India, Canada seek closer financial ties, easier cross-border payments

India and Canada are looking to deepen cooperation in financial services, including cross-border payments, fintech, capital markets and financial stability, Finance Minister Nirmala Sitharaman said on Thursday after the two countries launched their inaugural Economic and Financial Dialogue.

Sitharaman said the dialogue was aimed at building a deeper economic partnership that goes beyond traditional trade in goods and services, with greater cooperation in investment, finance, capital markets and regulatory matters.

“The economic and financial dialogue reflects this broad ambition to move beyond traditional trade in goods and services and build a deeper economic partnership,” Sitharaman said.

The discussions covered “cross-border payments, financial stability, fintech and capital markets”, she said, adding that there was “considerable potential” for the two financial systems to work more closely to facilitate trade, investment and remittances.

Focus on payments, fintech

Canadian Finance Minister François-Philippe Champagne said financial services could become one of the biggest areas of growth in the India-Canada economic relationship.

“One of the highest growth potential is on financial services,” Champagne said.

He said the two countries were looking at ways to facilitate payments between them, including for Indian students studying in Canada.

“We are looking to facilitate payments, for example, for students,” Champagne said.

“We know we have about 400,000 Indian students,” he said, adding that both countries were committed to making payments easier for them.

“I think that will be a great benefit to the Indian students that are living in Canada,” Champagne said. He added that easier transfers would provide “peace of mind to the parents in India” whose children are studying in Canada.

Champagne also said the two sides were looking at “a number of things to facilitate payment between Canada and India”, including allowing more financial institutions to operate in each other's markets and strengthening cooperation in fintech.

“India has a lot to offer,” he said.

Sitharaman pitches India to Canadian funds

Sitharaman also used the dialogue to highlight investment opportunities in India for Canadian pension and sovereign wealth funds.

She said India had created a “complete list” of its national pipeline for asset monetisation and described it as a growing pool of investment opportunities for funds seeking high returns.

“Pension funds and the sovereign funds, all are looking for potential growth areas wherein their investments will give them good returns,” Sitharaman said.

She highlighted infrastructure and emerging sectors including green ammonia, hydrogen, advanced batteries, fintech, space, renewable energy and nuclear energy.

“Small modular nuclear reactors are also today the in-thing for India's energy security,” she said.

“There are immense possibility for funds to come and invest in India,” Sitharaman added.

She said GIFT City and the National Infrastructure Investment Fund (NIIF) were also engaging with Canadian funds to showcase investment opportunities in India.

Bilateral relationship gets broader focus

Sitharaman said the two countries had also identified opportunities for cooperation in critical minerals and energy security, with the objective of creating more resilient and diversified global supply chains.

“This was not just a dialogue,” she said. “We identified specific areas for follow-up as well.”

She said officials from both countries would continue discussions to ensure “concrete outcomes”.

Sitharaman also stressed the importance of bilateral partnerships amid a rapidly changing global economy.

“Whilst plurilateral relationships are fine, bilateral relationships clearly match one another's potential and challenges to the advantage of each,” she said.

A bilateral economic relationship, she added, “tailor-makes it for the complementarities that exist between the two countries”.

The two countries have an existing goal of taking bilateral trade to $70 billion by 2030, but that target predates Thursday's dialogue and was reaffirmed rather than newly announced. Champagne called the target “highly achievable”.

Separately, Champagne positioned the renewed engagement with India as part of Canada's broader diversification strategy, calling it “diversification in action” and saying Canada wants to “build strong at home, diversify abroad.”