For more than a decade, Canada and India have circled a trade agreement that economists say could reshape both nations' economic futures — yet politics, human rights tensions, and diplomatic missteps have kept the deal just out of reach. In 2022, with Western nations recalibrating their relationships across Asia in response to China's rise, the two countries resumed talks with renewed urgency, pursuing a smaller interim agreement as a first step toward something larger. The moment reflects a familiar tension in international affairs: the difficulty of separating the pragmatic logic of commerce
Business groups push Ottawa to finalize India trade deal after 12-year stall
Trade is just too important for them to put on the back burner
Mark
Why has this taken twelve years? What's been holding it up?
Mimi
The source doesn't spell out the specific sticking points, but it mentions that an early progress agreement will "avoid contentious trade-related issues that would require more time to negotiate." So there are clearly things both sides find difficult to resolve.
Luke
That's the key gap here—we know negotiations stalled, but we don't know why. Was it tariffs? Agricultural products? Labor standards? The report doesn't say.
Mark
And now they're suddenly moving again. What changed?
Mimi
India seems to have shifted its posture on trade generally. It's negotiating with the UK and the EU now too. There's also the geopolitical angle—the West wants closer ties with India as a counterweight to China.
Luke
But the economist quoted also points out that the real driver on Canada's side might be the Indian diaspora vote, especially in the Greater Toronto Area. That's political, not economic.
Mark
So this could be about winning an election as much as winning a trade deal?
Mimi
Possibly. Dehejia suggests Trudeau has an incentive to claim a win after his 2018 visit went badly. But he also says India genuinely needs trade now—they can't afford to ignore it.
Luke
The human rights issue is the elephant though. Modi's government faces serious criticism for surveillance and political prosecutions. How do you square that with a trade deal?
Mimi
Dehejia's answer is compartmentalization—treat the trade agreement as separate from those concerns. Let both governments say relations are improving without resolving the underlying issues.
Mark
Does that actually work?
Luke
The source doesn't tell us. It's a theory, not a proven strategy. And it assumes both sides are willing to look the other way, which isn't guaranteed.
Il Polso
- Twelve years of stalled negotiations have cost Canada measurable ground — even as bilateral trade grew at nearly 12% annually, Canada has been losing market share in India to more decisive competitors.
- A commissioned report puts the stakes in stark terms: a comprehensive deal could add $8.8 billion in annual two-way trade and lift Canada's GDP by 0.25% by 2035, comparing India's current potential to China's two decades ago.
- After Trade Minister Mary Ng's 2022 visit to New Delhi, both governments agreed to pursue a smaller 'early progress' agreement — a tactical workaround designed to build momentum while the harder issues remain unresolved.
- Human rights advocates are watching closely, as India under Modi faces serious criticism for surveilling dissidents, prosecuting political opponents, and refusing to condemn Russia's invasion of Ukraine.
- Economists and diplomats alike warn that Canada's tendency to mix social policy with trade talks — as Trudeau did when he commented on Indian farmer protests in 2020 — risks derailing progress before it begins.
- The deal is now landing at the intersection of economic opportunity and geopolitical strategy, with Canada's forthcoming Indo-Pacific framework signaling that India is no longer a peripheral partner but a central one.
For more than a decade, Canada and India have circled a trade agreement that economists say could reshape both nations' economic futures — yet politics, human rights tensions, and diplomatic missteps have kept the deal just out of reach. In 2022, with Western nations recalibrating their relationships across Asia in response to China's rise, the two countries resumed talks with renewed urgency, pursuing a smaller interim agreement as a first step toward something larger. The moment reflects a familiar tension in international affairs: the difficulty of separating the pragmatic logic of commerce from the moral weight of how a partner nation governs its own people.
Ottawa has been sitting on a significant trade opportunity for over a decade. In August 2022, the Business Council of Canada and the Canada India Business Council released a report urging the federal government to finally conclude a comprehensive economic partnership agreement with India — negotiations that first began in 2010 under Stephen Harper but have been stalled ever since.
The economic case is compelling. Analysis prepared by Ciuriak Consulting describes India as one of Canada's largest untapped trade opportunities, comparing its current trajectory to where China stood twenty years ago. A full agreement, the report estimates, would add $8.8 billion in annual two-way trade and deliver a 0.25% boost to Canada's GDP by 2035. Despite years of bilateral trade growing at nearly 12% annually, Canada has paradoxically been losing market share — and in 2021, India ranked only thirteenth among Canada's trading partners.
After Trade Minister Mary Ng visited India in early 2022, both governments announced a resumption of talks, with a focus on an interim 'early progress' agreement designed to sidestep the most contentious issues while a fuller deal is pursued. Monthly ministerial calls have followed, and a senior government official suggested such an agreement could arrive within months.
