Comprehensive Economic Partnership Agreement (CEPA)
Indian Economy
- PYQs7
- Articles1
Background
Understanding India's trade policy, its strategy for economic integration with global partners, and the implications of such agreements on various sectors of the Indian economy.
Comprehensive Economic Partnership Agreements (CEPAs) are broad free trade agreements between two countries, covering trade in goods, services, investment, and other areas of economic cooperation, aiming to reduce tariffs and non-tariff barriers to boost bilateral trade and economic integration.
Facts & tables
- Objective
- To significantly boost bilateral trade and investment between India and Canada.
- Target
- Finalization by the end of 2026.
- Scope
- Expected to cover goods, services, investment, critical minerals, clean energy, and resilient supply chains.
- Significance
- Aims to contribute to the target of $50 billion in bilateral trade by 2030.
| Type | Reference |
|---|---|
| Conceptual area | International Relations |
| Conceptual area | Indian Economy |
| Body | Role |
|---|---|
| Ministry of Commerce and Industry (India) | Negotiates and implements |
| Department of Foreign Affairs, Trade and Development (Canada) | Negotiates and implements |
Prelims angle
Prelims angle: Factual recall
Prelims angle: Terminology-based question
- Broad FTA covering goods, services, investment.
- Targeted for finalization by end of 2026.
- Aims for $50B bilateral trade by 2030.
- Key instrument for India-Canada economic cooperation.
Treaty = agreement between states; body = institution.
| Year | Framing tags |
|---|---|
| 2025 | Statement-based questions, Factual recall |
| 2023 | Multi-statement analysis, Factual recall |
| 2020 | Conceptual understanding, Multi-statement analysis |
| 2020 | Multi-statement analysis, Conceptual understanding |
| 2017 | Multi-statement analysis, Factual recall |
| 2017 | Factual recall, Terminology-based question |
| 2016 | Multi-statement analysis, Conceptual understanding |
Timeline
-
International Relations
Conceptual area
-
Indian Economy
Conceptual area
-
Prelims 2016
Multi-statement analysis, Conceptual understanding
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2017
Factual recall, Terminology-based question
-
Prelims 2020
Conceptual understanding, Multi-statement analysis
-
Prelims 2020
Multi-statement analysis, Conceptual understanding
-
Prelims 2023
Multi-statement analysis, Factual recall
-
Prelims 2025
Statement-based questions, Factual recall
-
Shaping the next chapter in India-Canada relations
CEPA is a comprehensive free trade agreement between India and Canada, targeted for finalization by 2026, aiming to significantly boost bilateral trade to $50 billion by 2030 by reducing trade barriers across goods, services, and investment.
See also
Past papers
2016–2025 · 6 questions
In the news
Shaping the next chapter in India-Canada relations
CEPA is a comprehensive free trade agreement between India and Canada, targeted for finalization by 2026, aiming to significantly boost bilateral trade to $50 billion by 2030 by reducing trade barriers across goods, services, and investment.
Try these PYQs
Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and
The Broad-based Trade and Investment Agreement (BTIA) is negotiated between India and the European Union (EU).
With reference to the Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?
1. Quantitative restrictions on imports by foreign investors are prohibited.
2. They apply to investment measures related to trade in both goods and services.
3. They are not concerned with the regulation of foreign investments.
Select the correct answer using the code given below:
Statement 1 is correct: The Trade-Related Investment Measures (TRIMS) agreement under the World Trade Organization (WTO) prohibits quantitative restrictions on imports by foreign investors. This means that countries cannot impose conditions like mandatory local sourcing or trade-balancing requirements that distort free trade. Statement 2 is incorrect: TRIMS only applies to trade in goods, not services. The regulation of trade in services falls under the General Agreement on Trade in Services (GATS), not TRIMS. Statement 3 is correct: TRIMS is not directly concerned with the regulation of foreign investments. Instead, it focuses on investment measures that affect trade in goods, ensuring that they do not create barriers to international trade. Hence, option C is the correct answer.
