Canada and India are set to significantly expand trade in oil and petroleum products as both countries work to reset their relationship following a prolonged diplomatic chill.
The renewed cooperation will see Canada increase exports of crude oil, liquefied natural gas, and liquefied petroleum gas to India, while India will boost shipments of refined petroleum products to Canada. The commitments follow high-level discussions between senior energy ministers from both countries and are expected to be formalized during meetings this week at India Energy Week in Goa.
As part of the reset, the two sides are reviving a ministerial energy dialogue that once served as the backbone of bilateral cooperation in the sector. The mechanism had fallen dormant amid a serious diplomatic dispute, but its relaunch signals a shared belief that the energy partnership holds untapped economic and strategic potential.
The push marks a key pillar of Prime Minister Mark Carney’s broader effort to diversify Canada’s export markets at a time of growing global trade uncertainty. It also reflects a shift toward pragmatic, economy-focused diplomacy with major Asian partners, particularly as tensions with the United States continue to influence Canada’s trade strategy.
Beyond oil and gas, both governments have agreed to encourage reciprocal investment in each other’s energy sectors and explore collaboration across emerging industries. These include hydrogen, biofuels, battery storage, critical minerals, electricity systems, and the application of artificial intelligence in energy production and distribution.
Officials say the renewed engagement underscores the scale of opportunity between the two countries. Two-way trade in goods reached more than $13 billion in 2024, yet India currently accounts for only a small fraction of Canada’s critical minerals exports, highlighting room for rapid growth. Canada’s expanding liquefied natural gas capacity and relatively short shipping routes for liquefied petroleum gas also strengthen its position as a potential long-term energy supplier to India.
Recent infrastructure developments have further improved Canada’s export prospects. The expansion of the Trans Mountain pipeline has opened a more direct route for Canadian crude to reach Asian markets, including India, even as some shipments continue to flow through U.S. ports.
Carney is expected to visit India in the coming weeks to build on the momentum, following the resumption of talks with Prime Minister Narendra Modi aimed at a comprehensive economic partnership agreement. The visit will come on the heels of Carney’s recent engagement with China, part of a broader strategy to reposition Canada within a rapidly shifting global trade environment.
As both countries look to secure energy supply chains and strengthen economic resilience, the renewed Canada–India energy partnership signals a forward-looking reset rooted in shared commercial interests and long-term strategic cooperation.