India offers Canada a bilateral investment treaty to reach C$70 billion in trade

India told Canada on Thursday that it is ready to open talks on a Bilateral Investment Treaty as soon as the two sides can staff them. The offer came at the first Canada-India Finance Ministers’ Economic and Financial Dialogue in Toronto, where Nirmala Sitharaman sat with François-Philippe Champagne.

A joint statement from the two finance ministries said the ministers also restated a target set by Mark Carney and Narendra Modi in New Delhi in March: bilateral trade of C$70 billion, or ₹4.65 lakh crore, by 2030, and a Comprehensive Economic Partnership Agreement finished by the end of 2026. Sitharaman separately said the two countries want a foreign investment protection agreement, the Canadian name for the same kind of treaty, done this year.

The BIT is the piece that was missing. Canadian pension funds already write large cheques in India. They have asked for clearer rules on expropriation, tax and dispute settlement before they add more. India has rewritten its model BIT since 2015 and has been slow to sign new ones. Offering talks now is a signal that New Delhi will put a text on the table rather than wait for the broader trade deal to carry investment protection on its own.

What the ministers put on the list

They discussed energy, infrastructure, finance, the digital economy and critical minerals. They noted that tax relief India already gives long-term foreign investors has helped Canadian funds stay in the market. Sitharaman met Ontario Teachers’ Pension Plan and talked about expanding its work with the National Investment and Infrastructure Fund, including co-investment in transmission, transport, urban projects and renewable power. OTPP already sits in NIIF Infra Fund II.

Roundtables after the formal session brought in Canadian firms from financial services, fintech, artificial intelligence, infrastructure, energy and natural resources. Victor Thomas, president of the Canada-India Business Council, told Business Standard that the visit “lays the groundwork” for the partnership agreement and for a Modi visit to Canada later this year.

Sitharaman is on a trip that runs through Canada and the United States until 2 September. A day earlier she had told Canadian insurers that the foreign-ownership cap in Indian insurance is moving from 74 percent to 100 percent and had pointed them at GIFT City, semiconductors and rare earths. The BIT offer sits next to that pitch. One is about who can own an insurer. The other is about how an investor gets treated if a rule changes after the money is in.

Why the timing is tight

Carney and Modi gave themselves until December for the CEPA. Investment chapters in trade deals often take longer than goods chapters because they touch courts and taxation. Running a standalone BIT in parallel is a way to give pension funds a text they can show their boards before the full trade package is signed.

Canada-India trade is far below the 2030 target. Goods trade has been lumpy, and political rows in 2023–24 froze much of the official calendar. The March meeting in New Delhi was the reset. The finance dialogue is the first new standing channel that came out of it.

A BIT will still have to settle old arguments: whether investors can sue the state in international arbitration, how tax measures are carved out, and what counts as fair and equitable treatment. India’s current model limits investor-state dispute settlement. Canadian funds prefer the older, wider version. Neither minister claimed those gaps had been closed. They claimed only that talks can start.

If the treaty is signed this year, it will be one of the few new Indian BITs of this decade. If it slips, the CEPA deadline in December becomes the next pressure point, and the C$70 billion figure stays a political target rather than a path with legal cover.