Council on Energy, Environment and Water Integrated | International | Independent
India and Canada just opened the fifth round of talks on a Comprehensive Economic Partnership Agreement (CEPA), as the latter’s Minister of International Trade, Maninder Sidhu, prepares to lead a Team Canada trade mission to India. Indian Commerce Minister Piyush Goyal has called the next 90 days “a very defining period” for two countries whose trade talks restarted just earlier this year. The two governments want bilateral trade to reach CAD 70 billion (~INR 4,65,000 crore) by 2030, more than double 2025’s CAD 30.4 billion (~INR 2,06,000 crore) in goods and services.
Providing more Canadian oil and gas to support an energy-secure India may seem like an obvious route to achieving those goals, but it is more quick fix than long-term solution. A more strategic approach would focus on areas that provide compounding value: reactors, processed minerals, and finished goods that outlast freight cycles and build industry in both countries.
Crude may be a reasonable entry point, but it builds weak foundations for a lasting partnership. India’s imports of Canadian crude jumped 52 per cent in 2025, to 84,000 barrels a day, and the leaders’ March joint statement welcomed more crude, LNG, and LPG. Yet Canada’s Pacific oil terminal near Vancouver loads only mid-sized Aframax tankers, not the long-haul super-tankers needed to keep freight competitive. Most Asia-bound cargoes were transferred to larger ships off California before crossing the Pacific, and a surge in freight rates has only recently changed that calculus. Trade built on bulk molecules is hostage to freight markets, port constraints, and commodity cycles.
First, lead with nuclear. India’s heavy-water reactor programme began with Canada: the Rajasthan units, built under a 1963 agreement, were “closely patterned” on Canada’s Douglas Point reactor. I. After decades of estrangement, a 2010 cooperation agreement, operationalised in 2013 under International Atomic Energy Agency (IAEA) safeguards, restored trade. This March, Cameco and India’s Department of Atomic Energy (DAE) signed an INR 17,600 crore (CAD 2.6 billion) contract for nearly 22 million pounds of uranium over 2027–2035. India now targets 100 GW of nuclear power by 2047, with INR 20,000 crore set aside for at least five small modular reactors (SMRs) by 2033. The SHANTI Act of December 2025 opened the sector to private operators.
Canada has also just finished refurbishing four CANDU units at Darlington, ahead of schedule and INR 1,000 crore (CAD 150 million) under its INR 86,800 crore (CAD 12.8 billion) budget, extending their lives to 2055. That retubing and life-extension know-how is directly relevant to India’s own heavy-water fleet. Canada is also building the G7’s first grid-scale SMR, due online by 2030. Canadian uranium and expertise could complement Indian engineering and manufacturing.
Second, critical minerals. India’s critical mineral imports rose from INR 20,500 crore in 2020–21 to INR 54,300 crore in 2023–24, much of it from China. India takes only ~2 per cent of Canada’s critical mineral exports. March’s MoU on Critical Minerals Value Chains covers beneficiation and processing, which is where the value lies: Canadian deposits and processing know-how paired with Indian demand, manufacturing scale, and capital. Canadian pension funds are major investors in India but have so far stayed out of its minerals sector.
Third, and most important, value-added goods. Instead of shipping raw energy across an ocean, the economies should trade in their products: processed minerals and battery materials, low-carbon aluminium and steel, and refined fuels. The joint statement already envisions India-refined petroleum products flowing to Canada. Such goods carry more value per tonne, depend less on specialised energy infrastructure, and build industrial capability in both countries.
A relationship that delivers on these opportunities must be built for long-lived investment outside tariff lines. The following principles matter.
Certainty for long-lived bets. Processing plants, reactor supply chains, and factories are investments that pay back over decades. Whether through the CEPA or the investment agreement being negotiated alongside it, investors need confidence the rules will hold. In addition, a mutual recognition of conformity assessment and shared mineral traceability standards would cut costs and appeal to third markets. With the EU's carbon border adjustment in its definitive phase from January 2026, aligned emissions accounting for steel, aluminium, cement and fertilisers would earn both India and Canada a premium for cleaner products.
Value chains that span both countries. The agreement should reward goods processed in one country and finished in the other, and help both earn a premium for cleaner products as carbon border measures spread. Nuclear is the clearest test of this. A reactor runs for six decades or more, and the supply chain around it, from fuel to components to long-term servicing, lasts just as long. Building that chain across both countries and joint innovation of new technologies like SMRs, firmly within existing safeguards, would anchor the relationship for a generation. The CEPA should make this a shared priority and commit both sides to aligning the regulatory frameworks needed to unlock it.
Institutional ballast supporting ties. Export credit agencies, development finance institutions and pension funds on both sides could de-risk early processing and manufacturing projects. Where energy trade continues, long-term contracts should reduce the penalty of distance. Standing mechanisms, such as the annual critical minerals dialogue and a joint minerals working group, could keep commerce moving even if politics turn difficult in the future.
A deal measured in barrels will certainly open the door, but will rise and fall with freight rates and oil prices. A deal measured in shared reactors, processing plants and factories builds the foundation for a compounding relationship. The next 90 days are a chance for India and Canada to choose the correct path.
Karthik Ganesan is Director of Strategic Partnerships at the Council on Energy, Environment and Water (CEEW). Moe Kabbara is CEO of the Transition Accelerator. Send yoru comments to [email protected].
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