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India and Canada Pause FTA Talks Amid Strained Ties: What You Need to Know

India and Canada Pause FTA Talks Amid Strained Ties: What You Need to Know
India and Canada Pause FTA Talks Amid Strained Ties: What You Need to Know

In a significant diplomatic development, India and Canada have temporarily halted their negotiations on a bilateral free trade agreement (FTA) known as the Comprehensive Economic Partnership Agreement (CEPA). This pause comes in the wake of growing concerns in India regarding "anti-India activities of extremist elements" within Canada. Here's a closer look at this situation and its implications.


The tension between the two nations escalated after Indian Prime Minister Narendra Modi expressed his concerns about extremist activities during a meeting with Canadian Prime Minister Justin Trudeau on the sidelines of the G20 Summit. The primary cause of the strain in relations has been the activities of pro-Khalistan groups in Canada. To address these issues, India summoned the Canadian envoy and issued a formal demarche.

The Pause in Negotiations

Both India and Canada have decided to temporarily suspend their CEPA negotiations until the political issues that have strained their relations are resolved. A senior Indian government official confirmed this decision, emphasizing that it is a pause rather than a complete break in negotiations. The official stated, "There were certain political developments in Canada on which India has also raised its objection… for the time being (till) these political developments are settled, we have paused the negotiations with Canada."

India's Concerns

India has voiced its concerns about the promotion of secessionism and incitement of violence against Indian diplomats in Canada. It has also raised the issue of posters naming senior Indian diplomats posted in Canada, which surfaced in some areas. India sees a nexus between these extremist forces and organized crime, drug syndicates, and human trafficking.

Canada's Response

Canadian Prime Minister Trudeau, in response to India's concerns, reiterated Canada's commitment to defending freedom of expression and peaceful protest. He also emphasized that the actions of a few should not represent the entire community or Canada as a whole.

Previous Agreements

Before this pause in negotiations, India and Canada had made significant progress. In March 2022, they agreed to re-launch CEPA negotiations and considered an interim agreement, known as the Early Progress Trade Agreement (EPTA). Nine rounds of talks were held until July of the same year, with the last round conducted virtually.

Bilateral Trade Relations

India and Canada share significant trade ties. In 2022, India ranked as Canada's 10th largest trading partner. India's exports to Canada in 2022-23 reached $4.10 billion, up from $3.76 billion in the previous year, while imports from Canada were valued at $4.05 billion, up from $3.13 billion. During April-June of the current financial year, India's exports to Canada amounted to $911.10 million, with imports from Canada worth $990.79 million.

Furthermore, Canadian Pension Funds have invested approximately $55 billion in India, and cumulative Foreign Direct Investment (FDI) from Canada since 2000 stands at about $4.07 billion. Over 600 Canadian companies have a presence in India, with more than 1,000 actively pursuing business opportunities in the Indian market. Indian companies in Canada are involved in various sectors, including Information Technology, software, steel, natural resources, and banking.


The temporary pause in FTA negotiations between India and Canada reflects the seriousness of the concerns raised by India regarding extremist activities. The two countries will aim to resolve these issues before resuming discussions on the CEPA. The outcome of these negotiations will have implications for their trade relations, which have been steadily growing over the years.

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