UPSC Prelims Practice Questions — India, Canada re-commit to seal trade deal by end 2026

Q1. The formal re-launch of negotiations for the Canada–India Comprehensive Economic Partnership Agreement in March 2026 was marked by the signing and exchange, in the presence of the two Prime Ministers, of which one of the following?

  • A. An Early Progress Trade Agreement covering trade in goods and services
  • B. The joint statement of the Ministerial Dialogue on Trade and Investment
  • C. The Terms of Reference for the CEPA negotiations
  • D. A Bilateral Investment Treaty based on the revised Model BIT text

Q2. The Terms of Reference for the Canada–India Comprehensive Economic Partnership Agreement were signed by India's Minister of Commerce and Industry and, on the Canadian side, by the minister holding which one of the following portfolios?

  • A. Foreign Affairs, under whom Global Affairs Canada functions
  • B. Finance and National Revenue, under whom the Department of Finance Canada functions
  • C. Innovation, Science and Industry, which handles investment screening
  • D. International Trade, which leads Canada's trade negotiations

Q3. The first-ever India–Canada Finance Ministers' Economic and Financial Dialogue, held in August 2026, took place in which one of the following Canadian cities?

  • A. Ottawa, which hosted a round of the CEPA negotiations in July 2026
  • B. Toronto
  • C. Vancouver, a major hub of India–Canada people-to-people links
  • D. Montreal, headquarters of the International Civil Aviation Organization

Q4. India–Canada bilateral merchandise trade in FY 2024-25, the base against which the 2030 target has been set, was of the order of:

  • A. USD 4.22 billion
  • B. USD 4.44 billion
  • C. USD 8.66 billion
  • D. USD 12.88 billion

Q5. With reference to the USD 50 billion India–Canada bilateral trade target for 2030, which one of the following statements is correct?

  • A. It is a legally binding commitment written into the Terms of Reference of March 2026, enforceable from the date CEPA enters into force
  • B. It has been reaffirmed by India's Minister of Commerce and Industry with Canada's Trade Minister, and also endorsed at the level of the two countries' Finance Ministers
  • C. It applies exclusively to merchandise trade and expressly excludes all trade in services from its computation
  • D. It was fixed entirely in Canadian dollars by the two Prime Ministers and supersedes every earlier bilateral trade target

Q6. Consider the following statements comparing a Bilateral Investment Treaty (BIT) with a Comprehensive Economic Partnership Agreement (CEPA) in India's current engagement with Canada: 1. India has expressed readiness to begin negotiations on a Bilateral Investment Treaty with Canada at the earliest, as an instrument distinct from the CEPA presently under negotiation. 2. India's revised Model Text for the Bilateral Investment Treaty is meant to be used both for re-negotiating existing BITs and for investment chapters within CECAs, CEPAs and FTAs. 3. Unlike a CEPA, a BIT is primarily an instrument for granting tariff concessions on trade in goods and market access commitments in services. Which of the statements given above is/are correct?

  1. India has expressed readiness to begin negotiations on a Bilateral Investment Treaty with Canada at the earliest, as an instrument distinct from the CEPA presently under negotiation.
  2. India's revised Model Text for the Bilateral Investment Treaty is meant to be used both for re-negotiating existing BITs and for investment chapters within CECAs, CEPAs and FTAs.
  3. Unlike a CEPA, a BIT is primarily an instrument for granting tariff concessions on trade in goods and market access commitments in services.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q7. With reference to India's bilateral investment treaty framework, consider the following statements: 1. A revised Model Text for the Indian Bilateral Investment Treaty requires the approval of the Union Cabinet before it can replace the existing Model BIT. 2. The Department of Economic Affairs, under the Ministry of Finance, is the department steering the review of India's bilateral investment treaty template. 3. India has signed a Bilateral Investment Agreement with Israel. 4. India's Model BIT text is applicable only to stand-alone treaties with developed economies and cannot be used for the investment chapters of free trade agreements. Which of the above is/are NOT correct?

  1. A revised Model Text for the Indian Bilateral Investment Treaty requires the approval of the Union Cabinet before it can replace the existing Model BIT.
  2. The Department of Economic Affairs, under the Ministry of Finance, is the department steering the review of India's bilateral investment treaty template.
  3. India has signed a Bilateral Investment Agreement with Israel.
  4. India's Model BIT text is applicable only to stand-alone treaties with developed economies and cannot be used for the investment chapters of free trade agreements.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 4 only

Q8. Consider the following statements comparing the earlier India–Canada trade negotiation process with the one re-launched in 2026: 1. The earlier process envisaged an Early Progress Trade Agreement as a transitional step towards a full Comprehensive Economic Partnership Agreement, whereas the 2026 process proceeds directly towards a CEPA. 2. On resumption, the two sides agreed to carry forward the chapters already closed before the suspension instead of starting the negotiations afresh. 3. The earlier negotiations were suspended in 2023 amid diplomatic tensions, at a point when they had already reached an advanced stage. Which of the statements given above is/are correct?

  1. The earlier process envisaged an Early Progress Trade Agreement as a transitional step towards a full Comprehensive Economic Partnership Agreement, whereas the 2026 process proceeds directly towards a CEPA.
  2. On resumption, the two sides agreed to carry forward the chapters already closed before the suspension instead of starting the negotiations afresh.
  3. The earlier negotiations were suspended in 2023 amid diplomatic tensions, at a point when they had already reached an advanced stage.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q9. By the end of August 2026, how many full rounds of negotiations for the proposed Canada–India Comprehensive Economic Partnership Agreement had been concluded since the signing of the Terms of Reference?

  • A. One
  • B. Two
  • C. Three
  • D. Five

Q10. Consider the following pairs of India's trade agreement partners and the nomenclature of the agreement concluded with each: 1. United Arab Emirates — Comprehensive Economic Partnership Agreement 2. Malaysia — Comprehensive Economic Cooperation Agreement 3. Australia — Economic Cooperation and Trade Agreement 4. Singapore — Comprehensive Economic Partnership Agreement Which of the above is/are correctly identified?

  1. United Arab Emirates — Comprehensive Economic Partnership Agreement
  2. Malaysia — Comprehensive Economic Cooperation Agreement
  3. Australia — Economic Cooperation and Trade Agreement
  4. Singapore — Comprehensive Economic Partnership Agreement
  • A. 1 and 3 only
  • B. 1, 2 and 3 only
  • C. 2 and 4 only
  • D. 1, 2, 3 and 4

Q11. India's negotiation of trade agreements such as the EFTA Trade and Economic Partnership Agreement, the India–UK Comprehensive Economic and Trade Agreement and the proposed Canada–India CEPA is conducted by which one of the following?

  • A. The Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry
  • B. The Department of Commerce, Ministry of Commerce and Industry
  • C. The Department of Economic Affairs, Ministry of Finance
  • D. The Economic Diplomacy Division, Ministry of External Affairs