A new chapter in Canada-India economic relations
As published on Substack
Canada-India relations hit a new high last week. A combination of political momentum, business engagement and new investment has laid a strong foundation for the next chapter in the bilateral economic relationship.
Almost three years to the day after the originally planned Team Canada Trade Mission (TCTM) to India, the largest Canadian business delegation in three decades traveled to the country.
Led by Minister of Foreign Affairs Anita Anand and Minister of International Trade Maninder Sidhu, delegates from Canadian companies used the week to announce new deals and plans to expand in India. Most notably, Fairfax, a Canadian company with a long record of success in the Indian market, received approval to acquire a majority stake in IDBI Bank: a groundbreaking development for a foreign investor in India. McCain Foods, another successful Canadian company, announced plans to acquire part of Falcon Agrifriz Foods’ business and expand its presence in this fast-growing market.
CEPA appears within reach
From a political perspective, the relationship between Canada and India continues to improve. There is growing confidence that negotiations on a Comprehensive Economic Partnership Agreement, or CEPA, are nearing a conclusion. Trade ministers and officials met last week to advance talks that are already moving at an expedited pace.
That momentum should allow leaders to conclude negotiations during Prime Minister Narendra Modi’s visit to Canada December 11-12.
CEPA would be an important achievement and featured regularly in discussions among Canadian and Indian business leaders seeking stronger economic ties. But in the broader context of Canada-India relations, the agreement should be viewed as the beginning, not the end, of the bilateral journey. Parallel negotiations are ongoing on a Foreign Investment Promotion and Protection Agreement. Canadian businesses remain deeply interested in stronger investment protections, making an investment treaty the logical next priority once CEPA is concluded. Canada must also ensure that CEPA is fully implemented and that businesses are equipped to take advantage of the opportunities it creates.
Mumbai is building at remarkable speed
Being on the ground in Mumbai, India’s financial hub, and speaking with state, municipal, policy and business leaders underscored an important consideration for the next stage in Canada-India economic relations: India is an incredibly diverse country, and each state and region requires its own focus and strategy.
For instance, the State of Maharashtra is developing a deep-water port capable of handling the largest vessels and planning an offshore airport to provide better connectivity to global markets. It is also focused on developing strategic sectors such as critical minerals processing and strengthening its services economy. The scale of construction across the state capital Mumbai is remarkable. It is difficult to imagine another city undergoing as much transformation, at such speed and scale, as Mumbai will over the next decade or so.
Business confidence is returning
Foreign capital outflows and weakness in some sectors have challenged India over the past several years. Last week’s investment announcements and expansion plans, however, point to renewed confidence in the country’s economic outlook.
During the TCTM, Indian participants spoke about the need for Canada and India to work more closely so that both countries are less vulnerable to economic coercion. India has faced significant disruptions to its supply chains and trade, and it is actively pursuing reliable partners such as Canada. This was a useful reminder that the bilateral relationship is not only about market access. It is also about diversification, economic resilience and building dependable partnerships in a more uncertain global economy.
Overall, it was a consequential week to be in India as part of Team Canada and in support of the Canada-India partnership. The optimism is justified, but follow-through will be important. Canada must conclude CEPA, pursue a modern investment agreement, implement the trade deal effectively and engage more deliberately with fast-growing states such as Maharashtra. India is building quickly, Canadian capital is already present, and the political relationship is improving. But Canada faces stiff competition from countries and companies that are equally determined to secure a place in this market. The stage is set; the priority now is to convert that momentum into a durable and mutually prosperous economic partnership.
