India and Canada have taken a significant step toward repairing strained diplomatic ties by agreeing to restart negotiations on a long-pending trade agreement. The announcement came on Sunday after Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney held bilateral talks on the sidelines of the G20 Summit in Johannesburg, South Africa.

According to the Indian Prime Minister’s Office, the two leaders agreed to relaunch talks on an ambitious Comprehensive Economic Partnership Agreement (CEPA). The goal: double bilateral trade to US$50 billion by 2030.

Carney, in a post on X, presented an even more optimistic outlook, stating that the trade deal could help push two-way trade beyond US$70 billion. Highlighting India’s position as the world’s fifth-largest economy, he said the renewed engagement would open “major new opportunities for Canadian workers and businesses.”

Relations begin to thaw
Both countries reaffirmed their commitment to long-term civil nuclear cooperation. They also discussed expanding partnerships, including a potential long-term uranium supply agreement. The resumption of trade discussions signals a broader easing of tensions between the two nations.

Carney, who is also focused on strengthening Canada’s commercial ties with the United States, has pledged to double Canada’s non-US exports over the next decade. India is expected to play a major role in this strategy.

PM Modi’s office wrote that the meeting was “very productive,” adding that both sides agreed to deepen cooperation in trade, investment, technology, innovation, energy, education, defence, and space.

A look at the recent dispute
Trade talks between India and Canada were suspended in 2023 after relations deteriorated when Ottawa accused New Delhi of involvement in the killing of a Canadian Sikh separatist—an allegation India strongly denied. Despite the diplomatic row, trade between the two countries continued to grow, though experts say it remains small compared to India’s economic scale.

Bilateral trade in goods and services is estimated to reach C$31 billion (US$22 billion) in 2024. Much of this advantage lies with Canada, driven by its strong services exports worth C$16 billion. For perspective, Canada’s trade with China in 2024 was nearly four times larger.

India viewed as a reliable partner
Relations began to stabilize in mid-2025 after Modi and Carney met during the G7 Summit in June. Speaking on Sunday, Carney called India a “reliable trading partner,” though he acknowledged that future disagreements are inevitable. Still, he emphasized the strong economic foundation shared by the two nations.

On the sidelines of the G20, Carney also met Brazilian President Luiz Inácio Lula da Silva. Both leaders agreed to accelerate progress on the Canada–Mercosur free trade agreement involving Brazil, Argentina, Paraguay, and Uruguay.