An old maxim has it that there are years when nothing happens and then there are weeks when decades happen.
It is 16 years this month since Canada and India first discussed a Comprehensive Economic Partnership Agreement (CEPA). In 2009, Canada was ranked 10th and India 11th on the world GDP table. India’s GDP was $1.34 trillion and Canada’s was $1.37 trillion. In 2025, Canada has a GDP of $2.23 trillion, ranked 10th, while India at $4.13 trillion is the fifth-largest economy in the world.
There are many explanations for the squandered years—the two nations tried in fits and starts to get the treaty done. Essentially, the saga reeks of short-termism, of electoral math overwhelming rationale, of misplaced notions of liberty, and of statesmanship waylaid by sartorial symbolism.
The infestation of distrust worsened as Canada accused India of ‘foreign interference’. India charged Canada of sheltering Khalistani terrorists who were openly targeting Indian diplomats.
Just a year back, Canada and India expelled diplomats. It seemed the two sides had reached a point of no return.
History tells us events can define or redefine relationships. In February 2025, Donald J Trump arrived as the 47th president of the US. He makes no secret of his dislikes—and Canadian PM Justin Trudeau was one. Trudeau, trailing conservatives, stepped down for Mark J Carney.
Trump also has pet likes—for instance, Canada as the 51st state of the US. And then he imposed tariffs. It was extortion added to insult for a people told by John F Kennedy that theirs was a partnership.
As Trump crossed the undefended boundary, Canadians put up their elbows, resulting in a stunning victory for Carney.
Canada is at an inflection of history, like India was in 1991. Carney, an economist like Manmohan Singh who was elected, but with no high command, declared, “The old Canada-US relationship is over.”
He set about reconfiguring Canada’s economy and worked to repair ties. In a significant signal, he invited Prime Minister Narendra Modi to the G7 in Alberta.
Carney brushed off dissent stating, “India is the fifth-largest economy in the world, the most populous country in the world, and is central to supply chains.”
The meeting between the PMs triggered visits and events—from reinstatement of high commissioners to meetings between the national security advisors. The foreign ministers met in New York, Anita Anand visited Delhi, and then S Jaishankar met Anand in Niagara in Canada. A ministerial dialogue followed in Delhi.
The new mojo produced an ambitious roadmap—to “build strategic partnership across trade, technology, energy, climate action”. Last week, Modi and Carney met again at the G20 in Johannesburg and agreed to restart work on the CEPA.
With the blending of population-scale tech, skilled workforce, investible surplus and entrepreneurship, the timing and the contours of the restart merit attention. Carney is expected to visit India in early 2026, followed by Modi to Canada.
India and Canada will boost supply-chain partnerships in critical minerals and clean energy, and cooperate and invest in AI, aerospace, and skilling education. A new trilateral partnership on technology and innovation between Australia, India, and Canada was signed at the G20 in South Africa.
A new $2.8-billion deal between India and Canada for purchase of uranium is on the anvil. On Friday, Commerce Minister Piyush Goyal announced that formal discussions on the CEPA will begin next week.
The discussions will be between two nations uniquely placed to build on their strengths. In structure and scale, the two economies complement each other. The CEPA affords an opportunity to create long-term deals and out-of-the-box partnerships.
India needs affordable energy. The heavy crude produced in Canada is available at $46.30, as against the Brent that’s at $62. It requires special refining, which India can do up to 270 million tonnes.
Now take the fertiliser sector. Canada holds the world’s largest reserves of potash, and has abundant oil and gas. India, which imports both energy and minerals for producing fertiliser, could craft a programme for Indian companies to produce in Canada, leveraging access to energy and ore, avoiding layering of costs. The output could well be deemed duty-free for India.
Canada is also home to the ‘godfather of AI’ Geoffrey Hinton, Turing awardees, ranked universities, and a buzzing startup space. India has the skills Canada needs and the market to build scale. India is home to the world’s largest population-scale identity and payment systems. Its universities produce engineering and liberal arts graduates in millions.
Two months back, at a global business forum in Alberta, this columnist had suggested Canada could make H-1B visas portable, and offer a pathway to professionals and companies to build innovations in Canada. Earlier this month, Carney announced a new fast-track programme for H-1B visa holders—but it needs a champion.
Indian farmer collectives can adopt and collaborate on precision farming to cut wastage, improve yields, and boost income. Its health sector can deliver globally competitive services, enable scaling of innovations in diagnostics and drug discovery. Last year, four students in Toronto beat multinational companies in a race to build drone-busters. India has over 600 companies making a range of drones—lethal, useful, and built on frugal economics.
Collaboration beckons—from agriculture and AI in medicine to governance. Carney is opening Canada to Canada. India’s experience as one of the oldest continental economies with a robust inter-province trade, supply chains, and an evolved tax system is relevant, and its scholars can throw light on the process of making it work.
Context is critical for success in personal and institutional relationships. To paraphrase Dwight Eisenhower, the key is to keep the doors of consultation always and fully open. “There must never be a final word between friends.”
Read all columns by Shankkar Aiyar
SHANKKAR AIYAR
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)