Business groups push Ottawa to finalize India trade deal after 12 years of stalled talks

For twelve years, a trade agreement between Canada and India has sat in negotiation limbo. Talks began in 2010 under Stephen Harper's Conservative government and have produced nothing concrete since. Now, as Western nations scramble to strengthen their economic footing in Asia and reduce dependence on China, Canadian business groups are pressing Ottawa to finally seal the deal.

In early August 2022, the Business Council of Canada and the Canada India Business Council released a report commissioned by economic analysts at Ciuriak Consulting. The document makes a straightforward case: India represents one of Canada's largest untapped trade opportunities, with an economy that resembles where China stood two decades ago. The numbers are compelling. While bilateral trade has grown at nearly 12 percent annually over twenty years, Canada has steadily lost market share. A comprehensive economic partnership agreement, the report argues, would reverse that trend—adding $8.8 billion in annual two-way trade and boosting Canada's GDP by 0.25 percent by 2035.

The timing is not accidental. After years of stagnation, Canada and India announced in early 2022 that negotiations were resuming. International Trade Minister Mary Ng traveled to India and met with her counterpart, Piyush Goyal. The two agreed to pursue an early progress trade agreement first—a smaller, interim deal that would sidestep the thorniest issues while both sides worked toward a full comprehensive agreement. Since that visit, the ministers have held monthly calls to advance the talks. According to a senior government official speaking anonymously, an early progress agreement is expected within months.

The push for a deal sits within a larger strategic shift. The federal government is preparing to release its Indo-Pacific strategy, designed to expand Canada's political and economic reach across the region. Vivek Dehejia, an economist at Carleton University who studies India's development, notes that the very term "Indo-Pacific"—replacing the older "Asia-Pacific"—reflects Western efforts to elevate India's profile as a counterweight to China. From a purely economic standpoint, India's status as the world's fastest-growing major economy makes it an obvious target. Yet the relationship remains modest in scale. In 2021, India ranked as Canada's thirteenth-largest trading partner.

Dehejia identifies a more potent force driving the relationship: Canada's Indian diaspora, concentrated in cities like Toronto, which he describes as swing voters with political weight. That demographic reality gives Prime Minister Justin Trudeau an incentive to claim a trade victory. It also explains why the 2018 visit to India—marred by Trudeau's family wearing traditional Indian clothing and the controversial invitation of a convicted attempted murderer to official events—still casts a shadow.

India itself has begun opening to trade negotiations after years of resistance. The country is pursuing agreements with the United Kingdom, expected this fall, and has revived talks with the European Union. Dehejia suggests India has recognized that trade cannot remain sidelined. Yet complications loom. Prime Minister Narendra Modi's government has faced sustained criticism for human rights abuses, including surveillance of critics, politically motivated prosecutions, and suppression of activist groups, according to Human Rights Watch. India has also refused to condemn Russia's invasion of Ukraine, citing historical ties to Moscow and dependence on Russian weapons.

Canada's own record on this front complicates matters. In 2020, Trudeau voiced support for Indian farmers protesting government policies, prompting New Delhi to accuse Canada of interference. Dehejia advises that successful negotiations require compartmentalizing trade from social policy—allowing both governments to frame an agreement as a sign of improving relations rather than a capitulation on values. Whether that separation can hold remains an open question as the two nations edge toward a deal.