Can Mark Carney’s trip unlock CEPA & repair strained Canada-India ties?
Canadian official Mark Carney visits India to strengthen strategic ties. This visit follows a diplomatic thaw and aims to finalize the Comprehensive Economic Partnership Agreement. The agreement, under negotiation since 2010, is crucial for boosting bilateral trade. Both nations seek to diversify economic partnerships and build resilience.
Mark Carney s visit to India this week will offer a chance to turn a diplomatic thaw into strategic renewal. This will be Carney’s third meeting with Narendra Modi in 10 mths – extraordinary, for two countries that, until late 2024, were mired in mutual suspicion, exchanging recriminations, expelling diplomats and allowing political rhetoric to spill over into business and mobility.
The stars had begun to realign from rupture to reset when Carney and Modi met in Alberta last June. The next logical step – renewal – should now be anchored in the rapid conclusion of the long-pending Comprehensive Economic Partnership Agreement (CEPA), under negotiation since 2010, but repeatedly derailed by political turbulence.
The 2023-24 diplomatic crisis left deep institutional scars. Trust collapsed after Canada accused India of ‘transnational repression’ and electoral interference, even as India argued that Ottawa offered undue space to extremist actors. Repair began through sustained diplomatic engagement in 2025.
NSA Ajit Doval’s February visit was pivotal. By placing contentious issues inside a structured security mechanism, both sides depoliticised them. A joint work plan has created space for collaboration aimed at addressing transnational crime and, potentially, degrading infrastructure that sustains Khalistani extremism.
The ‘Trumpian shock’ forced Ottawa to rethink its strategic anchors. Justin Trudeau’s departure and Carney’s rise brought a mandate to mitigate the existential risk of a volatile US, while diversifying Canada’s relationships. Rebuilding ties with India, therefore, became geopolitical imperative. Shared vulnerabilities in the face of tariff weaponisation helped both sides rediscover pragmatic common ground.
Carney arrives in India today, already the poster boy of a new ‘middle-powers resistance.His Davos message, urging middle powers to stitch together new networks of trust in an era of collapsing guard rails, resonates differently in New Delhi. India has long felt that ‘rules-based order’ has been unevenly applied – its fraying appears less a breakdown than long-overdue correction of major-power exceptionalism.
Yet, this divergence may well enable alignment. India and Canada value sovereignty, resilience and strategic autonomy. Both are hedging against uncertainty in Washington. Both have become active deal-makers – India has concluded 9 trade agreements since 2020; Canada has secured deals with the EU, Britain and others while confronting an unpredictable Canada-US-Mexico Agreement (CUSMA) review. For India, Canada remains the last G7 economy it gets a deal with.
Carney’s recent visit to China underscores a new realpolitik. Despite fallout of the 2018 detention of Canadians Michael Kovrig and Michael Spavor, and lingering election interference concerns, Canada secured a mini-trade deal and a strategic partnership with Beijing. Now, with Trump tariffs reimposed at 10% from Tuesday after the Supreme Court verdict – while White House works to update this rate to 15% as announced by Trump last Saturday – India and Canada are re-evaluating their postures.
When Modi and Carney agreed in 2025 to relaunch CEPA negotiations – with a target of doubling bilateral trade to $50 bn by 2030 – the moment felt ripe. Carney’s visit widens that opportunity. Canada urgently needs to diversify beyond its near-total reliance on the US, which absorbs 98% of its energy exports and about three-quarters of goods trade. Its ambition to ensure that half its trade is non-US aligns with India’s trajectory as the world’s fastest- growing major economy, and top future market for energy, digital services and infra.
A well-crafted CEPA could provide a stable framework for trade, investment and mobility, and ensure a tailwind for business. It could facilitate deals in uranium supply, LNG and critical minerals, while lowering trade barriers and easing project timelines.
Even with political turbulence, Canadian institutional investors – ‘Maple 8’ pension funds and firms like Brookfield and Fairfax – remained steadfast. Their investments in Indian airports, logistics, RE and urban infrastructure have crossed $100 bn. This figure could triple by 2030, with an assist from CEPA that provides predictable protections in taxation, dispute resolution and exit pathways, even as Indian IT and engineering firms are expanding strongly in Canada.
An accelerated CEPA, fast-tracked in 2026, with an interim understanding by mid-year, will stand as a symbol of the new partnership. This agreement, paired with sectoral breakthrough deals in critical minerals, uranium, defence and AT, can redefine the next decade of bilateral engagement, and live up to the promise of the strategic partnership India and Canada have had on paper since 2015.
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This article was first published by The Economic Times.