Let’s Talk Canada

Canada has long occupied an oddly marginal place in India’s strategic imagination: important without being indispensable and familiar without being especially consequential. This odd relationship could now be changing because the geography and economics of global power are shifting beneath both countries.

Canada sits on extraordinary reserves of energy, agricultural wealth and critical minerals, while its vast northern frontier is acquiring new strategic importance as the Arctic becomes increasingly accessible. The retreat of sea ice is transforming what was once regarded as a frozen periphery into a potential theatre of commerce, competition and military strategy, with Russia, China, the United States and NATO all recalibrating their interests in the region.

For India, however, Canada’s importance is in what lies beneath Canadian soil and in the strategic commodities that India will increasingly require as it moves into its next phase of industrialisation.

India will need enormous quantities of energy and raw materials to sustain its growth, including uranium to expand nuclear power, natural gas to diversify its energy basket, critical minerals for batteries and advanced manufacturing.

New Relationship

Canada happens to have many of these things, which could become the foundation of a new relationship. Nothing illustrates the strategic logic better than nuclear energy, because India cannot realistically meet its long-term energy and decarbonisation goals without substantially expanding nuclear power, and that expansion requires not only reactors and technology but also a dependable supply of nuclear fuel that Canada can provide.

In March, India and Canada’s Cameco signed a $2.6 billion agreement under which Cameco will supply nearly 22 million pounds of uranium to India between 2027 and 2035, an arrangement that should be viewed as considerably more than another commodity contract because it forms part of the architecture of India’s long-term energy security.

For decades, India’s access to nuclear technology and fuel was constrained by the politics of the global nuclear order, but its position has since changed dramatically, and a dependable Canadian uranium supply can now become an important component of a diversified fuel strategy as India seeks to expand nuclear generation.

The second area could prove even more important because the technologies India wants to scale - from electric vehicles and batteries to renewable-energy systems, electronics and advanced manufacturing - depend on minerals such as lithium, nickel and cobalt, making access to these resources increasingly a question of national strategy rather than simply international commerce.

Canada is unusually well placed in this emerging mineral economy, while India has the manufacturing scale, engineering capabilities and enormous consumer market capable of turning secure supplies of minerals into industrial capacity.

The two countries have already agreed to cooperate across the critical-minerals value chain, from exploration and mining to processing, investment and technological exchange, and this is where the relationship could become genuinely strategic.

Critical Minerals

Indian companies need not simply buy Canadian minerals; they can invest in Canadian mining and processing projects, secure long-term supply contracts and participate in the construction of entire supply chains, while Canadian companies can gain access to India’s expanding manufacturing ecosystem and one of the world’s fastest-growing major markets.

Energy provides another obvious bridge because India’s requirements will rise sharply as urbanisation, manufacturing and incomes expand, while Canada is simultaneously looking for markets beyond the United States, making LNG, LPG, uranium, hydrogen and other forms of energy cooperation natural areas for deeper engagement.

For India, Canadian energy can provide another source of diversified supply at a time when energy security increasingly depends on having multiple suppliers and routes; for Canada, India offers precisely the kind of enormous and growing market required if Ottawa wants to reduce its dependence on Washington.

Canada’s economic relationship with the United States has historically been so deep that diversification was easier to discuss than to achieve, but a more protectionist American trade environment is forcing Ottawa to think seriously about alternatives, and India is one of the few economies large enough to make a meaningful difference.

India is an answer to one of Canada’s most pressing economic problems: excessive dependence on the American market.

As Washington embraces a more protectionist and unpredictable trade policy, Ottawa has an obvious incentive to look towards Europe and the Indo-Pacific, and India is particularly attractive because it combines scale, growth, a rapidly expanding industrial base and a sophisticated digital economy.

Indian companies, meanwhile, can bring capital, manufacturing capacity, technology and market access to Canadian projects, while opportunities extend beyond minerals and energy into aerospace, clean technology, life sciences, digital services and infrastructure.

That is why the proposed Comprehensive Economic Partnership Agreement matters, and why its success should not be measured merely by whether bilateral trade rises from roughly $30 billion to a much larger figure.

Political Thaw

A successful agreement should encourage long-term investment, reduce barriers to services and technology, establish predictable rules for business and make it easier for companies in both countries to build integrated supply chains in sectors that matter to their future economic security.

The political thaw has already produced tangible results, with Prime Minister Mark Carney’s visit to India producing agreements on uranium and critical minerals while the two countries have moved towards a formal framework for negotiating the CEPA, with the negotiations now aimed at concluding an agreement by the end of 2026.

Canada is discovering that its geography has become an asset in an age of Arctic competition and fragmented globalisation, while India is discovering that its enormous market has become an asset in an era when countries everywhere are looking for alternatives, partners and resilient supply chains. For years, India and Canada looked at each other largely through the rear-view mirror of politics. The new India–Canada relationship can be built on something much harder to ignore: mutual economic need.

(The writer is a foreign affairs expert. Views personal)