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Trade Partner Profile: India

Canadian Economics

By: Liam Daly

In 2024, Canada exported $5 billion of goods to India and imported approximately $8 billion dollars worth. Indian imports of Canadian goods represent approximately 0.7 per cent of Canada’s goods exports, making India the tenth-largest buyer of Canadian products.

  • Canada’s principal exports to India consist of agricultural products, specifically dried legumes, and energy products, predominantly coal, as well as wood pulp and fertilizers.
  • Meanwhile, Canada’s principal imports from India consist of pharmaceuticals, machinery, both nuclear and electronic, as well as several classes of consumer goods including jewelry and clothing.
  • Political tensions have strained diplomatic relations, particularly due to suspicions of Indian agents being involved in assassinations within the country. Despite turbulence in the relationship, trade between the two nations has remained relatively stable and largely free of punitive restrictions.

A Stirring Giant

  • India’s population of 1.4 billion people provides a vast consumer base for Canadian exporters. Its economy is among the largest globally, ranking fifth by nominal GDP, and is projected to continue a path of rapid growth, driven by growth in sectors including technology, manufacturing, and services.
  • The Canadian government views India as a high-priority trading partner. In 2010, negotiations towards a Canada–India Comprehensive Economic Partnership Agreement (CEPA) were launched. These negotiations have since stalled with the most recent meetings occurring in 2021, despite efforts to reboot the process in 2022.
  • The relationship between India and Canada is underpinned by a vibrant long-established Indian diaspora in Canada. With over 1.8 million Canadians of Indian origin, the Indo-Canadian community serves as a bridge between the two nations.
  • Roughly a quarter of Canada’s exports to India are dried legumes. In 2017, India imposed tariffs on Canadian exports of legumes in an effort to protect domestic production. These tariffs were lifted in 2023, and exports of this product have since rebounded. Given the country’s growing urban population, food demand is set to rise, providing opportunity for further growth in exports of Canadian agricultural products.
  • Energy exports, specifically coal, account for roughly 13 per cent of Canadian exports to India by value, having risen steadily between 2011 and 2019. In 2020, the liberal party promised that exports of thermal coal would cease by 2030. After a brief lull in 2020 and 2021, coal exports rose to a peak in 2022 as global petroleum supplies were interrupted by the war in Ukraine. Coal exports have since fallen back, totalling just shy of $500 million in 2024.
  • Looking ahead, India plans to dramatically increase domestic production by 42 per cent between 2025 and 2030, reducing reliance on foreign suppliers. A combination of rising domestic production and further steps by the Canadian government to reduce exports will see coal sales to India fall over the next decade. As coal exports are wound down, there is scope to grow exports of petroleum oil and natural gas.
  • In 2024, Canada exported roughly 500 million dollars of wood pulp, a material primarily used for paper manufacture, to India. Exports have roughly doubled over the last decade, and this export category is likely to experience increased demand in the years ahead as India’s service sector expands.
  • Canada also exports large amounts of newsprint paper to India, which is the second largest buyer behind the United States. Despite the rise of digital news platforms, printed newspapers are still widely consumed in India, which will sustain demand for this product.
  • Exports of fertilizers, including potash, to India have grown over the last two decades. In 2022, Indian Potash Limited signed a memorandum of understanding with Canpotex, Canada outlining an agreement to supply up to 1.5 million tonnes of potash annually for a period of 3 years to Indian fertilizer companies. Given India’s sizeable agricultural sector, demand for Canadian fertilizers continues to offer good growth potential.
  • India is one of the world’s principal diamond processing centres and is an important buyer of Canadian diamonds. Canadian diamond production, located across three mines in the Northwest Territories, is post-peak. Over the remainder of the decade, production at the mines is expected to wind down and will cease completely by 2031, unless new diamond projects are developed.
  • India imported gold worth just over 50 billion USD in 2024. Widespread economic uncertainty has driven gold prices to record highs in recent months. Supported by a buoyant price outlook, Canadian gold production is on an upward trend and India is an important destination for the precious metal.
  • Canadian exports of copper ore have remained effectively flat over the last decade. India has increasingly sought to import refined copper in place of copper ore with refining capacity in the country reduced following the closure of a key smelting plant in 2018.

A Look Ahead

  • Looking ahead, India remains an attractive export market, but the product mix is shifting. Demand for coal is set to taper, while demand for Canadian critical minerals is likely to rise, behind strong demand from India and large reserves in Canada. Nickel is a prime example of a rapidly growing critical mineral export, with its value having doubled over the past decade.
  • India’s digital economy is growing much quicker than the overall economy. According to estimates by the Indian Council for Research on International Economic Relations the digital economy is projected to account for 20 per cent of national income by 2029. This means services trade, both in imports and exports, will play an increasingly important role in the trading relationship moving forward.
  • In a time of rising U.S. protectionism and ongoing trade disputes with China, a trade deal with India would allow Canada to diversify its export portfolio and greater access to rapidly growing consumer demand. Recent trade agreements signed by India with countries such as the UAE, Australia, and the United Kingdom reflect the nation’s openness to global commerce and a willingness to grant foreign access to its market in order to secure access to essential industrial inputs, including raw materials and critical minerals.
  • The trade deal signed by India with the United Kingdom saw tariffs for many U.K. exports reduced. An important hurdle in the deal pertained to visa rules affecting Indian’s wishing to work and study in the United Kingdom. While Canada is currently in the process of reducing international migration, a future trade deal with India would also likely require negotiation on visas for Indians and possible social security exemptions for workers arriving in Canada.
  • Indian demand for Canadian agricultural products, including food and fertilizers, will remain a cornerstone of bilateral trade. As India’s middle class expands, demand for high-quality food products is expected to grow, creating new opportunities for Canadian pulse exports. While canola exports to India are currently limited, ongoing trade tensions with the U.S. and China highlight the strategic value of diversifying markets and expanding trade with India.
  • In India, natural gas consumption is projected to increase by 60 per cent between 2023 and 2030, according to the International Energy Agency. This surge in demand is expected to double the country’s LNG import requirements, as domestic production is expected to grow at a much slower pace.
  • The share of petroleum oil exported to countries other than the United States rose notably in 2024. Increased Canadian production and turbulence in U.S. trade policy have fueled sales of Canadian oil to several Asia nations. While China is the largest buyer, there are signs of growing Indian interest. In 2024, the Indian energy multinational, Reliance Industries, purchased 2 million barrels of Canadian crude, the first shipment from the Trans Mountain pipeline. The flow of oil through the extended pipeline is expected to rise in the coming years. At the same time, urbanization and a growing middle class in India will see per-capita energy consumption grow, presenting an opportunity for increased exports of Canadian petroleum to India.

Chart 1

What Canada Exports to India

(2024 exports, $CAD, billions)

Bar chart indicating Canada's main exports to India. In order, they are: dried legumes, coal, wood pulp, fertilizers, paper products, copper ore, iron (waste and scrap), petroleum oil, aluminium, nickel

Sources: U.N. Comtrade, The Conference Board of Canada.

Chart 2

What India Imports from the World

($US, billions)

Bar chart indicating India's main imports from the world. In order, they are: coal, electrical machinery, gold, petroleum pils, natural gas, organic chemicals, diamonds, aircraft and aircraft parts, copper, palm oil.

Notes: Bars highlighted in red indicate export opportunities for Canada.
Sources: U.N. Comtrade, The Conference Board of Canada.

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