Historic Trade Dialogue Resumes Between India and Canada
In a significant development for international trade relations, India and Canada have taken crucial steps to stabilize their economic partnership this week. The two nations conducted their first senior-level economic discussions since political tensions disrupted bilateral engagement last year, according to an official statement from India's Ministry of Commerce & Industry released on Friday.
The diplomatic breakthrough came during Canadian Minister of Export Promotion, International Trade and Economic Development Maninder Sidhu's official visit to New Delhi from November 11-14. Sidhu traveled at the personal invitation of Commerce and Industry Minister Piyush Goyal, setting the stage for the seventh Ministerial Dialogue on Trade and Investment between the two counterparts.
Rebuilding Bridges After Diplomatic Strain
The renewed engagement follows directions provided by both countries' prime ministers during their bilateral meeting at the G7 summit in Kananaskis, Canada. This was further reinforced by the foreign ministers' joint statement on October 13, 2025, titled 'Renewing momentum towards a stronger partnership,' which specifically identified trade as the cornerstone of bilateral economic growth and resilience.
During the dialogue, both ministers reaffirmed the strength and continuity of the India-Canada economic partnership and committed to deepening bilateral cooperation through sustained dialogue, mutual respect, and forward-looking initiatives. This marks a substantial improvement in relations that had reached one of their lowest points in decades.
The relationship deterioration stemmed primarily from long-standing tensions concerning the Khalistan separatist movement. Matters escalated dramatically after the June 2023 killing of Sikh activist Hardeep Singh Nijjar in British Columbia. Then Prime Minister Justin Trudeau's claims of credible evidence linking the incident to Indian government agents - which New Delhi rejected as baseless - triggered reciprocal diplomatic expulsions and froze trade negotiations.
Robust Trade Growth Defies Political Challenges
Despite the political headwinds, economic ties between the two nations demonstrated remarkable resilience. The ministers noted robust growth in bilateral trade in goods and services, which reached an impressive $23.66 billion in 2024. Merchandise trade alone was valued at nearly $8.98 billion, representing a substantial 10% increase over the previous year.
This represents a dramatic $12.7 billion increase from 2023 figures, underscoring the underlying strength of economic complementarities between the two nations. The ministers emphasized the importance of continued engagement with the private sector to unlock new opportunities for trade and investment.
Both leaders welcomed the steady expansion of two-way investment flows, including notable Canadian institutional investment in India and the growing presence of Indian firms in Canada. These investments collectively support tens of thousands of jobs in both economies. The ministers committed to maintaining an open, transparent, and predictable investment environment.
Focus on Emerging Sectors and Future Collaboration
The discussions between Ministers Goyal and Sidhu placed significant emphasis on emerging sectors where the two economies see strategic complementarities. The ministers agreed to promote long-term supply chain partnerships in critical minerals, an area central to their clean-energy transitions.
Additionally, they committed to deepening collaboration in aerospace and dual-use industrial capabilities. Canadian firms have maintained a longstanding presence in India, while India's aviation market ranks among the fastest-growing globally, creating natural synergies for enhanced cooperation.
The ministers expressed satisfaction with the progress made in strengthening bilateral economic engagement and reaffirmed their shared commitment to elevate the economic partnership to reflect global developments and evolving supply chain dynamics. They emphasized maintaining momentum in bilateral dialogue and supporting people-to-people ties, which provide a strong foundation for the partnership.
This renewed engagement signals a positive shift in India-Canada relations, demonstrating that economic pragmatism can overcome political differences when both nations recognize the mutual benefits of cooperation.
