New Delhi, May 28:A potential India-Canada trade agreement could play a strategically significant role in Canada’s diversification agenda and North American supply chain resilience, particularly in critical minerals, clean energy and knowledge-driven services, according to an article published in One World Outlook.
While bilateral trade volumes remain moderate, the relationship is increasingly viewed as economically and strategically underutilised.
According to the article, India-Canada merchandise trade reached around $8.4 billion in FY24, marginally higher than $8.3 billion in FY23. On a broader basis, trade in goods and services rose from $18.38 billion in 2023 to nearly $23 billion in 2024, highlighting the growing contribution of the services sector.
India relies on Canada for imports such as pulses, fertilisers, newsprint, wood pulp and industrial chemicals, underscoring sector-specific dependencies linked to food security and industrial inputs.
In return, India exports gems and jewellery, pharmaceuticals, garments, organic chemicals and engineering goods, reinforcing its position as a diversified manufacturing and processing hub.
The article notes that services trade has emerged as the strongest pillar of bilateral engagement, with proposed frameworks such as the Early Progress Trade Agreement (EPTA) and a broader Comprehensive Economic Partnership Agreement (CEPA) offering significant upside.
Canada’s services exports to India account for just about 1 per cent of its total services exports, while services imports from India have risen to an estimated 3.5 per cent, reflecting growing Canadian dependence on Indian IT, professional and back-office services.
For Canada, the strategic appeal of closer trade ties lies in reducing excessive dependence on the United States and balancing a complex economic relationship with China, the article argued. Ottawa has already identified India as a priority partner under its Indo-Pacific strategy, with a target to double bilateral trade by 2030.
On India’s side, rapid economic growth, rising energy demand and industrial expansion support deeper engagement. Canada’s resource sector views India as a long-term market for LNG, crude oil and critical minerals, particularly as India accelerates electrification and renewable energy deployment.
The article highlighted that New Delhi and Ottawa are pursuing a phased trade architecture, beginning with a limited EPTA before moving toward a comprehensive CEPA. Negotiations were formally relaunched in March 2022, covering goods, services, investment, rules of origin, sanitary standards and dispute resolution mechanisms.
