Canada and India have officially moved to restart formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA). The talks, which were paused in late 2023 due to diplomatic tensions, are accelerating as part of Prime Minister Carney’s strategy to diversify Canada’s trade beyond the United States.
Formal negotiations are expected to commence in March 2026. Both countries are currently finalizing the scope and modalities for the talks, with a target to have the terms ready by February.
The Canadian government has just concluded their public consultation process to inform its negotiating position. Cosmetics Alliance submitted comments on behalf of our members and industry. CA’s comments can be found HERE.
CA has suggested including sector annexes to provide for greater cooperation and certainty on regulation and non-tariff barriers. As well, sector annexes draw greater industry attention to the agreement as well as greater use of the agreement. Consequently, we have suggested that the Cosmetics Annex in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can serve as a working template for discussion about an annex for our sector. Members may recall that our industry internationally was very engaged in its drafting and it already has broad industry support.
Indian High Commissioner Dinesh Kumar Patnaik has expressed confidence that a deal could be finalized within a year of starting, potentially by early 2027.
Key Developments to Expect in 2026
- Prime Minister Mark Carney is likely to visit New Delhi in early March to solidify the trade pivot.
- During this visit, the two nations are expected to sign several “smaller” agreements in critical sectors, including:
– Energy: A potential 10-year, C$2.8 billion uranium supply deal.
– Technology: Pacts covering AI, quantum computing, and the environment.
– Resources: Agreements on critical minerals, crude oil, and LNG transactions. - Both nations are moving with a renewed sense of urgency to protect their economies from global trade volatility, specifically citing recent U.S. tariff threats as a catalyst for deeper bilateral cooperation.
Background on the Pause
Negotiations were previously suspended in September 2023 following allegations of Indian government involvement in the death of a Canadian citizen. After a two-year impasse, both leaders agreed to relaunch the process at the G20 Summit in November 2025. Unlike previous attempts that focused on a limited “early progress” agreement, the current talks aim for a full Comprehensive Economic Partnership Agreement.
Other Consultations Underway
CA has also provided comments on potential free trade agreements between Canada and the Mercosur region, Thailand, the United Arab Emirates. Our comments were consistent with our submission regarding India (as per the link shared above).