The renewed push is inseparable from broader geopolitical currents. As Western nations seek to counterbalance China's influence across Asia, India — the world's fastest-growing major economy — has become strategically indispensable. Canada's forthcoming Indo-Pacific strategy reflects this shift, with the very phrase signaling India's elevated role in Western thinking.
Yet complications persist beneath the surface. Economist Vivek Dehejia of Carleton University notes that domestic politics — particularly the large and influential Indian diaspora in cities like Toronto — give Canadian politicians their own reasons to want a deal. Meanwhile, India under Prime Minister Modi faces serious human rights criticism, has declined to condemn Russia's invasion of Ukraine, and reacted sharply in 2020 when Trudeau publicly supported protesting Indian farmers, accusing Canada of interfering in its internal affairs.
Dehejia's counsel is pragmatic: compartmentalize. Treat the trade agreement as its own achievement, distinct from the deeper disagreements that will not resolve quickly. Whether Canada can hold that line — pursuing economic partnership while navigating moral and diplomatic friction — is the central question now facing both governments.
Ottawa has a trade opportunity it has been sitting on for over a decade. The Business Council of Canada and the Canada India Business Council released a report in August 2022 arguing that the federal government needs to finally seal a comprehensive economic partnership agreement with India—a deal that has been stalled since negotiations began in 2010 under Stephen Harper's Conservative government.
The case for moving forward is economic. Analysis commissioned by the two councils, prepared by Ciuriak Consulting, describes India as one of Canada's largest untapped trade opportunities and compares its current economic position to where China stood two decades ago. The numbers are substantial: a comprehensive trade agreement would increase two-way trade by $8.8 billion annually and deliver a 0.25 per cent boost to Canada's GDP by 2035. Yet despite this potential, Canada has been losing market share in India even as bilateral trade has grown at an average rate of nearly 12 per cent over the past twenty years. In 2021, India ranked as Canada's thirteenth largest trading partner.
After twelve years of stalled talks, there are signs of movement. In early 2022, following a visit to India by International Trade Minister Mary Ng, Canada and India announced they were resuming negotiations. Ng and her Indian counterpart, Piyush Goyal, agreed to pursue an early progress trade agreement—a smaller interim deal that would sidestep the most contentious issues while both sides work toward a full comprehensive agreement. According to a senior government official speaking on condition of anonymity, such an early progress agreement was expected within months. The two ministers have been holding monthly calls to advance the talks.
The timing reflects a broader strategic shift. Western nations, including Canada, are working to deepen political and economic ties across Asia as a counterweight to China. The federal government is preparing to release its Indo-Pacific strategy, a framework designed to expand Canada's reach in the region. Vivek Dehejia, an associate professor of economics at Carleton University, notes that the very term "Indo-Pacific"—replacing the older "Asia-Pacific"—reflects the West's effort to elevate India's prominence, driven largely by concerns about China as a geopolitical threat. From a trade perspective, India's status as the fastest growing major economy makes it an attractive partner.
But there are complications beneath the surface. Dehejia argues that the real driver of Canada-India relations is no longer primarily economic but rather political. The Indian diaspora, concentrated in metropolitan areas like the Greater Toronto Area, represents a significant voting bloc—what he calls a political incentive for the Canadian government to secure a deal and claim it as a win. Prime Minister Justin Trudeau has his own reasons to want success; his 2018 visit to India was marred by controversy over his family's traditional Indian clothing and the invitation of Jaspal Atwal, a convicted attempted murderer, to official events.
India itself appears more open to trade negotiations than it has been historically. It is pursuing a free-trade agreement with the United Kingdom expected to conclude in fall 2022 and has revived trade talks with the European Union. "Trade is just too important for them to put that on the back burner," Dehejia observed. Yet Canada must navigate a minefield of human rights concerns. Indian Prime Minister Narendra Modi has faced widespread criticism, including from Human Rights Watch, for subjecting critics to surveillance, politically motivated prosecutions, harassment, and the suppression of activist groups. India has also refused to condemn Russia's invasion of Ukraine, citing long-standing diplomatic ties with Moscow and dependence on Russian weapons.
The path forward requires careful diplomacy. In 2020, when Trudeau expressed support for protesting Indian farmers, the Indian government responded sharply, accusing Canada of interference in its internal affairs. Dehejia cautioned that mixing social policy with trade negotiations has backfired before and that both governments would be wise to compartmentalize—to treat the trade agreement as a separate achievement that signals improving bilateral relations, even as deeper disagreements persist. The question now is whether Canada can secure a deal while maintaining that separation.
Citazioni salienti
India is one of Canada's largest untapped trade opportunities, comparable to where China was two decades ago— Business Council of Canada and Canada India Business Council report
For negotiations to succeed, both governments should compartmentalize the trade agreement and use it to signal improving relations— Vivek Dehejia, associate professor of economics at Carleton University
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Economy & Finance