Canada and India are moving to expand energy trade, pledging to increase shipments of oil and gas as they seek to rebalance their economic and geopolitical relationships.
The decision was announced on Tuesday at India Energy Week in Goa, where Canada’s energy and natural resources minister Tim Hodgson met India’s petroleum and natural gas minister Hardeep Singh Puri.
Canada will commit to supplying more crude oil, LNG and LPG to India, while Delhi will send more refined petroleum products the other way, Bloomberg News reported.
The talks marked the restart of a ministerial energy dialogue stalled by the diplomatic crisis caused by the killing of a Canadian Sikh activist. The dialogue was previously the main channel for bilateral energy cooperation.
Speaking at the conference, Mr Hodgson said Canada’s heavy reliance on the US as an export destination had left it vulnerable.
“Canada used to provide 98 per cent of its energy exports to a single country. That was a strategic blunder,” he said, according to Reuters. “We are committed to diversifying. We see the opportunity to work with India.”
Mr Hodgson said Canada could supply crude oil, LNG and uranium, arguing that India would be the world’s fastest-growing source of energy demand in the coming decades.
“The fastest growing demand for energy in the world will be in India,” he said.
Canada currently doesn’t export crude or LNG directly to India, which gets the bulk of its oil from Russia, Iraq and Saudi Arabia, and LNG from Qatar, according to data from the analytics firm Kpler.
Over the past three years, India’s oil imports rose by an average of 2.5 per cent while LNG cargoes fell 6.3 per cent in 2025, reflecting a shift back towards oil as gas prices rose.
Indian refiners rushed to snap up Russia’s discounted crude after it went to war in Ukraine, making Moscow the South Asian country’s largest crude supplier.
Analysts note the renewed outreach from Canada comes as Delhi looks to diversify supplies amid growing scrutiny of Russian energy trade and uncertainty over future sanctions.
Mr Hodgson said Canada was laying the groundwork to make new Asian exports viable.
“We’re now building pipelines to the West Coast. We have three pipelines built here and are looking at building more,” he said.
The expansion of Canada’s Trans Mountain pipeline has opened a direct route for crude exports to the Pacific, although most Canadian shipments to India still move through the US Gulf Coast, according to Bloomberg.
Canada also began exporting LNG to Asia in June 2025, strengthening its ability to serve Asian markets. Canadian officials say its LPG terminals offer relatively short shipping routes to India compared with Atlantic suppliers.
Beyond fossil fuels, the two sides also agreed to deepen cooperation across clean energy sectors. The joint statement says Canada and India will work to facilitate reciprocal investment and explore collaboration in hydrogen, biofuels, battery storage, critical minerals, electricity systems, and the use of artificial intelligence in the energy industry.
India’s recent push to expand nuclear power generation could also support Canadian ambitions to increase uranium exports, Mr Hodgson said.
The renewed energy engagement is part of a broader diplomatic reset under prime minister Mark Carney, who has made diversifying Canada’s export markets a priority amid rising trade tensions with Washington.
Mr Carney and Indian prime minister Narendra Modi restarted talks in November on a comprehensive economic partnership agreement. The Canadian leader is expected to visit India in the coming weeks.
Two-way goods trade between Canada and India reached $9.7bn in 2024, according to Bloomberg, with Ottawa arguing there was significant room for growth, particularly in energy. India currently accounts for just 1 per cent of Canada’s critical minerals exports, a gap Canadian officials say highlights the scale of potential expansion.
The reset with India comes against a complicated global trade backdrop. Mr Carney’s expected India visit will follow his recent trip to Beijing, where Canada and China agreed to reduce tariff barriers.
US president Donald Trump threatened 100 per cent tariffs on Canadian goods if Ottawa “makes a deal with China”, although Mr Carney stressed Canada was not seeking a free trade agreement with Beijing.
For India, the talks underscore a broader effort to balance energy security, cost and geopolitics as demand rises and supply chains remain volatile.
For Canada, they represent an attempt to turn new pipeline capacity and LNG exports into long-term strategic partnerships beyond North America.
Source: independent.co.uk