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. Statement 1 is correct. India has ratified the Trade Facilitation Agreement (TFA) of the WTO. This signifies India's official acceptance and implementation of the agreement's provisions. Statement 2 is correct. The TFA is indeed a part of the WTO's Bali Ministerial Package of 2013. This package refers to a collection of agreements reached during the Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia. The TFA was a landmark achievement within this package. Statement 3 is incorrect. The Trade Facilitation Agreement (TFA) came into force in February 2017, not January 2016. It required ratification by two-thirds of WTO members before taking effect.
With reference to the ‘Trans-Pacific Partnership’, consider the following statements:
1. It is an agreement among all the Pacific Rim countries except China and Russia.
2. It is a strategic alliance for the purpose of maritime security only.
Which of the statements given above is/are correct?
Statement 1 is Incorrect: While China and Russia were not part of the TPP negotiations, it wasn't solely focused on Pacific Rim countries. Other economies like Vietnam and Singapore were part of the TPP despite not exactly being on the Pacific Rim. Statement 2 is Incorrect: The TPP was a proposed trade agreement, not a strategic alliance for maritime security. It aimed to reduce trade barriers and promote economic integration among member countries. The TPP negotiations were concluded in 2015, but the agreement was never ratified by all the signatories. The United States withdrew from the TPP in 2017, effectively ending the initiative in its original form. However, some member countries pursued alternative trade agreements based on the TPP framework. Hence, option D is the correct answer.
Consider the following statements :
Statement-I : India accounts for 3.2% of global export of goods.
Statement-II :Many local companies and some foreign companies operating in India have taken advantage of India's 'Production-linked Incentive' scheme.
Which one of the following is correct in respect of the above statements?
* Statement I is incorrect: India's share in global merchandise trade is only 1.8% and 4% in global services. India plans to increase its export share in global trade from 2.1% to 3% by 2027 and 10% by 2047. * Statement II is correct: The PLI scheme is open to both domestic and international manufacturers. Samsung as well as Indian firms such as Dixon Technologies, UTL, Neolyncs, Lava International, Optiemus Electronics and Micromax are also expanding their factories to take advantage of the PLI scheme.
Show 2 more PYQs
Consider the following statements:
I. India has joined the Minerals Security Partnership as a member.
II. India is a resource-rich country in all the 30 critical minerals that it has identified.
III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.
Which of the statements given above are correct?
Critical minerals are essential for modern technologies and clean energy, but many countries, including India, depend on imports for several of them. To strengthen supply chains, India has joined international partnerships and reformed mining laws. ✅ Statement I: Correct India joined the Minerals Security Partnership (MSP) in 2023 to ensure reliable access to critical minerals. ❌ Statement II: Incorrect India is not resource-rich in all 30 critical minerals it has identified and remains import-dependent for several, like cobalt and nickel. ✅ Statement III: Correct In 2023, Parliament amended the Mines and Minerals Act, giving the Central Government power to auction leases for critical minerals.
If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India?
1. Not depending on short-term foreign borrowings
2. Opening up to more foreign banks
3. Maintaining full capital account convertibility
Select the correct answer using the code given below:
Not depending on short-term foreign borrowings: This reduces exposure to capital flight. During a crisis, foreign investors may pull their money out of emerging markets like India, leading to rupee depreciation and financial instability. By limiting short-term foreign borrowings, India can lessen the impact of such capital flight. Opening up to more foreign banks: While this might seem beneficial, it can also increase reliance on foreign capital. During a crisis, foreign banks might be more likely to restrict credit, negatively impacting the Indian economy. Maintaining full capital account convertibility: This allows for the free movement of capital in and out of the country. While it can be beneficial in normal times, it can also exacerbate capital flight during a crisis. Therefore, the most prudent strategy is to reduce dependence on short-term foreign borrowings to minimize the vulnerability caused by potential capital flight. Hence, only statement 1 is correct. Hence, option A is the correct answer.