India

India is the world's fifth-largest economy and fastest-growing major economy (6.8% GDP growth in 2024, IMF), with a population of 1.4 billion representing the single largest consumer market opportunity globally. Total Canada-India bilateral goods trade reached approximately $13.5B CAD in 2024 (StatCan), ranking India approximately eleventh among Canada's trading partners: a figure that significantly understates the economic relationship when diaspora remittances, services trade ($16.1B CAD, India is Canada's third-largest services trading partner), and educational flows are included. The bilateral commercial relationship is real and growing, concentrated in Canadian agri-food exports (pulses, potash) and Indian pharmaceutical and textile exports to Canada. The government-to-government relationship was severely strained following the June 2023 assassination of Hardeep Singh Nijjar in Surrey, BC, and the Canadian government's allegation of Indian government involvement. India expelled Canadian diplomats; Canada reduced its diplomatic presence in India. The CEPA (Comprehensive Economic Partnership Agreement) negotiations launched in 2022 were paused in September 2023 following the diplomatic fallout, but formally resumed in November 2025. Prime Minister Carney's visit to New Delhi (February 27 to March 2, 2026) produced a signed Terms of Reference for CEPA on March 2, 2026; Round 2 concluded in New Delhi on May 4 to 8, 2026; Round 3 is scheduled in Ottawa in July 2026. The two governments have set a target of $50B CAD in bilateral trade by 2030. CEPA conclusion remains the most consequential near-term trade policy variable in the bilateral relationship: a concluded agreement would be transformative given the complementarity of the two economies.

Narendra Modi's BJP-led National Democratic Alliance won the May/June 2024 general election for a third consecutive term, but with a reduced BJP seat count that increased the coalition's dependence on smaller NDA parties. This makes trade liberalization (already not a BJP priority) even less likely to drive near-term policy change. Modi's economic policy has emphasized domestic manufacturing (Make in India), import substitution, and strategic autonomy, a posture that complicates FTA negotiation with any partner and particularly with Canada given the diplomatic context.

The Hardeep Singh Nijjar case created the most serious rupture in Canada-India diplomatic relations since independence. India expelled six Canadian diplomats in October 2023, and Canada reduced its diplomatic presence in India to a skeleton mission. The commercial relationship continued through the freeze: trade in agri-food and pharmaceuticals did not stop. Prime Minister Carney's state visit to New Delhi (February 27 to March 2, 2026) produced a tangible normalization signal: the signing of a CEPA Terms of Reference on March 2, 2026, formally relaunching trade negotiations. Round 2 of CEPA talks concluded May 4 to 8, 2026 in New Delhi; Round 3 is scheduled in Ottawa in July 2026. Government-to-government facilitation (TCS market entry support, EDC financing) is rebuilding as diplomatic staffing normalizes following the Carney visit, and the trajectory of the bilateral relationship has reversed from the 2023 nadir.

India's 6.8% GDP growth in 2024 makes it the fastest-growing G20 economy by a wide margin, driven by domestic consumption, infrastructure investment, and services exports. India's middle class is expanding rapidly, adding over 25 million middle-income households per year. The IMF projects India will become the world's third-largest economy by GDP (nominal) by approximately 2027, overtaking Japan and Germany. This trajectory makes India a structurally important long-term market for Canadian businesses regardless of the current diplomatic difficulties.

India's structural economic risks include high youth unemployment, infrastructure gaps that constrain manufacturing competitiveness, fiscal pressures from subsidy programs, and currency vulnerability. The INR has depreciated against the CAD, making Indian goods cheaper in Canadian markets but Canadian exports more expensive in India, a dynamic that affects agri-food competitiveness in the Indian domestic market.

Top 5 Canadian exports to India: Pulses (lentils, chickpeas) at approximately $1.5B+; Canada supplies approximately 65% of India's lentil imports, making this the single most Canada-concentrated commodity in the bilateral relationship; coal and mineral fuels approximately $1.2B; potash approximately $0.9B, where India is one of the world's largest fertilizer users; scrap metals approximately $0.4B; aerospace approximately $0.3B. Canada's export profile to India is dominated by agricultural inputs and resources, not finished goods or services.

