Canada is planning to increase exports of crude oil and natural gas to India while buying refined petroleum products in return as both nations eye closer trade ties, the two governments said in a joint statement Tuesday.
Energy and Natural Resources Minister Tim Hodgson was in India this week, meeting Indian Petroleum and Natural Gas Minister Hardeep Singh Puri.
Energy security and “diversity of supply” are key to ensuring the “economic vitality of both countries,” the joint statement added.
Currently, 97 per cent of all of Canada’s energy exports are to the United States.
Prime Minister Mark Carney has vowed to double non-U.S. exports.
India is the world’s third largest consumer of oil, fourth largest LNG importer and third largest LPG consumer.
Canada is looking to export more liquefied natural gas (LNG) and crude oil to Asian markets via the Trans Mountain Expansion (TMX) Pipeline.
Canada is also looking to increase liquefied petroleum gas (LPG) exports to Asia via the west coast of Canada, the statement said, with India emerging as a key market.
Currently, most of Canada’s energy trade with India rests on the export of bituminous coal, with some crude oil exports.
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Canada’s total energy exports to India amounted to $761.5 million in 2024, while Canada imported $206 million worth of energy products, according to Statistics Canada.
Most of Canada’s energy exports to India were made up of $602 million in coal exports and $158 million in crude oil and bitumen, with a fairly small amount of nuclear fuel being exchanged between the two countries.
This pales in comparison to the $171 billion in Canadian energy exports to the United States in the same year.
In 2024, India sold $206 million worth of refined petroleum energy products to Canada.
India is also looking to diversify its sources of energy.
In 2023-24, the country imported nearly 88 per cent of all the crude oil it consumed — most of it from Russia. Nearly half (47.1 per cent) of India’s natural gas was also imported.
While Russia remains India’s largest foreign source of oil, accounting for 37.1 per cent of oil imports, India saw a 17.8 per cent drop in Russian oil imports.
Some experts say this was largely due to EU sanctions, which prohibit the shipment of refined petroleum products if Russian crude oil was used in the process.
For Canada, this signals an opportunity, International Trade Minister Maninder Sidhu said in Davos last week.
Sidhu said India is “destined to be the third-largest economy in the world” and is the next major target in Carney’s push to diversify trade.
“India is requiring 70 per cent more energy by 2040. As you know, Canada has the energy. India’s year-over-year growth is about seven per cent, so they need food, they need energy. We have that,” Sidhu said in Switzerland, where he was attending the World Economic Forum with Carney.
Carney met Indian Prime Minister Narendra Modi in June last year on the sidelines of the G7 summit in Kananaskis, Alta., where the two discussed “partnerships in economic growth, supply chains, and the energy transformation.”
However, diplomatic ties between Canada and India have been strained in recent years.
In September 2023, former prime minister Justin Trudeau and the RCMP said that Canada had evidence linking agents of the Indian government to the murder of Canadian citizen and Sikh activist Hardeep Singh Nijjar the previous June.
In October 2024, India expelled six Canadian diplomats and withdrew one of its envoys accused in the killing.
That came as Canada also expelled India’s high commissioner and five other diplomats.
Ottawa said India had declined to waive diplomatic and consular immunity to allow the RCMP to interview Indian diplomats who worked in Canada.
India responded by expelling Canada’s high commissioner.
Canada and India launched talks 16 years ago on a comprehensive trade deal that would cover almost all industries.
They later downgraded those talks to negotiations on a sectoral deal that would only touch on specific industries, which is where they stood when the diplomatic crisis erupted in 2023, but the two countries have since reappointed high commissioners.
Last week, Sidhu said Ottawa is trying to pursue economic opportunities while defending its interests.
“The prime minister has been clear. We want to see the world as it is, not as we wish it to be,” Sidhu said when asked why Canada is deepening ties with India now.
“You will have many different conversations, many pathways on public safety, on law enforcement dialogue. It’s the same thing with China. There are certain things that we align with and there are certain things that we don’t align with. But at the end of the day, we need to find opportunities for Canadians and that’s our government’s pragmatic approach.”
— With files from The Canadian Press
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