Despite ongoing diplomatic tensions, trade between India and Canada has remained stable, even experiencing modest growth in 2024. Bilateral trade in goods totaled approximately ₹69,368 crore (CA$ 11.36 billion) last year, an increase from ₹65,723 crore (CA$ 10.74 billion) in 2023, according to Statistics Canada. This marks a significant 64% growth from 2020 when trade stood at CA$ 7.63 billion (₹42,139 crore).
Data from India’s Consulate in Toronto also supports this trend, showing a moderate increase in trade between January and November 2024. Key Indian exports to Canada include pharmaceuticals, jewelry, smartphones, seafood, and diamonds, while India’s major imports from Canada consist of peas, bituminous coal, lentils, potassium chloride, and newsprint.
This economic stability is notable given the sharp deterioration in relations following Canadian Prime Minister Justin Trudeau’s September 2023 statement in Parliament regarding the alleged involvement of Indian agents in the killing of pro-Khalistan leader Hardeep Singh Nijjar. The situation escalated further when India withdrew six diplomats from Canada in response to accusations of their involvement in violent criminal activities. In retaliation, India expelled six Canadian diplomats.
Despite these tensions, economic cooperation has been largely shielded from political disputes. “Both governments have tried to protect the economic relationship. There is desire on both sides to ringfence it from the political and diplomatic crisis,” said Vina Nadjibulla, vice-president of research and strategy at the Vancouver-based Asia-Pacific Foundation of Canada.
Negotiations for an Early Progress Trade Agreement (EPTA) were underway before the crisis, but Ottawa paused talks in August 2023. While the future of trade agreements remains uncertain, sub-national engagements continue, with trade delegations from Alberta and Saskatchewan visiting India this month. Nadjibulla also noted that changing global trade policies, including U.S. tariff threats under former President Donald Trump, are prompting governments to reassess economic strategies.
Despite political friction, India and Canada’s economic ties remain strong, underscoring the complementary nature of both economies and the mutual benefits of continued trade engagement.