Top 5 Canadian imports from India: Pharmaceuticals at approximately $2.1B; India is the world's largest generic drug exporter and Canadian hospitals and pharmacies depend substantially on Indian-manufactured generics; apparel and textiles approximately $1.4B; machinery approximately $0.9B; chemicals approximately $0.7B; iron and steel products approximately $0.5B. India runs a trade surplus with Canada primarily through manufactured goods and pharmaceuticals against Canadian commodity exports.

Services trade: Bilateral services trade reached approximately $16.1B CAD in 2024, making India Canada's third-largest services trading partner. The services relationship is driven by Indian IT and business process outsourcing to Canadian clients, Canadian financial and professional services exported to India, and substantial flows in travel, education, and insurance services. Services trade significantly understates the commercial relationship in traditional goods trade rankings and has continued growing through the diplomatic difficulties that constrained government-to-government commercial facilitation.

India's non-tariff barriers are extensive and well-documented: complex FDI restrictions with sector-specific foreign ownership caps (in media, insurance, defence manufacturing), mandatory local content requirements, opaque regulatory approval processes often requiring extensive local legal support, sanitary and phytosanitary requirements on agri-food that are frequently applied inconsistently, and intellectual property protection that falls below the standards required for Canadian technology and pharmaceutical companies to confidently enter the Indian market. These barriers exist independent of the diplomatic dispute and will not be resolved without a concluded trade agreement.

Bombardier maintains an active commercial relationship with Air India, one of the world's fastest-growing airlines following its privatization and acquisition by the Tata Group, as a business jet manufacturer, though the defence aerospace dimension of the bilateral relationship is constrained by the diplomatic context. SNC-Lavalin (now AtkinsRealis) operates an engineering and project management business in India through its Atkins division, working on infrastructure and industrial projects in a market with enormous infrastructure investment demand. The major Canadian banks (RBC, TD, Scotiabank, BMO, CIBC) maintain representative offices and correspondent banking relationships in Mumbai, Delhi, and other financial centres, but operate under Indian foreign bank restrictions that limit retail and full commercial banking operations; none has achieved the scale of operations in India that they have in the US or UK. Shopify serves a large and rapidly growing base of Indian merchants through its global platform, a services relationship that operates entirely through digital channels without requiring physical Indian presence. Multiple Canadian pension funds (CPPIB, Ontario Teachers, OMERS) have made private equity and infrastructure investments in India through their Asian investment programs, despite the bilateral tensions at the government level. The Indian diaspora in Canada, estimated at over 1.4 million people, creates substantial remittance, travel, and consumer goods flows that are economically significant but not captured in goods trade statistics.

India's consumer market exceeded $2T USD in retail spending in 2024, driven by an urban middle class of approximately 300 million people adding over 25 million middle-income households annually. For Canadian exporters, the most commercially accessible entry points are premium food products (Canadian canola oil, maple syrup, and Canadian-origin packaged goods carry genuine premium positioning among India's affluent urban consumers), professional services, and educational goods and services. Without a concluded CEPA, Canadian consumer exports face Indian import duties averaging 15 to 40% depending on category, compressing margins and limiting the economics of direct export relative to local manufacturing or licensing approaches.

E-commerce is reshaping Indian retail faster than in most comparable markets. Flipkart (Walmart subsidiary) and Amazon India together control approximately 65% of the organized e-commerce segment. For Canadian consumer brands, these platforms provide lower-capital market access than physical retail but require local registered presence, GST compliance, and competitive pricing against domestic Indian brands at a structural tariff disadvantage. The modern retail channel (organized supermarkets and hypermarkets) accounts for approximately 12% of total Indian retail; most consumer sales pass through kirana (small independent) stores, which require local distribution partners to reach effectively. Canadian companies that have succeeded in Indian consumer markets have typically entered through diaspora-connected distributors who understand both Canadian brand positioning and Indian retail economics.

