Ottawa and New Delhi have agreed to expand cooperation in hydrocarbons and broader energy trade, marking another step in the gradual reset of bilateral relations between the two countries.
In a joint statement issued on Jan. 27, Canada and India said they see strong potential for collaboration in oil and gas, driven by Canada’s push to diversify energy exports and India’s position as one of the world’s largest consumers of hydrocarbons. The two sides described the partnership as a “natural and symbiotic” fit, grounded in scale, stability, and long-term opportunity.
The agreement followed a visit to India by Tim Hodgson, who met with India’s Petroleum and Natural Gas Minister Hardeep Singh Puri. The ministers agreed to deepen bilateral energy trade, with Canada supplying liquefied natural gas (LNG), liquefied petroleum gas (LPG), and crude oil. India, which has the world’s fourth-largest refining capacity, could in turn export refined petroleum products to Canada.
Both ministers also acknowledged the importance of aligning energy cooperation with climate-related objectives.
Hodgson, a former public utility executive, was appointed energy minister following Canada’s April 2025 federal election. Since taking office, he has highlighted growing international interest in Canadian energy resources during overseas visits.
The energy discussions are part of a broader diplomatic thaw that began after Mark Carney became prime minister. The joint statement noted that the Hodgson–Puri meeting followed guidance provided by Carney and Indian Prime Minister Narendra Modi during their talks at the G7 Summit in Alberta in June 2025.
Relations between the two countries gained further momentum in October 2025, when Foreign Affairs Minister Anita Anand visited India and agreed on a new roadmap for bilateral ties, with a focus on trade, climate action, and energy cooperation. A month later, Carney and Modi agreed to relaunch free trade negotiations that had been suspended in 2023 after then-prime minister Justin Trudeau accused India of involvement in the killing of pro-Khalistan activist Hardeep Singh Nijjar in British Columbia an allegation New Delhi has denied.
Both governments have said stronger ties are increasingly important amid global economic uncertainty and heightened geopolitical tensions. India has also faced pressure from U.S. trade measures, including steep tariffs linked to its purchase of Russian oil.
India’s High Commissioner to Canada, Dinesh Patnaik, told Reuters this week that Carney is likely to visit India in early March. He said agreements are expected in areas such as uranium, energy, critical minerals, and artificial intelligence, though Canada’s Prime Minister’s Office has yet to confirm the trip.
Canada remains a major oil and gas producer, with the United States still dominating as its export market. According to Natural Resources Canada, 96 percent of Canadian crude oil exports in 2024 went to the U.S., along with all of its natural gas exports.
That balance has begun to shift with the start-up of Canada’s first LNG export terminal on the West Coast. LNG Canada, located in Kitimat, British Columbia, began operations last year and involves partners including Shell, Mitsubishi, Korea Gas Corporation, Petronas, and PetroChina. Ottawa referred the project’s second phase to the Major Projects Office in September 2025 to boost export capacity, though a final investment decision has not yet been made.
Canada has also expanded its LPG export infrastructure, with two terminals operating in British Columbia and two more under construction.
On the oil side, crude from Alberta shipped via the Trans Mountain pipeline to the West Coast has found a growing market in Asia, with China currently the largest buyer. The pipeline is operating near its 890,000-barrel-per-day capacity, and further expansion has been under consideration.
In November, Ottawa and the Alberta government signed a memorandum of understanding to explore construction of a new bitumen pipeline to the West Coast to increase exports to Asian markets. The proposal is still being developed and comes with federal conditions, including the integration of carbon capture and storage, higher industrial carbon pricing, and negotiations with British Columbia and First Nations.
Together, these developments underscore a renewed push by Canada to diversify its energy exports and India’s growing role as a key partner in that strategy.
