Canada and India have launched negotiations for a comprehensive free trade agreement they say may increase trade between the two countries by 50%.
They said the pact could boost the gross domestic product in each nation by nearly US$6bn (£3.6bn) a year.
"Both sides expect a timely conclusion of an ambitious agreement," the leaders of both nations said in a statement.
Canadian Prime Minister Stephen Harper and India's Manmohan Singh spoke on the sidelines of the G20 summit.
"This will be of enormous benefit to both of our countries, and obviously of particular interest to the Indo-Canadian business community," Mr Harper told reporters at a press conference in South Korea.
He added that a trade agreement with India could benefit Canadian exporters of forest products, minerals, manufactured goods, construction materials and even aerospace equipment.
Bilateral trade between the two countries was worth US$4.1 billion in 2009.