Canada-India Free Trade Agreement Negotiations

Additional Background Information

The  former Minister of International Trade, the Honourable Peter Van Loan, launched free trade negotiations with India during his visit to New Delhi on November 16, 2010. At the opening session of these negotiations, Minister Van Loan highlighted the importance of cooperation and creativity in reaching a broad and ambitious free trade agreement. (See News Release: Minister Van Loan Launches Free Trade Talks with India)

The launch of the negotiations was preceded by the September 24, 2010 announcement by Minister Van Loan on the results of a Joint Study on the potential benefits of a Comprehensive Economic Partnership Agreement (CEPA) between Canada and India. The announcement was made in Ottawa together with India’s Minister of Commerce and Industry, Anand Sharma, after the First Annual Ministerial Dialogue on Trade and Investment.

The study’s publication fulfils a commitment made by trade ministers on Novemebr 17, 2009, during Prime Minister Harper’s visit to India, when Canada’s and India’s leaders announced the creation of a Joint Study Group to explore the possibility of a comprehensive economic partnership agreemet and to complete a Joint Study within six months  (News Release – November 17, 2009.)

The Joint Study Group, comprised of Canadian and Indian officials, concluded in the report that there was sufficient common ground to recommend moving ahead with next steps towards negotiation of a comprehensive agreement covering substantially all trade in goods and services; investment; trade facilitation; and other areas of economic cooperation, as a 'single undertaking', leading to additional trade flows and economic gains.

Under Canada’s Global Commerce Strategy, the government is working to advance Canada’s trade interests by opening up new opportunities for Canadian exporters, investors and innovators. The strategy includes an aggressive trade negotiation agenda, aimed at securing competitive terms of access in markets that offer significant potential for our products and expertise. Based on extensive consultation with government, academic and Canadian business and industry representatives, the Government has identified priority markets around the world where Canadian opportunities and interests have the greatest potential for growth. The Government of Canada considers India to be a priority market, and we are delivering on our commitment to strengthen our relationship. In line with enhancing this bilateral engagement, on September 2, 2008, the Canadian Council of Chief Executives and the Confederation of Indian Industry issued a joint report entitled “India and Canada: A New Era of Cooperation” which makes recommendations on how to deepen our bilateral economic relationship.

The Joint Study Group engaged in substantive discussions on the parameters of a possible comprehensive economic partnership agreement. The thrust of the exploratory analysis, together with the Joint Study Group's findings and recommendations, are presented in this Government of Canada and Government of India Joint Study.

The Joint Study Group undertook economic modelling work which confirms the quite substantial and symmetric gains to be achieved through the elimination of barriers to trade. The Canadian modelling exercise estimates gross domestic product gains of 0.4 per cent for Canada and 0.5 per cent for India, which amount to approximately US$6 billion at current gross domestic product levels for each country. India’s modelling exercise, based on different assumptions, produced larger gains (1 per cent of gross domestic product, or US$12 billion for India and US$15 billion for Canada).

Canadian modelling work also shows substantial gains in bilateral trade, for Canada as high as 47 per cent and for India as high as 60 per cent. Canada's gains in exports to India would be widely spread across sectors, ranging from primary agricultural and resources-related products, to chemical products, transport equipment, machinery and equipment and services, while India's leading gains in exports to Canada would be concentrated in textile and apparel products and services.

Now one of the fastest-growing economies on the planet, India is projected to be the world’s third largest economy by 2050. India’s growing population, rising per capita income levels, rapidly expanding manufacturing, high-technology and services sectors, and the associated infrastructure and natural resources requirements make it a tremendous market of opportunity for Canadian companies.

Status of the negotiations

Last updated February 2013.

The seventh round of negotiations toward a Comprehensive Economic Partnership Agreement (CEPA) was held in New Delhi on February 5-6, 2013. Progress was made in most agreed areas of the negotiations. (See News Release: Canada and India Conclude Seventh Round of Negotiations Toward Comprehensive Economic Partnership Agreement)

Since Canada and India announced the start of free trade negotiations towards a CEPA in November 2010, following the release of the Canada-India Joint Study Report, in September 2010, seven rounds of negotiations have been held. The second round was held in Ottawa in July 2011, and the third, fourth and fifth rounds were held in New Delhi in December 2011, February 2012 and July 2012, respectively. The sixth round was held in Ottawa in November 2012. Additional meetings relating to the fifth round were also held in New Delhi in August 2012.

Progress has been made in all agreed areas of the negotiations, including market access for goods, rules of origin, trade facilitation, origin procedures, technical barriers to trade, sanitary and phytosanitary measures, institutional provisions, and trade in services, including temporary entry for business persons, telecommunications, and financial services. The CEPA negotiations remain a key priority in the Government of Canada’s international trade agenda. Canada will seek to conclude negotiations with India by the end of 2013, as reaffirmed by Prime Minister Harper and India’s Prime Minister Singh during the visit of PM Harper to India in November 2012.