Canada and India Move to Rebuild Trade Ties After Two Year Diplomatic Freeze

Picture Credit: The Economic Times

Canada and India are taking concrete steps to rebuild their trade relationship after a two-year diplomatic freeze, with Canadian Trade Minister Maninder Sidhu visiting New Delhi this week for high-level talks. Sidhu met Commerce Minister Piyush Goyal, describing the discussions as “very productive” and focused on new areas of cooperation including critical minerals, clean energy, agriculture, aerospace and AI.

The visit marks the most significant engagement since Canada paused trade negotiations in 2023, following Ottawa’s accusations about India’s involvement in the killing of a Canadian Sikh separatist. Sidhu said both sides are now in early discussions to restart negotiations, noting that shifting global trade dynamics (such as higher US tariffs) have created fresh urgency.

Sidhu highlighted that Canada’s new Prime Minister Mark Carney intends to revive bilateral ties with “new focus and energy,” especially in sectors such as battery supply chains and critical mineral mining, where Ottawa hopes to attract Indian investment. “Canada has every element needed to build an electric battery,” Sidhu said, emphasizing opportunities for deeper cooperation.

India remains a priority market for Canada, with two-way goods and services trade reaching $31 billion in 2024. Strong people-to-people ties also continue to anchor the relationship: India is Canada’s largest source of immigrants, with nearly 393,000 Indian students and more than 1.8 million people of Indian origin living in Canada.

During his trip, Sidhu met top Indian business groups, including Tata, and said they were keen to expand in Canada. He added that Minister Goyal has committed to visiting Canada soon with a trade and investment delegation, an indication that both countries are ready to move toward a more stable and cooperative economic partnership.