India and Canada Chart New Economic Course with Investment Treaty Talks and Rs 4.65 Lakh Crore Trade Target

India and Canada have taken a significant step toward mending and expanding their economic relationship, with New Delhi signaling openness to negotiate a Bilateral Investment Treaty and both nations setting an ambitious trade target for the coming decade. The development emerged from the inaugural India-Canada Finance Ministers’ Economic and Financial Dialogue held in Toronto, a first-of-its-kind ministerial engagement between the two countries.

Canada’s Minister of Finance and National Revenue, François-Philippe Champagne, and India’s Minister of Finance and Minister of Corporate Affairs, Nirmala Sitharaman, concluded a productive inaugural India–Canada Finance Ministers’ Economic and Financial Dialogue. The talks were not a standalone event but rather the formal launch of a new institutional channel meant to give the relationship a durable, ministerial-level structure going forward.

At the heart of the discussions was a bold economic ambition. The ministers discussed the mutual benefits of further strengthening bilateral economic and investment ties, to support financial and commercial linkages between India and Canada and support their leaders’ shared aspiration to expand bilateral trade to CAD 70 billion / INR 4.65 lakh crore by 2030. Perhaps the most consequential outcome, though, was on the investment front. India expressed its readiness to initiate negotiations on a Bilateral Investment Treaty at the earliest. Such a treaty would provide legal protections and dispute-resolution mechanisms for cross-border investors, a step widely seen as necessary to unlock larger flows of institutional capital between the two economies.

The dialogue did not happen in isolation. It builds on the commitment made by Prime Minister Mark Carney and Prime Minister Narendra Modi during their meeting in New Delhi in March 2026 to strengthen bilateral economic and financial cooperation, including the shared commitment to conclude Canada-India Comprehensive Economic Partnership Agreement talks by the end of 2026. That broader trade pact, formally known as CEPA, had been paused for years after diplomatic relations between the two countries soured, but negotiations have since been revived as ties have thawed under the new Canadian leadership.

The renewed engagement reflects a broader pattern of re-institutionalizing a relationship that had been strained. India and Canada’s relations were strained for nearly two years, but have begun to recover following the arrival of a new government earlier this year. The Toronto dialogue, alongside investment and business roundtables that Sitharaman co-hosted with Champagne, signals both governments’ intent to move past that friction and rebuild trust through regular, structured engagement rather than one-off announcements.

Beyond the treaty talks, the visit carried substantial commercial weight. Following the ministerial dialogue, Sitharaman and Champagne co-hosted roundtables with top industry executives from Canada’s financial services, FinTech, artificial intelligence, infrastructure, energy, and natural resources sectors. These sector-specific conversations point to where much of the future investment activity is expected to be concentrated, particularly given Canada’s deep pools of pension and institutional capital and India’s appetite for infrastructure financing and asset monetisation.

Trade data underscores both the current scale and the growth potential of the relationship. India-Canada bilateral merchandise trade stood at around USD 8 billion in 2025-26, with India’s exports at USD 4.67 billion and imports at USD 3.28 billion, according to the Ministry of Commerce and Industry. Reaching the newly stated CAD 70 billion target by 2030 would require trade volumes to grow several times over, underscoring just how ambitious the goal is.

Looking ahead, the two sides have committed to making this dialogue a recurring fixture rather than a one-time gesture. The next iteration of the Dialogue is scheduled for 2027. If the momentum from Toronto carries through — on the investment treaty, the CEPA negotiations, and deeper sectoral cooperation — the India-Canada economic relationship could emerge as one of the more notable recovery stories in global trade diplomacy over the next few years.