India, Canada to review trade ties before resuming economic talks in 2026
Former Indian High Commissioner to Ottawa, Ajay Bisaria, felt that there is “no big rush to resume where they left off” with regard to a possible trade deal but the two countries will “instead get into a stocktaking situation”
Toronto: India and Canada will take stock of the trading relationship this year before resuming work on a potential economic partnership next year, experts engaged in the bilateral corridor believe.
As it is, much of the bandwidth in the trade space is being consumed in New Delhi and Ottawa by the mercurial tariff threats emanating from the Administration of US President Donald Trump.
Former Indian High Commissioner to Ottawa, Ajay Bisaria, felt that there is “no big rush to resume where they left off” with regard to a possible trade deal but the two countries will “instead get into a stocktaking situation.”
“While formal trade negotiations may need to wait till early next year, we could see discussions in specific sectors and high-level dialogue and exchanges at the level of ministers and senior officials this fall,” Vina Nadjibulla, vice-president for research and strategy at the Asia-Pacific Foundation of Canada said.
There were several rounds of negotiation towards an Early Progress Trade Agreement between India and Canada before those talks were “paused” by Canada in August 2023, about a month before then Prime Minister Justin Trudeau stated in the House of Commons on September 18 that year that there were “credible allegations” of a potential link between Indian agents and the killing of pro-Khalistan figure Hardeep Singh Nijjar in Surrey, British Columbia, three months earlier. India described those accusations as “absurd” as ties cratered.
{{/usCountry}}There were several rounds of negotiation towards an Early Progress Trade Agreement between India and Canada before those talks were “paused” by Canada in August 2023, about a month before then Prime Minister Justin Trudeau stated in the House of Commons on September 18 that year that there were “credible allegations” of a potential link between Indian agents and the killing of pro-Khalistan figure Hardeep Singh Nijjar in Surrey, British Columbia, three months earlier. India described those accusations as “absurd” as ties cratered.
{{/usCountry}}But the intrusion of Trump has altered the dynamic. As Nadjibulla said, “In terms of a timeframe, what might be feasible this year is a political commitment to resume trade negotiations and a launch of a stock taking process given that much has changed in the global trade landscape and in the economic calculus of both countries in the last two years. We are not talking about picking up discussions from two years ago, the framework for a trade deal has now changed and that needs to be reflected in any resumed negotiations.”
{{/usCountry}}But the intrusion of Trump has altered the dynamic. As Nadjibulla said, “In terms of a timeframe, what might be feasible this year is a political commitment to resume trade negotiations and a launch of a stock taking process given that much has changed in the global trade landscape and in the economic calculus of both countries in the last two years. We are not talking about picking up discussions from two years ago, the framework for a trade deal has now changed and that needs to be reflected in any resumed negotiations.”
{{/usCountry}}Bisaria felt the two sides will make” cautious moves” before resumption of dialogue on a trade agreement, though, in the interim, there will be focus on cooperation in specific sectors like artificial intelligence, critical minerals, LNG and auto parts.
These sectors featured in roundtable discussions held in Ottawa and Toronto last month, organized by the Indo-Canadian Business Chamber or ICBC and featuring officials from both Governments.
“Our suggestion is let us concentrate on niche sectors, which are important for both governments,” ICBC’s CEO Nadira Hamid told the Hindustan Times in July after the roundtable in Toronto.
“In terms of bilateral relations, full re-engagement, including resumption of trade negotiations, will need to be approached gradually and in-line with political signals from both Prime Ministers and key ministers,” Nadjibulla noted.
There has been some movement on the diplomatic front as both countries prepare to appoint High Commissioners in each other’s capitals later this month. On Wednesday, Global Affairs Canada announced that Jeff David will be country’s new Consul General in Mumbai.
However, the arrival of High Commissioners will be necessary for the process to take shape. As Nadjibulla said, “Reappointment of high commissioners and ensuing that Canadian consulates in India are fully staffed would also help and is a necessary step before discussions on a trade agreement can be resumed.”
