India and Canada will start discussions from next week to resume formal negotiations for the proposed free trade agreement, Commerce and Industry Minister Piyush Goyal said on Friday.

In 2023, Canada paused negotiations for the agreement with India after the bilateral relations hit rock bottom following then Prime Minister Justin Trudeau's allegations of a potential Indian link to the killing of Hardeep Singh Nijjar.

"Canada and India are looking at CEPA (Comprehensive Economic Partnership Agreement). Next week, they are going to kick start conversations around that," Goyal said at the Ficci annual general meeting function here.

CEPA is a kind of free trade agreement in which two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms for the movement of skilled professionals and attract investments.

In March 2022, the two countries had re-launched negotiations for an interim agreement. They held over half a dozen rounds of talks on the proposed pact.

India's exports to Canada rose 9.8 per cent to USD 4.22 billion in 2024-25 from USD 3.84 billion in 2023-24. Imports, however, declined 2.33 per cent to USD 4.44 billion in the last fiscal from USD 4.55 billion in 2023-24.

The renewed vibrancy in ties between the two countries followed Prime Minister Narendra Modi's talks with his Canadian counterpart Mark Carney on the sidelines of the G7 summit at Canada's Kananaskis in June.

Bilateral trade in goods and services between India and Canada stood at USD 18.38 billion in 2023.

There are about 2.9 million Indian diaspora and over 4,27,000 Indian students in Canada.