring visit to Canada will likely bring significant announcements about sector-specific outcomes and tariff reductions. NRIs holding investments in bilateral trade-exposed assets should monitor these developments closely.
As always, do not make investment decisions based solely on anticipated trade deal outcomes. Stay informed through official government sources and consult your financial advisor before repositioning your portfolio.