Canada and India will expand oil and gas trade, revive energy dialogue and boost investments as both nations reset ties and diversify export markets.
Canada and India are preparing to strengthen trade in oil and gas as both nations work to rebuild their relationship following a period of diplomatic tension.
According to a joint statement accessed by Bloomberg News, Canada will increase shipments of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to India. In return, India will expand exports of refined petroleum products to Canada. The commitment follows discussions between Canadian Energy Minister Tim Hodgson and India’s Petroleum and Natural Gas Minister Hardeep Singh Puri.
The two ministers are scheduled to meet at India Energy Week in Goa on Tuesday, where they will formally revive a “ministerial energy dialogue.” Once a key platform for bilateral energy cooperation, the dialogue had stalled after a high-profile dispute linked to the killing of a Canadian Sikh activist.
The renewed engagement aligns with Prime Minister Mark Carney’s broader strategy to diversify Canada’s export destinations as trade pressures with the United States continue to rise. It also signals Ottawa’s shift toward a more pragmatic, economy-driven approach in strengthening partnerships with major Asian economies.
Beyond oil and gas, both sides have agreed to encourage mutual investments in their energy sectors and explore cooperation in emerging areas such as hydrogen, biofuels, battery storage, critical minerals, electricity networks and the application of artificial intelligence in energy systems.
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Officials say the revival of the dialogue reflects growing recognition in both governments of the untapped potential and strategic importance of deepening energy ties.
Prime Minister Carney is expected to travel to India in the coming weeks as part of efforts to further reset bilateral relations. He and Prime Minister Narendra Modi resumed discussions in November aimed at advancing a comprehensive economic partnership agreement.
Trade between the two countries reached C$13.3 billion ($9.7 billion) in 2024, with Canada seeing significant scope for growth, particularly in energy exports. Currently, India accounts for only about 1% of Canada’s critical minerals exports, highlighting opportunities for expansion. Canada also began exporting LNG to Asia in June 2025, while its LPG terminals offer relatively shorter shipping routes to India.
The expansion of the Trans Mountain pipeline has created a more direct route for crude shipments to India, although most Canadian oil bound for the country still travels via the US Gulf Coast.
Carney’s planned India visit will follow his recent trip to China, where he and President Xi Jinping agreed to reduce tariff barriers — a move that prompted US President Donald Trump to warn of steep tariffs on Canadian goods if Ottawa strengthens trade ties with Beijing. Carney has clarified that Canada is not pursuing a free trade agreement with China.