Canada is increasingly viewing India as a crucial partner in its strategy to diversify trade and strengthen its economic presence in the Indo-Pacific region. This strategic alignment comes amid evolving global trade dynamics and a renewed focus on building resilient and diversified supply chains.
Growing Bilateral Engagement
The importance of the Canada-India relationship was highlighted during Canadian Minister of International Trade Maninder Sidhu's recent visit to India. During the visit, Sidhu and Indian Commerce and Industry Minister Piyush Goyal co-chaired the Canada-India Ministerial Dialogue on Trade and Investment, signaling a commitment to explore new areas of collaboration and to reinforce supply chains. Goyal is expected to lead a trade delegation to Canada soon.
Sidhu's visit underscores Canada's dedication to bolstering trade, investment, connectivity, and innovation partnerships with India. Both countries aim to identify opportunities that will benefit workers and businesses. In a statement, Sidhu said that his visit to India reinforced Canada's commitment to diversifying trade relationships and attracting new investments. He added that India, as one of the fastest-growing major economies, presents significant opportunities for Canadian businesses and workers.
Trade and Economic Ties
In 2024, India was Canada's seventh-largest goods and services trading partner, with two-way trade valued at $30.9 billion. Canada's merchandise imports from India were valued at $8 billion, an increase of 6.6% from 2023. The top merchandise products exported to India from Canada include vegetables, mineral fuels and oils, wood pulp, fertilizer, and paper and paperboard, while top import products include pharmaceutical products, machinery, electronics, precious stones and metals, and iron or steel products.
Focus on Key Sectors
Both Canada and India are keen to develop partnerships in sectors such as critical minerals, clean energy, aerospace, agriculture, and artificial intelligence. Canada is particularly interested in attracting Indian investment across mining and infrastructure, recognizing India's growing clean energy demands and its focus on supply chain diversification. Canada has what it takes to build an electric battery, and is actively encouraging foreign investment to harness this potential.
Strategic Considerations
Canada's increased focus on India is partly driven by the need to reduce reliance on the U.S. market, particularly in light of U.S.-imposed tariffs. India is seen as a more reliable partner in building alternative supply chains, especially for rare earth minerals and technology. Cooperation with India is about securing a role in the global minerals race and reducing China's leverage over critical industries.
Resetting the Relationship
After a period of strained relations, efforts are underway to reset the relationship between Canada and India. A breakthrough was achieved when Canadian Prime Minister Mark Carney held a bilateral meeting with Indian Prime Minister Narendra Modi on the sidelines of the G7 leaders' summit in Kananaskis in June. Anita Anand's visit to India signaled a desire to move away from public disputes and return to normal diplomacy.
