India-Canada FTA on pause till political issues resolve: Sources

PM Modi recently conveyed India’s strong concerns about continuing anti-India activities of extremist elements in Canada during the G20

Nearly a week after the G20 Summit concluded, India-Canada Free Trade Agreement (FTA) negotiations have been paused and will only resume once the issues at both ends settled down, sources told Moneycontrol.

“The India- Canada FTA negotiations have been paused due to certain political developments in Canada, which India has raised objection to and will only be resumed once those issues have been settled,” a source said.

The negotiations were re-launched in March 2022 after India and Canada held the fifth Ministerial Dialogue on Trade & Investment. As many as nine rounds had been conducted between the two countries till July 2023 over this.

As per foreign media, the decision for the pause had originated from Ottawa, when the relations between the two nations were strained following the rise of the Khalistani movement in Canada.

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According to Canadian Press, India’s high commissioner to Canada Sanjay Kumar Verma confirmed that Trudeau’s faction initiated the pause.

"The Canadian side has suggested a ‘pause’ to the ongoing fast-paced negotiations on an early-progress trade agreement with India,” FP quoted Verma as saying in an emailed statement. "Though I am not aware of exact reason(s), most likely, the ‘pause’ will allow more consultations with the stakeholders," he added.

A recent PIB statement, issued on September 10 from the Prime Minister’s office, has  highlighted that PM Modi conveyed India’s strong concerns about continuing anti-India activities of extremist elements in Canada during the G20.

“They are promoting secessionism and inciting violence against Indian diplomats, damaging diplomatic premises, and threatening the Indian community in Canada and their places of worship. The nexus of such forces with organized crime, drug syndicates and human trafficking should be a concern for Canada as well. It is essential for the two countries to cooperate in dealing with such threats,” the statement added.

What is the India-Canada Comprehensive Economic Partnership Agreement?

In 2010, Canada and India conducted a joint study that strongly recommended the benefits of a Comprehensive Economic Partnership Agreement (CEPA) for both countries. The Prime Ministers of the two countries announced the launch of CEPA negotiations in Seoul in November 2010, and the negotiations were formally launched in New Delhi later that month.

Ten rounds of negotiations have been held so far, the most recent being in 2017. In 2020, the two countries held a virtual meeting to discuss the possibility of an early harvest agreement or interim agreement.