India, Canada look to rebuild trade ties after diplomatic rift
This week the two countries held their first senior-level economic talks since political tensions disrupted bilateral engagement last year, the commerce ministry said on Friday.
INDIA and Canada have been seeking to stabilise their trade relationship this week, having held their first senior-level economic talks since political tensions disrupted bilateral engagement last year, India’s Ministry of Commerce & Industry said on Friday.
Maninder Sidhu, Canada’s minister of export promotion, international trade and economic development, who visited New Delhi from 11-14 November at the invitation of commerce and industry minister Piyush Goyal, met with his Indian counterpart at the seventh Ministerial Dialogue on Trade and Investment.
The commerce ministry said in a statement, “Pursuant to the direction provided by the prime ministers of the two countries during their bilateral meeting on the sidelines of the G7 meeting in Kananaskis, Canada, as well as the foreign ministers joint statement on ‘Renewing momentum towards a stronger partnership’ of 13 October 2025, which identified trade as the cornerstone of bilateral economic growth and resilience, the two trade ministers held the 7th edition of the ministerial dialogue on trade and investment (MDTI).”
The ministers reaffirmed the strength and continuity of the India-Canada economic partnership and reiterated their commitment to deepening bilateral cooperation through sustained dialogue, mutual respect, and forward-looking initiatives, it added.
India-Canada ties have deteriorated sharply in recent years, largely owing to long-standing tensions over the Khalistan separatist movement.
The relationship reached a breaking point after the June 2023 killing of Sikh activist Hardeep Singh Nijjar in British Columbia, when then Prime Minister Justin Trudeau claimed there was credible evidence linking the incident to Indian government agents, an accusation New Delhi rejected as baseless.
The fallout triggered reciprocal diplomatic expulsions, a freeze in trade negotiations, and additional expulsions in late 2024, tied to Canada’s ongoing investigations. These incidents pushed the relationship between the two countries to one of its lowest points in decades.
The commerce ministry added, “The ministers noted robust growth in bilateral trade in goods and services, which reached $23.66 billion in 2024, with merchandise trade valued at nearly $8.98 billion, a substantial 10% increase over the previous year. The ministers reaffirmed the strength and resilience of the India-Canada economic partnership and emphasised the importance of continued engagement with the private sector to unlock new opportunities for trade and investment.”.
“They welcomed the steady expansion of two-way investment flows, including notable Canadian institutional investment in India and the growing presence of Indian firms in Canada, which together support tens of thousands of jobs in both economies. The ministers committed to maintaining an open, transparent, and predictable investment environment and to exploring avenues for deeper collaboration across priority and emerging sectors,” it said.
Bilateral trade in goods and services between India and Canada touched $23.66 billion in 2024, an increase of $12.7 billion from 2023.
Focus on emerging sectors
The discussions between Goyal and Sidhu focused heavily on emerging sectors, where the two economies see strategic complementarities.
The ministers agreed to promote long-term supply chain partnerships in critical minerals, an area central to their clean-energy transitions, and to deepen collaboration in aerospace and dual-use industrial capabilities, where Canadian firms have a longstanding presence in India and India’s aviation market is one of the fastest-growing globally, the commerce ministry said.
“The ministers expressed satisfaction with the progress made in strengthening bilateral economic engagement and reaffirmed their shared commitment to elevate the economic partnership to reflect global developments and evolving supply chain and trade dynamics,” it added.
“They emphasised the importance of maintaining momentum in the bilateral dialogue and supporting people-to-people ties, which provide a strong foundation for the partnership,” it said.
