Canada-India Push Forward Ambitious Trade Reset

Canada and India are trying to turn a long, underutilized partnership into a focused bilateral economic growth opportunity built on strategic trade between the nations through a formal partnership agreement, and a renewed focus on energy underpinned by institutional investment.

With Prime Minister Carney’s unapologetic vision to seize the opportunity in front of him as articulated during his Davos speech, and Indian Prime Minister Narendra Modi’s intentional push to strengthen India’s role on the global stage, there lies a mutual interest between like-minded nations.

When Prime Minister Mark Carney landed in Mumbai on February 27, 2026 — the first bilateral visit by a Canadian leader since Justin Trudeau went to New Delhi in 2018 — he carried with him a clear message: Canada wants to do serious business with India, and it wants to move fast. 

Carney’s recent trade missions have operated with a two-fold agenda: to solve trade irritants as soon as possible and to establish an accelerated pathway to trade pacts.

By the time Carney left New Delhi on March 2, 2006, he did just that as the two sides: signed nine agreements, including a landmark C$2.6 billion uranium supply contract; launched formal negotiations on a Comprehensive Economic Partnership Agreement (CEPA); and set themselves the target of concluding the trade deal by year-end. The ambition is audacious: expanding bilateral trade to roughly C$70 billion (US$50 billion) in Canadian dollar terms — by 2030, from about C$13 billion (US$8.7 billion) in merchandise trade today.

Trade Reset 

Modi and Carney met at the G7 in Kananaskis in June 2025, then again at the G20 in Johannesburg in November. High commissioners were restored and ministerial visits accelerated. By the time Carney arrived in India, his government had held more bilateral engagements with India in a single year than any Canadian government had managed in the previous two decades.

The State of Trade: Modest Numbers, Big Potential

India's exports to Canada are led by pharmaceuticals (US$540 million in FY25), followed by nuclear reactors and boilers (US$304 million), iron and steel articles (US$289 million), electrical machinery (US$256 million), and organic chemicals (US$240 million).

Canada's exports to India are dominated by edible vegetables — essentially pulses and lentils (US$949 million) — followed by mineral fuels and oils (US$640 million), gems and precious stones (US$459 million), fertilisers (US$375 million), and wood pulp (US$355 million).

One of the most striking features of the bilateral relationship is the explosive growth in services trade, driven almost entirely by Indian students in Canada. Canada's service exports to India surged from C$1.6 billion in 2018 to C$15.2 billion in 2024, with education-related travel accounting for 95 per cent of the total by 2023.

What Was Actually Agreed in New Delhi

The March 2026 visit produced concrete deliverables across four pillars.

The CEPA Launch

The centrepiece was the formal launch of CEPA negotiations. Commerce Minister Piyush Goyal and Canada's Trade Minister Maninder Sidhu signed the Terms of Reference (ToR) at Hyderabad House, in the presence of both prime ministers. The ToR set the negotiation structure, modalities and roadmap covering goods, services, investment facilitation, digital trade, intellectual property, government procurement and dispute settlement.

Both leaders are committed to concluding negotiations by the end of 2026. To maintain commercial momentum, they agreed on four reciprocal ministerial-led trade visits with business delegations, reconstituted the India-Canada CEO Forum, and announced a Finance Ministers' Economic Dialogue covering payments modernisation, fintech, and capital markets.

Energy

Energy is where the money is right now, domestically in each of the nations but also globally as countries aim to secure long-term energy security and reliability. The headline was a 10-year, C$2.6 billion contract between Cameco and India's Department of Atomic Energy for 22 million pounds of uranium ore, supporting India's nuclear expansion from roughly 8 gigawatts (GW) today toward a target of several tens of GW by 2047.

Beyond nuclear, the leaders announced a Strategic Energy Partnership covering Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), crude oil, hydrogen, and biofuels. Canada aims to become a major LNG supplier — targeting 50 million tonnes per year by 2030 and 100 million by 2040 — and India, the world's fourth-largest LNG importer, needs the supply. They also discussed concluding India's first long-term LPG arrangement with Canada.

As an RBC (Royal Bank of Canada) analysis noted, Canada's largest energy export to India today is actually coal — not oil or gas — highlighting the gap between potential and reality. Long-term purchase contracts, not diplomatic announcements, will determine whether this alignment translates into sustained export growth.

Critical Minerals and Clean Energy

The leaders signed an Memorandum of Understanding (MOU) on critical minerals cooperation, part of a broader push to diversify supply chains away from Chinese dominance. India endorsed the G7 Critical Minerals Action Plan. A separate clean energy MOU established a framework covering solar, wind, bioenergy, small hydro and energy storage. They also committed to convening an India-Canada Renewable Energy and Storage Summit in 2026.

Defence and Security

For the first time, India and Canada agreed to establish a formal Defence Dialogue to exchange views on defence policies, regional security and strategic outlooks. A Maritime Security Partnership covers defence material cooperation, supply chain resilience and joint training. Canada appointed a Defence Attaché to India.

On law enforcement, the two sides agreed to tackle shared concerns, including fentanyl precursors, organised crime, cybercrime and transnational criminal networks.

The Pension Fund Bridge

Perhaps the most underappreciated dimension of the India-Canada economic relationship is the scale of Canadian institutional investment. Canadian pension funds — led by CPP Investments, but including The Caisse de dépôt et placement du Québec (CDPQ), Ontario Municipal Employees Retirement System (OMERS), Ontario Teachers', and others — have collectively invested more than US$70 billion in India, with total direct and indirect Canadian investment surpassing US$110 billion.