Canada has the largest Indian diaspora community of any country outside the United States, with approximately 1.8 million people of Indian origin (including recent immigrants, second-generation Canadians, and the broader community of Indian international students) resident in Canada as of the 2021 census.^D1 This community is concentrated in the Greater Toronto Area (Brampton, Mississauga, north Toronto), Metro Vancouver (Surrey, Burnaby), and Calgary. It spans every socioeconomic stratum, with significant representation in the medical, legal, technology, and financial services professions as well as in small business ownership, particularly in the agri-food processing, retail, and transportation sectors.

Canada's 1.8 million Indian-origin residents constitute the most efficient India market entry infrastructure available to Canadian businesses: more current, more sector-specific, and more practically useful than formal government trade support in most categories. An estimated 200,000 Indian-Canadian business owners and senior professionals maintain active commercial relationships in India spanning technology, manufacturing, real estate, financial services, and agri-food processing. These networks operated independently of government-to-government relations and continued to facilitate bilateral commercial activity through the 2023 to 2025 diplomatic freeze.

The Indo-Canada Chamber of Commerce (ICCC), established in 1977, is the primary institutional channel. Chapters in Toronto, Vancouver, and Calgary provide member introductions, sector working groups, and trade mission coordination. ICCC maintains active relationships with India's Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI), providing Canadian company delegations with direct access to Indian industry association networks. For Canadian SMEs, ICCC membership provides more immediate India market access than approaches through government channels, and complements TCS India as diplomatic channels are restored. iccc.com

Remittance flows from Canada to India are estimated at $3.5 to $4B CAD annually, concentrated in corridor geographies from Punjab (Brampton-to-Amritsar), Gujarat (Toronto-to-Ahmedabad), and Kerala (Vancouver-to-Kochi). These flows are an indicator of commercial network depth: companies that understand these corridor geographies understand the distribution of Indian-Canadian commercial decision-makers who can provide in-market support.

Indian international students represent a separate and quantitatively large dimension of people flows. Canada became the top destination globally for Indian students in 2022 and 2023, with over 300,000 Indian nationals on study permits in Canada at peak. Federal government changes to study permit caps and post-graduation work permit eligibility in 2024 reduced these flows, but Canada remains a top destination. The commercial significance: Indian students in Canada are a direct revenue source for Canadian post-secondary institutions, and many remain in Canada under immigration pathways, contributing to the diaspora and to the Canadian labour market.

India's business culture has practices that differ materially from Canadian norms and that directly affect commercial timelines and outcomes. Relationship investment before transaction is structural, not optional: senior Indian executives rarely authorize significant decisions with counterparties they have not met and assessed in person. Canadian companies that approach India on North American deal timelines typically fail to convert genuine business interest into signed agreements. Two to three in-person visits over six to twelve months before a material commercial relationship closes is a reasonable expectation, not a negotiation failure.

Key practices: Decision-making authority is concentrated at the top of Indian organizations; middle management rarely has transactional sign-off authority. Price negotiation is expected at all stages, including after written proposals are submitted; initial quotes are opening positions. WhatsApp is the primary business communication channel for relationship maintenance between visits. Business cards are exchanged at meeting openings and read carefully; presenting and receiving cards with both hands indicates respect. Punctuality expectations differ: senior Indian executives frequently arrive 15 to 30 minutes after scheduled meeting times; responding with frustration damages the relationship rather than correcting it.

Regional variation is significant. Delhi's business culture is relationship-hierarchy-driven and more formal. Mumbai is faster-paced and more transaction-oriented. Bengaluru's technology sector has a distinctly internationally influenced culture, more familiar to Canadian technology companies than other regional markets. South Indian markets (Chennai, Hyderabad) have distinct commercial networks and operate with less of the North Indian business-family network structure. Major religious and cultural observances (Diwali, Holi, Eid, Dussehra) create extended periods of reduced commercial activity; scheduling business travel around these periods avoids wasted trips.

