India, Canada to expand oil and gas trade as ties reset after diplomatic chill: Report

Canada and India will pledge to expand trade in oil and gas as the two countries move to reboot their relationship after more than a year of diplomatic strain, Bloomberg News reported on Tuesday.

Ottawa will commit to shipping higher volumes of crude oil, liquefied natural gas and liquefied petroleum gas to India, while New Delhi will send more refined petroleum products to Canada, the report said.

The commitments follow talks between Canadian Energy Minister Tim Hodgson and India’s Petroleum and Natural Gas Minister Hardeep Singh Puri.

The two ministers are set to meet on Tuesday on the sidelines of India Energy Week in Goa, where they will relaunch a long-dormant “ministerial energy dialogue”. Once the main institutional channel for bilateral energy cooperation, the dialogue had stalled amid an explosive dispute over the killing of a Canadian Sikh activist, which plunged ties into a deep freeze.

Renewed engagement amid US tariffs

The renewed engagement marks one of Prime Minister Mark Carney’s most visible efforts to diversify Canada’s export markets at a time of escalating trade tensions with the US. It also underscores his government’s pivot towards pragmatic, economy-first diplomacy with major Asian partners.

Beyond trade flows, Hodgson and Puri will commit to facilitating greater reciprocal investment in each other’s energy sectors. The two sides will also explore collaboration in emerging and strategic areas including hydrogen, biofuels, battery storage, critical minerals, electricity systems and the use of artificial intelligence in the energy industry, the report said.

The relaunch of the ministerial dialogue signals that both governments see untapped commercial potential, and strategic value, in strengthening an energy relationship that had been allowed to drift despite complementary strengths.

Carney is expected to visit India in the coming weeks as part of the broader reset. He and Prime Minister Narendra Modi revived talks in November aimed at a comprehensive economic partnership agreement, seeking to inject momentum into a relationship that had been weighed down by political tensions.

Two-way goods trade between Canada and India reached C$13.3 billion (around $9.68 billion) in 2024, but Ottawa believes there is substantial headroom for growth, particularly in energy. India currently accounts for just about 1 per cent of Canada’s critical minerals exports, a gap Canadian officials say highlights the scale of the opportunity.

Canada began exporting LNG to Asia in June 2025, while its LPG terminals offer relatively short shipping routes to India. The expansion of the Trans Mountain pipeline has also created a direct pathway for Canadian crude to reach Indian refiners, although most barrels bound for India still transit via the US Gulf Coast.

Canada pursuing new trade partner

Carney’s outreach to India comes as he seeks to rebalance Canada’s trade relationships amid rising geopolitical and economic uncertainty. His planned India visit will follow a recent trip to Beijing, where he and Chinese President Xi Jinping agreed to work towards reducing tariff barriers, a move that prompted US President Donald Trump to threaten 100 per cent tariffs on Canadian goods if Ottawa ‘makes a deal with China’.

Carney has repeatedly stressed that Canada is not pursuing a free trade agreement with China, even as it looks to deepen economic engagement across Asia. The renewed push with India, particularly in energy, reflects Ottawa’s attempt to secure reliable growth markets while reducing overdependence on its southern neighbour.