New Delhi: Canada and India have agreed to significantly expand trade in oil, gas and petroleum products as part of a broader effort to reset bilateral relations and deepen economic cooperation. The renewed focus on energy marks a key step in rebuilding engagement after a period of diplomatic strain between the two countries.
Under the new understanding, Canada will increase shipments of crude oil, liquefied natural gas and liquefied petroleum gas to India, while India will supply more refined petroleum products to the Canadian market. The commitments follow discussions between the energy ministers of both countries and will be formally advanced during India Energy Week in Goa, where the two sides will relaunch a ministerial energy dialogue.
The dialogue mechanism, which was once the primary platform for energy cooperation, had remained inactive for several years amid political tensions. Its revival signals a shared recognition of the strategic and commercial value of closer collaboration in the energy sector. Both governments believe the partnership has substantial untapped potential, particularly at a time when global energy supply chains are being reshaped.
Canada’s renewed engagement with India is also part of a broader strategy to diversify its export markets as trade frictions with the United States intensify. The Canadian government is placing greater emphasis on pragmatic, economy focused diplomacy with major Asian economies, with energy emerging as a central pillar of this approach.
Beyond oil and gas trade, the two countries have agreed to encourage reciprocal investment in their energy sectors and explore cooperation in emerging areas. These include hydrogen, biofuels, battery storage, critical minerals, electricity systems and the use of artificial intelligence across energy infrastructure and operations.
Trade figures underline the scope for growth. Two way goods trade between Canada and India reached C$13.3 billion in 2024, with energy expected to play a larger role going forward. India currently accounts for only a small share of Canada’s critical minerals exports, highlighting opportunities for expansion. Canada’s recent start of LNG exports to Asia and the availability of shorter shipping routes for LPG strengthen its position as a supplier to India.
The expansion of Canada’s Trans Mountain pipeline has also improved access for crude exports to India, supporting long term trade growth. The energy reset is expected to be reinforced by upcoming high level visits and ongoing discussions on a comprehensive economic partnership agreement between the two countries.
