Investment opportunities increase as diplomatic relations between Canada and India improve. In addition to boosting investor confidence and paving the way for long-term economic stability in both countries, this revitalized partnership may fuel a boom in bilateral trade. Find out what makes this cooperation so promising.
Investment opportunities increase as diplomatic relations between Canada and India improve. In addition to boosting investor confidence and paving the way for long-term economic stability in both countries, this revitalized partnership may fuel a boom in bilateral trade. Find out what makes this cooperation so promising.After two years of tense relations, Canadian Foreign Minister Anita Anand said Monday that Canada and India will move quickly on the trade deal, following the Modi-Carney meeting, according to news agency AP.
Anand emphasized Carney's goal of doubling non-US trade within ten years and mentioned Ottawa's new foreign strategy in reaction to US President Donald Trump's trade war.
1. Relationship revival boosts investor confidence
Investor confidence increases as diplomatic tensions are reduced. Political stability is shown by the easing of tensions, which lowers the perceived risk for Canadian pension funds, banks, and businesses thinking about making long-term investments in India.
Anand emphasized Carney's goal of doubling non-US trade within ten years and mentioned Ottawa's new foreign strategy in reaction to US President Donald Trump's trade war.
1. Relationship revival boosts investor confidence
Investor confidence increases as diplomatic tensions are reduced. Political stability is shown by the easing of tensions, which lowers the perceived risk for Canadian pension funds, banks, and businesses thinking about making long-term investments in India.
India's capital markets and investment ecosystem may be significantly impacted by a resurgence of India-Canada economic and strategic ties, particularly through institutional investors, pension funds, and trade-focused organizations.
By 2030, India wants to raise bilateral trade to $50 billion. According to experts, a $50 billion export represents a "recalibration of trade priorities designed to build resilience and expand high-value sectors" in addition to being an economic milestone.
Prof. Sanjal Shastri of FLAME University's Faculty of International Studies told LiveMint that "real progress will depend on restoring strategic trust, and the groundwork being laid today reflects an attempt to undo much of the diplomatic strain experienced during the previous Canadian government."
By 2030, India wants to raise bilateral trade to $50 billion. According to experts, a $50 billion export represents a "recalibration of trade priorities designed to build resilience and expand high-value sectors" in addition to being an economic milestone.
Prof. Sanjal Shastri of FLAME University's Faculty of International Studies told LiveMint that "real progress will depend on restoring strategic trust, and the groundwork being laid today reflects an attempt to undo much of the diplomatic strain experienced during the previous Canadian government."
2. India as a developing market
Funds such as CPPIB, CDPQ, and OTPP have made significant investments in renewable energy, real estate, and infrastructure in India. New promises and outstanding projects could be accelerated by a reset between Canada and India.
According to trade analysts, business expectations have already increased as a result of the revived diplomatic engagement. Ajay Sahai, director general of the Federation of Indian Export Organizations (FIEO), recently told Mint that "the resumption of free trade agreement (FTA) talks between India and Canada is a highly positive signal for exporters."
"Real opportunities for Indian sectors like textiles, engineering goods, pharma, and agri-products can be unlocked by faster market access and lower tariffs," he stated.
Funds such as CPPIB, CDPQ, and OTPP have made significant investments in renewable energy, real estate, and infrastructure in India. New promises and outstanding projects could be accelerated by a reset between Canada and India.
According to trade analysts, business expectations have already increased as a result of the revived diplomatic engagement. Ajay Sahai, director general of the Federation of Indian Export Organizations (FIEO), recently told Mint that "the resumption of free trade agreement (FTA) talks between India and Canada is a highly positive signal for exporters."
"Real opportunities for Indian sectors like textiles, engineering goods, pharma, and agri-products can be unlocked by faster market access and lower tariffs," he stated.
However, the Canadian side reportedly set a goal of $70 billion by 2030. The disparity between Canada's and India's goals is a reflection of Canadian companies' optimistic view of the potential of the Indian market. According to official figures posted on the website of the Indian Consulate General in Toronto, bilateral commerce in products and services between India and Canada was approximately $22.6 billion in 2024.
Recall that almost fifteen years ago, Canada and India began negotiations for a similar trade agreement, but it was later reduced to a sectoral agreement that would only affect particular industries.
Recall that almost fifteen years ago, Canada and India began negotiations for a similar trade agreement, but it was later reduced to a sectoral agreement that would only affect particular industries.
