Canada has taken an unexpected step by temporarily pausing negotiations for a free trade agreement with India. Both nations will jointly determine when to resume talks in the future, as confirmed by an official statement. However, the official did not provide further details regarding the reasons for this pause.
This development is notable because Canadian Prime Minister Justin Trudeau is scheduled to attend the G20 Summit in India next week. The two countries have engaged in over half a dozen rounds of discussions regarding the trade pact so far. In March of the previous year, negotiations were relaunched for an interim agreement known as the Early Progress Trade Agreement (EPTA). Such agreements typically involve a significant reduction or elimination of customs duties on goods traded between the two nations, along with the liberalization of norms to promote trade in services and attract investments.
The bilateral trade between India and Canada has seen an increase, reaching USD 8.16 billion in 2022-23, up from USD 7 billion in 2021-22. However, some experts believe that the pause in negotiations may not significantly impact Indian trade interests, as a significant portion of Indian products already enter Canada duty-free. Additionally, Indian service sector firms in fields like healthcare and education may not be sufficiently globalized to establish a physical presence in Canada.
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