India receives approximately $5B USD annually in multilateral development bank (MDB) financing, primarily through the World Bank (IBRD) and Asian Development Bank (ADB). Unlike Indian government procurement, MDB-funded projects require competitive international bidding under the relevant institution's procurement framework, giving Canadian companies access to projects that would otherwise be restricted by India's domestic preference requirements. The World Bank's active India portfolio as of Q2 2026 includes urban transport and smart city programs ($2.3B), renewable energy access ($1.8B), and water and sanitation projects ($1.4B). ADB's active India lending supports highway and transport infrastructure, port modernization, and state-level urban development programs.

Canadian companies in engineering, environmental technology, and project management have participated in MDB-funded India projects, particularly in water infrastructure, renewable energy, and municipal finance advisory. The TCS India offices in New Delhi, Mumbai, Bengaluru, and Chennai can provide guidance on active MDB procurement pipelines in specific sectors. IFC (World Bank Group's private sector arm) actively co-finances private infrastructure and energy projects in India; these co-financed projects also use international competitive procurement. EDC provides political risk insurance and buyer credit financing for Canadian companies supplying goods and services to MDB-funded India projects.

India presents a significant corruption and compliance risk for Canadian companies. Bribery risk is elevated across regulatory touchpoints: customs clearance, licensing, environmental and construction permits, and government procurement, particularly at subnational government level where enforcement of India's Prevention of Corruption Act (PCA) is uneven. Canadian companies are subject to CFPOA obligations and should conduct enhanced due diligence on agents, distributors, and local JV partners in India. The India-Canada CEPA negotiations make this a high-priority market, but the compliance overhead of operating in India is material and should be factored into market-entry business cases.

PEP screening should be applied to state-owned enterprise counterparties (ONGC, Coal India, SAIL, BHEL, Air India under Tata) and to counterparties with close political connections in infrastructure and defence sectors. India is not FATF-listed. The large diaspora connection reduces some operational risks but does not eliminate compliance exposure. CTI rates India High Compliance Risk requiring a documented CFPOA program, enhanced agent due diligence, and periodic compliance training for in-market staff.

For Canadian businesses considering or expanding into India, three entry points provide the most direct access to market intelligence, financing, and partner introductions. These are not the only resources, but they are the most efficient starting sequence given the complexity of the Indian market and the current diplomatic constraints on government-facilitated introductions.

Without a concluded CEPA or bilateral investment treaty, Canadian companies have no preferential access to Indian government procurement. India is not a signatory to the WTO Government Procurement Agreement (GPA), which means WTO rules do not provide the procurement market access disciplines that apply in CETA or CUSMA markets. Indian public procurement is large: central and state government spending exceeds $400B USD annually, but it is effectively closed to foreign bidders in most sectors through domestic preference requirements and opaque tendering processes.

1. Statistics Canada, Table 12-10-0011-01: International merchandise trade by country, 2024 annual data.
2. International Monetary Fund, World Economic Outlook, October 2024: India GDP, growth, inflation data.
3. Centre for Monitoring Indian Economy (CMIE): India unemployment data, 2025.
4. Reserve Bank of India (RBI): Monetary policy, inflation, currency data, 2024–2025.
5. Global Affairs Canada, Chief Economist Branch: Canada-India bilateral trade analysis, 2024.
6. Canada's Indo-Pacific Strategy, Global Affairs Canada, November 2022: India bilateral priorities, $750M envelope.
7. Government of Canada, CEPA negotiation updates: pause announcement, September 2023.
8. Moody's Investors Service / S&P Global Ratings: India sovereign credit rating, 2024.
9. Government of Canada, Travel Advisory: India: current advisory text and rationale.
10. Trade Commissioner Service, India Country Market Reports: sector analysis, 2024–2025.
D1. Statistics Canada. (2022). 2021 Census of Population: Immigration and ethnocultural diversity. Reports on population of Indian origin in Canada, geographic distribution, and socioeconomic characteristics. statcan.gc.ca