Canada sends more than 75% of its goods to the US due to its strong reliance on commerce. The United States–Mexico–Canada trade agreement (USMCA) protects the majority of US exports, but it will be reviewed in 2026.
After two years of tense diplomatic relations, India and Canada are finalizing an agreement to export uranium to New Delhi, which is another indication of improving relations, according to The Globe and Mail.
According to those acquainted with the situation, the transaction is probably worth about $2.8 billion and has a ten-year term. They cautioned that the parameters of the agreement could change prior to the announcement.
3. Stability across time
After two years of tense diplomatic relations, India and Canada are finalizing an agreement to export uranium to New Delhi, which is another indication of improving relations, according to The Globe and Mail.
According to those acquainted with the situation, the transaction is probably worth about $2.8 billion and has a ten-year term. They cautioned that the parameters of the agreement could change prior to the announcement.
3. Stability across time
After then-Canadian Prime Minister Justin Trudeau accused Indian government operatives of potentially being involved in the death of Khalistan rebel Hardeep Singh Nijjar, who was living in Canada, trade negotiations between the two countries were halted in late 2023. India dismissed this accusation as "absurd."
Since Ottawa's leadership changed in March, the two nations have taken steps to mend fences.
Modi and Carney met at the G7 summit in June. This year, there have been three meetings between the foreign ministers of both nations. And Canada’s trade minister also visited India this month
However, Prof. Shastri stated that "Canada's willingness to take concrete action against anti-India extremist elements that undermine bilateral confidence will be crucial to the long-term stability in India-Canada relations."
Since Ottawa's leadership changed in March, the two nations have taken steps to mend fences.
Modi and Carney met at the G7 summit in June. This year, there have been three meetings between the foreign ministers of both nations. And Canada’s trade minister also visited India this month
However, Prof. Shastri stated that "Canada's willingness to take concrete action against anti-India extremist elements that undermine bilateral confidence will be crucial to the long-term stability in India-Canada relations."
4. Increased investment in India
Canada presents itself as a significant participant in climate finance. They stated that increased funding for battery storage, green hydrogen, and renewable energy could result from a reinvigorated involvement. Additionally, it would entail participation in blended financing projects with Indian banks and direct Canadian support for India's energy transition objectives.
According to Prof. Shastri, "if this reset continues meaningfully, renewed Canadian interest could unlock stronger capital flows into India through investment in technology, clean energy, and services, complementing India's manufacturing and digital-innovation strengths."
Canada presents itself as a significant participant in climate finance. They stated that increased funding for battery storage, green hydrogen, and renewable energy could result from a reinvigorated involvement. Additionally, it would entail participation in blended financing projects with Indian banks and direct Canadian support for India's energy transition objectives.
According to Prof. Shastri, "if this reset continues meaningfully, renewed Canadian interest could unlock stronger capital flows into India through investment in technology, clean energy, and services, complementing India's manufacturing and digital-innovation strengths."
5. Trade volume between Canada and India
India and Canada's bilateral commerce has grown over time, embracing commodities like energy, machinery, agricultural products, and precious stones. Canada exports a significant quantity of machinery, oil, lumber, and pulses to India. Pharmaceuticals, textiles, auto parts, and IT services are among the goods that India exports to Canada.
However, Prof. Shastri says that higher education is an important area to keep an eye on. According to him, one of the biggest links between our two nations is student mobility and institutional cooperation.
Positive innovations that facilitate more seamless academic routes and research collaborations are possible. Prof. Shastri told LiveMint, "Deeper economic and educational cooperation could ultimately create a mutually beneficial model that supports economic expansion while strengthening people-centric diplomacy."
India and Canada's bilateral commerce has grown over time, embracing commodities like energy, machinery, agricultural products, and precious stones. Canada exports a significant quantity of machinery, oil, lumber, and pulses to India. Pharmaceuticals, textiles, auto parts, and IT services are among the goods that India exports to Canada.
However, Prof. Shastri says that higher education is an important area to keep an eye on. According to him, one of the biggest links between our two nations is student mobility and institutional cooperation.
Positive innovations that facilitate more seamless academic routes and research collaborations are possible. Prof. Shastri told LiveMint, "Deeper economic and educational cooperation could ultimately create a mutually beneficial model that supports economic expansion while strengthening people-centric diplomacy."
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