India-Canada Relations – Bilateral Trade and Rising Political Tension

22 September 2023

Major Highlights

                  ·       India-Canada bilateral trade has increased in recent years.

                  ·       Total trade between India and Canada was USD 3,869 million in Jan-Jun 2023.

                  ·       Following the G20 Summit, Canada postponed a trade mission to India.

With increasing tensions between India and Canada, the negotiations between both countries on the free trade agreement (FTA), which resumed after a decade, could come to a halt due to political concerns. India’s imports from Canada totaled USD 3,906 million and India’s exports to Canada totaled USD 4,251 million in 2022. Both import and export values increased as compared to the previous year. Here is a detailed overview of India’s trade with Canada.  

According to a report, Canada is the 18^th largest foreign investor in India with an overall investment of about $3,306 million from April 2000 to March 2023. Over 600 Canadian companies have a presence in India and over 1,000 Canadian companies are actively pursuing business in the Indian market.

India-Canada Trade – 2023 Data We Have So Far

India is Canada’s major trading partner with total trade (imports + exports) totaled USD 3,869 million in Jan-Jun 2023. India’s imports from Canada were at USD 2,030 million and India’s exports to Canada were at USD 1,839 million in the given period. The trade between India and Canada declined in June as compared to the previous month. See data visualization for having in-depth analysis.

India-Canada Trade by Year

India’s trade with Canada increased in 2022 and reached USD 8,157 imports + exports) million as compared to the previous year. The given chart shows India-Canada trade in the last five years.

What are the Key Items of Trade?

India’s major imports from Canada in 2022 were mineral fuels & oils, fertilisers, pulp of wood, edible vegetables & certain roots, iron & steel, paper & paperboard, aircraft, spacecraft & parts, machinery, mechanical appliances, etc., ores, slag & ash, and aluminium & articles.

India’s major exports to Canada in 2022 were pharmaceutical products, articles of iron & steel, machinery, mechanical appliances, etc., pearls & precious stones, organic chemicals, iron & steel, electronics, knitted or crocheted apparel & clothing, and plastics & articles.

India’s growing demand for imported lentils has benefited Canadian farmers, while Indian pharmaceutical and software companies have expanded their presence in the Canadian market.

According to industry experts, the Comprehensive Economic Partnership Agreement (CEPA) between India and Canada could boost two-way trade by as much as $6.5 billion yielding a GDP gain of $3.8 billion to $5.9 billion for Canada by 2035.