India, Canada explore energy partnership as both sides push to seal trade deal

India and Canada may explore deeper energy cooperation while expeditiously concluding negotiations for a comprehensive free trade deal, people aware of the matter said, adding that the countries plan to establish a two-way energy supply chain in which India would import Canadian oil and gas and send refined petroleum products the other way.Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney. (DPR PMO)A team of Canadian negotiators will visit New Delhi early next month to participate in the sixth round of free trade talks, they said, requesting anonymity. Both sides are making efforts to conclude negotiations for a Comprehensive Economic Partnership Agreement (CEPA) before an expected visit of Prime Minister Narendra Modi to Canada in mid-December, they added.The prime ministers of the two countries have decided to cooperate in key areas such as trade, energy, technology, security and people-to-people ties, they said.The High Commission of India in Ottawa last week announced Modi’s visit to Canada on December 11-12.Establishing a robust energy supply chain is one of the potential areas of cooperation, the people mentioned above said.Canadian oil sands are the world’s fourth largest oil deposits and it is also the fourth largest producer of crude oil in the world after the US, Russia and Saudi Arabia. It is also fifth largest producer of natural gas.Also read: India-Canada ties are on an upward trajectoryOil, gas and refined petroleum products among focus areasIndia and Canada are compatible for a robust energy supply chain. While Canada is one of the top oil and gas producers, India is the world’s third biggest crude oil consumer after the US and China. It is also the second largest consumer of liquefied petroleum gas (LPG or cooking gas) and fourth largest consumer of liquefied natural gas (LNG).“India and Canada are in talks to establish reliable supply chains in key sectors such as crude oil, LPG, LNG, potash, nuclear fuel (uranium) and refined petroleum products. India is a major refining hub and it can ensure supply of fuels and petroleum products to Canada,” one of the people cited above said.Canada, which is one of the top energy producers in the world, requires refined products in huge quantities because of geographical issues (leading to logistical hurdles) and technical reasons (such as refinery configuration). Most refineries in Canada are not configured to process heavy and bituminous crude extracted from oil sands in Alberta. But some of the Indian refineries can process any type of crude, the people said.Also read: PM Modi to visit Canada on December 11-12 as countries seek to boost tiesHigh-level visits help rebuild and deepen bilateral tiesIndia and Canada are working to deepen ties after PMs Narendra Modi and Mark Carney met at the G7 Summit in Canada in June last year and the G20 Summit in South Africa five months later. This was followed by Carney’s India visit in February-March this year. In May, commerce and industry minister Piyush Goyal led a trade mission to Canada with representatives of over 100 Indian companies. It was followed by India visits by Canadian foreign minister Anita Anand and trade minister Maninder Sidhu in mid-October. Sidhu was accompanied by a 300-strong Canadian business delegate, the largest Canadian trade delegation to India in 30 years.The people said that the negotiations for the India-Canada CEPA is progressing fast, and most of the key issues related to the free trade agreement have been resolved. Both sides are working to finalise the trade deal before December, aiming to raise two-way trade to Canadian $70 billion (US$50.4 billion) by 2030. Bilateral goods and services trade between India and Canada in 2025 was Canadian $30.4 billion (US$21.9 billion), with merchandise trade contributing Canadian $13.6 billion (US$9.8 billion).Also read: India-Canada trade sees double-digit growth amid PM Modi's December visitCanada currently exports goods such as vegetables, mineral fuels and oils, and wood pulp to India worth Canadian $3.9 billion (US $2.85 billion). It imports Indian merchandise worth Canadian $9.7 billion (US$7.08 billion), including precious stones, metals, machinery and pharmaceuticals.India and Canada launched the CEPA negotiations in New Delhi on March 2 after Goyal and Sidhu signed the terms of reference in the presence of PMs Modi and Carney. The negotiations have moved swiftly since then, and the first round of virtual talks was held in March 2026, followed by the second round in New Delhi during May 4-8, and the third round in Ottawa during July 6-10. The fourth and the fifth rounds took place in New Delhi (September 14-18) and Ottawa (October 5-9) respectively.