Canada, India pledge to grow oil, petroleum trade in energy reset

The expansion of the Trans Mountain pipeline has opened a direct path for crude shipments to the Asian giant

Published Tue, Jan 27, 2026 · 01:16 PM

Canada and India will pledge to expand trade in oil and gas as the countries reboot their relationship after a diplomatic chill.

Ottawa will commit to ship more crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to India, while New Delhi will send more refined petroleum products to Canada, following a meeting between Canadian Energy Minister Tim Hodgson and Indian Petroleum and Natural Gas Minister Hardeep Singh Puri, according to a joint statement seen by Bloomberg News.

The ministers will meet at India Energy Week in Goa on Tuesday (Jan 27), using the event to relaunch a “ministerial energy dialogue”. The mechanism, once the main channel for energy cooperation between the two countries, fell dormant amid an explosive dispute over the killing of a Canadian Sikh activist.

The renewed push marks one of Prime Minister Mark Carney’s major efforts to diversify Canada’s export markets at a time of escalating trade tensions with the US. It also reflects his government’s shift towards pragmatic, economy-first diplomacy with major Asian partners.

Hodgson and Puri will also commit to facilitating greater reciprocal investment in each other’s energy sectors and to exploring collaboration in areas including hydrogen, biofuels, battery storage, critical minerals, electricity systems and the use of artificial intelligence in the energy industry, according to the statement.

The relaunch of the dialogue signals that both governments see untapped potential – and strategic value – in tightening an energy relationship that had been left to drift.

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Carney is expected to visit India in the coming weeks as part of the reset. He and Prime Minister Narendra Modi restarted talks in November towards a comprehensive economic partnership agreement.

Two-way goods trade between Canada and India hit C$13.3 billion (S$12.3 billion) in 2024, and Ottawa sees far more room to grow – especially in energy. India accounts for just 1 per cent of Canada’s critical minerals exports, a gap the government says underscores the scale of the opportunity. Canada began exporting LNG to Asia as at June 2025, and its LPG terminals have relatively short shipping routes to India.

The expansion of the Trans Mountain pipeline has opened a direct path for crude shipments to India, though most Canadian barrels headed there still move through the US Gulf Coast.

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Carney’s India visit later this year will follow his recent trip to Beijing, where he and President Xi Jinping agreed to reduce tariff barriers, a move that spurred US President Donald Trump to threaten 100 per cent tariffs on Canadian goods if Ottawa “makes a deal with China”.

Carney has stressed Canada is not seeking a free trade agreement with the Asian giant. BLOOMBERG

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