After months of strain, India and Canada move to revive economic and trade partnership
India and Canada have held their first high-level talks on economic relations in over a year. The Canada-India Economic Dialogue, aimed at reinvigorating bilateral trade, was held in New Delhi from 11-14 November as Canada’s Minister of Export Promotion, International Trade and Economic Development, Maninder Sidhu, led a delegation to the Indian capital at the invitation of Indian Commerce & Industry Minister Piyush Goyal.
Sidhu and Goyal co-chaired the 7th Ministerial Dialogue on Trade and Investment (MDTI), reflecting common understandings in this area agreed by the governments of both countries. The release quoted instructions received by both ministers at the G7 summit in Kananaskis, Canada, and the joint statement issued by the foreign ministers of both countries on 13 October 2025, on advancing trade as a pillar for shared economic growth and resilience.
The diplomatic rapprochement between India and Canada, at an advanced level, was unexpected. Ties between the two countries have faced serious difficulties after the killing of Sikh activist Hardeep Singh Nijjar in British Columbia in 2023 and the expulsion of diplomats. India’s refusal to respond to Canadian Prime Minister Justin Trudeau’s demand for a joint probe into the matter led Ottawa to claim New Delhi was behind the killing and ordered the expulsion of three Indian diplomats. India retaliated and the chill resulted in the postponement of the trade negotiations on a bilateral Comprehensive Economic Partnership Agreement (CEPA) – which were due to begin in 2023.
Nevertheless, despite the political storm clouds, trade in goods and services increased. Bilateral trade between India and Canada in goods and services was reported at US $23.66 billion in 2024, which represents an increase of almost US $12.7 billion over 2023. Bilateral merchandise trade in 2024 was just under US $8.98 billion, representing a 10 % increase.
In the dialogue, both ministers underlined their commitment to deepen economic ties, including the resilient and growing two-way investment relationship – where Canadian institutional investors are increasingly present in India, while Indian companies are continuing to explore the Canadian market, contributing to job creation in both countries.
The meeting discussed a number of issues. The ministers said they prioritised new areas of cooperation, particularly in emerging sectors, including critical minerals which are key to both countries’ energy transitions, as well as in aerospace and dual-use industrial capabilities. India has a rapidly growing aviation sector, while Canada has an established aerospace base and the two have complementary market needs.
The dialogue also highlighted the important role played by people-to-people contacts and sustained private-sector engagement, which has been the bedrock of the wider economic relationship between the two countries. The ministers noted they were satisfied with the pace of discussions to date and underlined the importance of predictability and an enabling environment for investment flows to maintain the momentum.
In the words of India’s commerce ministry, the two ministers “reaffirmed the strength and resilience of the India-Canada economic partnership and emphasised the importance of continued engagement with the private sector to unlock new opportunities for trade and investment.”
India and Canada are both keen to adjust to the changing nature of global trade and the reconfiguration of supply chains. After a year of diplomatic frost, it remains to be seen if this early thaw in trade and investment talks can lead to political goodwill turning into commercial reality. For India, it is a logical step in its policy of expanding its export markets and increasing linkages to diverse trading partners. Canada has an appetite to access India’s fast-growing and dynamic economy with huge potential for growth in various sectors.
The next steps will need to address residual geopolitical sensitivities, but this high-level dialogue meeting has been a positive first step towards normalising a relationship that was all but broken less than two years ago.
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