Ottawa (Rajeev Sharma): Canada is stepping up its efforts to expand trade with India as rising tariff tensions with the United States push the government to seek new markets and reduce its dependence on its biggest trading partner.
Canadian Finance Minister François-Philippe Champagne has identified India as a major economic opportunity, highlighting the country’s large population and status as the world’s fifth-largest economy. Ottawa is increasingly viewing stronger commercial ties with New Delhi as an important part of its wider trade diversification strategy.
India Emerges as Key Market
Speaking to reporters, Champagne said Canada wants India to increase its trade engagement with the country and indicated that discussions with his Indian counterpart would focus on expanding economic cooperation.
The renewed attention comes as Ottawa attempts to broaden its export base. Canada has set a target of doubling exports to markets outside the United States over the next decade, while also aiming to increase annual bilateral trade with India to approximately C$70 billion by 2030.
US Tariffs Push Ottawa Towards Diversification
Canada’s efforts to find alternative markets have gained urgency following the latest escalation in its trade dispute with Washington.
Ottawa has announced around C$27.6 billion in retaliatory tariffs covering roughly 700 US products. The duties, ranging from 15% to 50%, are expected to take effect on September 8.
The Canadian government has also introduced a C$7.5 billion assistance package for businesses and workers expected to face the impact of the trade confrontation.
Industry Minister Mélanie Joly has stressed the need for Canada to take greater control of its economic future by strengthening relationships with trading partners beyond the United States.
CEPA Talks Add Momentum
Economic engagement between India and Canada has already gained momentum following the launch of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) in November 2025.
The proposed agreement is aimed at improving market access, boosting investment and strengthening supply-chain connections between the two economies. A successful trade agreement could provide Canadian exporters with greater access to India’s expanding consumer and industrial markets.
Ties Improve After Diplomatic Strain
Canada’s latest outreach to India also comes after a period of difficult diplomatic relations between the two countries, which had affected broader bilateral engagement, including trade discussions.
The relationship began moving towards a more constructive phase after Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney met during the G7 summit in June 2025.
Since then, both governments have indicated an interest in rebuilding economic and diplomatic engagement.
Ottawa Seeks Greater Economic Resilience
The United States remains Canada’s largest trading partner by a substantial margin, making the latest tariff dispute particularly significant for the Canadian economy. The new trade tensions have, however, reinforced Ottawa’s argument that greater diversification is necessary.
India is increasingly being positioned as one of the markets that could help Canada expand its presence in the Indo-Pacific. Canadian policymakers see opportunities in sectors where the two economies can complement each other and are looking to encourage businesses to explore markets beyond North America.
As uncertainty continues over the future of Canada-US trade relations, Ottawa’s growing focus on India signals a broader attempt to build a more diversified and resilient export strategy.