CPP Investments alone more than doubled its India portfolio from C$10 billion in 2020 to over C$20 billion by mid-2025, making India its third-largest market in Asia-Pacific. Its holdings include stakes in Phoenix Mills, ReNew Power, NSE, Kotak Mahindra Bank, IndoSpace, and over C$960 million in India's National Highways Infrastructure Trust.

As one analysis noted, this capital already functions as commercial infrastructure — pension funds invest in the roads, logistics parks, renewable energy projects and financial institutions that create entry points for Canadian exporters and service providers. If the CEPA is the political architecture, Canadian pension capital is the foundation on which it is built.

Where It Gets Complicated

None of this will be straightforward. The obstacles are structural, not just diplomatic.

Agriculture Remains Politically Explosive

Agriculture is Canada's largest export sector to India, yet also one of the most politically constrained. India imposes a 30 per cent duty on Canadian yellow peas and 10 per cent tariffs on lentils, both designed to protect Indian farmers and manage food-price inflation. India frequently adjusts tariffs, licensing rules and procurement conditions, creating persistent uncertainty for Canadian pulse exporters. Even in its deal with the EU, India fully excluded dairy, sugar, rice, soybeans and beef. A proposed Canada-India Pulse Protein Centre of Excellence at NIFTEM Kundli is a step forward, but the broader agricultural access question will be among the toughest in CEPA talks.

India Opens Its Market Selectively

India's recent trade agreements demonstrate a clear pattern: it opens sectors where imports support domestic growth while maintaining tight protection where political sensitivity is highest. The EU deal, for instance, gave India 10 years to phase out tariffs on 39.5 per cent of European products. Automobiles below a certain threshold were excluded entirely.

Canada's experience negotiating with India stretches back to 2010, when trade ministers launched CEPA talks in Ottawa. A total of 10 rounds of negotiations followed, the last in 2017, before talks collapsed amid the pandemic and then the diplomatic crisis. Getting a deal done in under a year would be unprecedented.

What Businesses Should Be Watching

For companies with interests spanning the India-Canada corridor, several concrete developments warrant attention:

• CEPA timeline and structure: ToR are signed, and both leaders have set a December 2026 deadline. Even if the full agreement takes longer, businesses should begin mapping how preferential tariff treatment would affect their cost structures, supply chains and market access strategies. The ToR covers goods, services, investment, digital trade, IP and procurement — a wide negotiating surface.
• Energy infrastructure: The uranium deal is done. LNG and crude oil agreements will follow if commercial pathways can be built. Companies in energy services, shipping and infrastructure should track the India-Canada Ministerial Energy Dialogue, relaunched at India Energy Week 2026.
• Critical minerals: With India endorsing the G7 Critical Minerals Action Plan and both sides pushing for joint investment in mining, processing and battery storage, there are entry points for Canadian mining firms and Indian manufacturers looking to secure alternative supply chains.
• Technology and AI: The joint statement included commitments on AI cooperation; cross-border, work-integrated learning; and the Australia-Canada-India Technology and Innovation Partnership. HCL Technologies will expand its Canadian workforce by 75 per cent — from 3,000 to over 5,000 — with new AI centres in Calgary and Mississauga. The Canadian Space Agency and ISRO also agreed to cooperate on Earth observation and quantum technologies.
• Pension fund: It flows as commercial intelligence. Where Canadian pension funds invest in India tells you where commercial entry points are emerging. Their US$110 billion in direct and indirect investment spans real estate, infrastructure, renewable energy, financial services and logistics. For Canadian exporters and service providers, these holdings are the connective tissue of the trade relationship.

Strategic Considerations for Multinational Organizations

With a more focused partnership now being worked on, below are some strategic considerations multinational corporations should think about to position themselves favourably and maximize the opportunity ahead.

Organizations have an opportunity to shape the policy environment, cultivate lasting relationships with key decision-makers, and ensure business activities align with and reinforce the broader objectives of the bilateral agreement. This is about maximizing long-term strategic advantage, influencing the ecosystem and moving beyond mere compliance to proactive engagement.

Government Relations

• Direct Engagement: Engage national/state ministries, regulatory bodies and policymakers in both Canada and India.
• Diplomatic Channels: Use High Commissions/Embassies and trade commissioners.
• Industry Leadership: Participate in and lead industry groups and trade missions.
• Relationship Building: Cultivate proactive, trust-based relationships with officials and leaders.

Advocacy & Intelligence Gathering

• Agreement Expertise: Develop deep in-house expertise on agreement nuances and anticipate regulatory changes.
• Proactive Input: Provide data-driven input to governments on implementation, identifying bottlenecks and suggesting enhancements.
• Future Advocacy: Advocate for complementary policies (e.g., sector-specific, labour mobility) supporting strategic growth.

The Bigger Picture

Canada is broadening its economic horizons by deepening trade and investment ties beyond North America, and India is emerging as a central partner in that strategy. At the same time, India is using its strong growth and negotiating clout to build new, long-term partnerships with key middle-power economies, including Canada.

The fit between the two is natural. India can draw on Canada’s strengths in energy, uranium, potash, critical minerals and long-term capital, while Canada can benefit from India’s scale, growth momentum, skilled talent pool, technology services and expanding consumer market.

The question now is whether the combination of external pressures, the Carney government's trade diversification agenda, and India's own pivot toward middle-power partnerships can produce an outcome that has eluded both countries for 16 years.

The clock is ticking. Both governments want a signed CEPA by December 2026. For companies that have been watching this corridor from the sidelines, the signal from New Delhi and Ottawa could not be clearer.

Written by: Vivek Prabhu, Yash Dogra, Vandana Sandhir, Giriprakash Krishnamoorthy