India and Canada Reopen Trade Dialogue After Years of Turbulence

India and Canada have taken a decisive step toward rebuilding a strained diplomatic and economic relationship by reviving their Ministerial Dialogue on Trade and Investment (MDTI). Held in New Delhi from 11 to 14 November 2025, the meeting brought together India’s Commerce and Industry Minister Piyush Goyal and Canada’s Minister of Export Promotion, International Trade and Economic Development, Maninder Sidhu. This marks the first significant trade engagement since diplomatic tensions froze discussions in previous years. The renewed dialogue follows interventions at the G7 Summit and a joint statement issued by both foreign ministers in October 2025, reaffirming trade as a foundation of bilateral ties.

Union commerce and industry minister Piyush Goyal and Canada’s minister of international trade Maninder Sidhu at the 7th India-Canada Ministerial Dialogue on Trade and Investment in New Delhi on Thursday. Photo: @PiyushGoyal X/ANI | Mint

The Economic Landscape and Rising Opportunities

Bilateral Trade Trends and Investment Flow

Despite the diplomatic rift of recent years, trade between India and Canada has continued to grow steadily. Bilateral trade in goods and services reached nearly USD 23.66 billion in 2024, driven by expanding merchandise trade valued at around USD 8.98 billion. Both nations acknowledged the steady rise in two-way investment, with Canadian pension funds and institutional investors deepening their presence in India and Indian companies expanding operations across Canadian provinces. These investment flows have contributed to employment generation and greater economic interdependence, making the revival of formal dialogue both timely and essential.

Sectors Emerging as Pillars of Cooperation

During the Delhi dialogue, both countries identified several strategic sectors that offer substantial potential for long-term partnership. Critical minerals emerged as a top priority, with Canada’s rich reserves aligning with India’s growing demand for clean-energy materials. Aerospace and dual-use industrial technologies were also emphasised, underscoring India’s rapidly expanding aviation market and Canada’s globally recognised aerospace capabilities. Discussions further extended to agriculture, artificial intelligence, and broader supply-chain resilience—areas that have gained global relevance amid geopolitical uncertainty and technological transformation.

The Diplomatic Backdrop

A Difficult Past and a Necessary Reset

The decision to revive trade dialogue follows a difficult phase in India-Canada relations. The deterioration began after the 2023 killing of Hardeep Singh Nijjar in British Columbia, which led to allegations from the Canadian government and strong denials from India. The fallout included diplomatic expulsions, suspended trade talks, and heightened mistrust. However, the economic realities of a rapidly changing world have pushed both nations toward recalibration. Canada’s need to diversify its trade partnerships beyond the United States and India’s pursuit of stable, technology-driven global collaborations created a natural pathway for engagement to resume.

A Forward-Looking Partnership

Resetting Priorities and Building New Channels

With the MDTI concluded on a positive note, both sides expressed interest in maintaining momentum through sector-specific discussions and business-level engagement. India is expected to send a high-level trade and investment delegation to Canada in the coming months, while Canadian businesses have shown renewed interest in tapping into India’s expanding energy, infrastructure, and digital markets. The ministers highlighted the importance of restoring people-to-people ties—especially student mobility and diaspora engagement—as these form the social backbone of bilateral relations.

The MGMM Outlook

In our view, the revival of India–Canada trade dialogue marks a long-overdue correction to years of avoidable diplomatic turbulence. The MDTI meeting in New Delhi signals that both nations have finally recognised the cost of letting political disagreements overshadow economic logic. Trade continued to grow even during the freeze, proving that the real drivers of the relationship are business, investment, and people-to-people linkages—not political posturing. Canada’s pension funds, Indian companies expanding into Canadian provinces, and the rising interdependence in sectors like critical minerals, aerospace technologies, and clean-energy supply chains show that cooperation was never just desirable but necessary. The renewed dialogue is simply an acknowledgment of this underlying reality.

From our perspective, this reset is also a broader reflection of shifting global priorities. Canada cannot remain overdependent on the U.S. market, and India’s rise as a technology, manufacturing, and energy powerhouse makes it an essential partner. The move to restart structured engagement—student mobility, high-level delegations, sectoral talks—is a pragmatic step forward, not a symbolic one. By aligning interests in AI, agriculture, minerals, and dual-use industrial technologies, both countries are positioning themselves for a more stable, opportunity-driven partnership. The past diplomatic rift may have slowed momentum, but the future now appears anchored in economic necessity, strategic clarity, and mutual benefit.

(Sources: Mint, Economic Times, OpIndia)