Ottawa: Canada is stepping up efforts to deepen its economic engagement with India as the escalating tariff dispute with the United States forces Ottawa to rethink its heavy reliance on the American market.
Canadian Finance Minister François-Philippe Champagne has described India as a major opportunity for Canadian businesses, pointing to its vast consumer base and position as the world’s fifth-largest economy.
Speaking at a press conference, Champagne said Canada wanted stronger commercial ties with India and indicated that discussions with his Indian counterpart would focus on expanding trade and creating opportunities for businesses in both countries.
Ottawa Accelerates Trade Diversification
Canada’s renewed focus on India comes as the trade confrontation with Washington intensifies. Ottawa has announced retaliatory tariffs worth approximately C$27.6 billion on a range of US products after negotiations with the Trump administration failed to produce a breakthrough.
The new measures cover around 700 products, with tariff rates ranging from 15% to 50%. They are scheduled to come into force on September 8.
Alongside the tariffs, the Canadian government has announced a C$7.5 billion support package aimed at helping businesses and workers deal with the economic impact of the dispute.
Industry Minister Mélanie Joly has also called for a shift in Canada’s approach to international trade, arguing that the country cannot afford to have its economic future determined solely by developments in Washington.
India Seen as Major Alternative Market
The Canadian government has set an ambitious target of doubling exports to markets outside the United States over the next decade. Ottawa also wants to increase annual two-way trade with India to around C$70 billion by 2030.
India’s large population, expanding economy and growing demand across multiple sectors make it an important destination for Canadian exporters looking to broaden their international footprint.
The two countries have already taken steps towards rebuilding their economic relationship. Negotiations for a Comprehensive Economic Partnership Agreement (CEPA) began in November 2025, with the proposed pact aimed at improving market access and encouraging investment and supply-chain cooperation.
Diplomatic Relations Show Signs of Recovery
The renewed economic outreach follows a period of strained relations between India and Canada, during which trade discussions had faced uncertainty.
Relations began showing signs of improvement after Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney met on the sidelines of the G7 summit in June 2025. Since then, both sides have shown greater interest in rebuilding bilateral engagement.
Carney has previously highlighted India’s economic scale as an opportunity for Canadian companies seeking access to new markets.
US Dependence Drives Ottawa’s Strategy
The latest push comes against the backdrop of Canada’s deep economic integration with the United States. While Washington remains Canada’s dominant trading partner, the latest tariff measures have intensified concerns about the risks of relying too heavily on a single market.
The US has imposed tariffs of up to 50% on a section of Canadian goods, adding pressure on businesses that depend heavily on cross-border trade.
For Ottawa, strengthening economic ties with India is therefore part of a broader effort to build a more diversified trading network. Beyond India, Canada is seeking stronger commercial relationships across the Indo-Pacific, with the aim of opening additional markets for its exporters.
The shift represents a significant change in Canada’s trade strategy as the country seeks greater economic resilience amid growing uncertainty in its relationship with its largest trading partner.
