India, Canada explore energy partnership as both sides push to seal trade deal

India and Canada are exploring a two-way energy partnership while negotiating a Comprehensive Economic Partnership Agreement. The central idea is to connect Canada’s large energy production with India’s major demand and refining capacity. This matters because reliable supply chains could strengthen trade and deepen broader bilateral ties.

Under the proposed arrangement, Canada would send crude oil, natural gas, LPG and LNG to India. India would use its refineries to process suitable crude and export refined fuels and petroleum products to Canada. The discussions also include potash and nuclear fuel, or uranium, as possible supply-chain areas.

The plan remains under negotiation. Canadian negotiators are expected in New Delhi for the sixth CEPA round, and both countries aim to conclude the agreement before Prime Minister Narendra Modi’s expected December visit to Canada. The wider goal is to raise two-way trade to Canadian $70 billion by 2030.

A Comprehensive Economic Partnership Agreement, or CEPA, is a wide-ranging trade pact. It typically sets rules for trade in goods and services, market access, investment and other economic cooperation. It matters because it can make cross-border business more predictable and expand opportunities beyond physical products.

A simple exchange of goods might involve Canada selling oil or mineral fuels to India and India selling machinery or pharmaceuticals to Canada. A CEPA addresses the conditions around that trade. It may cover tariffs, customs procedures, services, investment rules and cooperation between the two economies. These provisions can support more stable, diverse trade.

India and Canada launched CEPA negotiations in New Delhi on March 2. Five rounds had taken place by October, with a sixth planned in New Delhi. The countries are working to resolve remaining issues and finish the agreement before December, while targeting Canadian $70 billion in two-way trade by 2030.

The current economic relationship is substantial but still below the countries’ long-term ambition. Bilateral goods and services trade reached Canadian $30.4 billion in 2025. The proposed CEPA is intended to expand commercial ties and help raise two-way trade to Canadian $70 billion by 2030.

Goods form only part of the relationship. Merchandise trade contributed Canadian $13.6 billion in 2025. Canada exported Canadian $3.9 billion in goods to India, including vegetables, mineral fuels and oils, and wood pulp. India exported Canadian $9.7 billion in merchandise, including precious stones, metals, machinery and pharmaceuticals.

The target would require strong growth across energy, goods and services. Negotiators say most key free-trade issues have been resolved, and talks have moved quickly. The sixth round is planned for New Delhi, with both sides trying to finalise CEPA before Prime Minister Modi’s expected December visit to Canada.

A two-way energy supply chain would link Canada’s production with India’s refining capacity. Canada would supply crude oil, LPG and LNG to India. India would process suitable crude and ship refined petroleum products back to Canada. This arrangement could make energy trade more balanced and reliable.

The mechanism depends on different capabilities. Canada produces large volumes of oil and gas, including heavy and bituminous crude from Alberta’s oil sands. Some Indian refineries can process any type of crude. Canada, meanwhile, needs large quantities of refined products because geography creates logistical hurdles and many Canadian refineries are not configured for oil-sands crude.

The supply chain is still a potential area of cooperation, not a completed system. India and Canada are discussing it within wider CEPA negotiations. If agreed, it could support energy security, expand two-way trade and make India an important source of fuels and petroleum products for Canada.

India and Canada have different energy strengths that fit together. Canada is among the world’s top energy producers, while India is the world’s third-biggest crude-oil consumer. India also ranks second in LPG consumption and fourth in LNG consumption. These differences create room for dependable energy trade.

Canada could supply India with crude oil, natural gas, LPG and LNG. Indian demand would provide a large market for those resources. India’s refining sector adds another advantage. Some Indian refineries can process different crude types and produce fuels and petroleum products that Canada needs.

Canada’s need for refined products reflects both geography and refinery limitations. Many Canadian refineries cannot process the heavy, bituminous crude extracted from Alberta’s oil sands. The proposed partnership would therefore connect Canadian production with Indian consumption and processing. It could strengthen energy supply chains while supporting the countries’ wider trade target.

Crude oil differs in composition and quality. Canadian oil sands produce heavy, bituminous crude, which needs refinery equipment and processes suited to its characteristics. The article says many Canadian refineries are not configured to process this type of oil. That limits how easily Canada can turn its domestic crude into finished fuels.

Some Indian refineries, by contrast, can process any type of crude, according to people cited in the article. Their flexibility would allow them to receive Canadian oil-sands crude and convert it into usable fuels and other petroleum products. India could then send some refined products back to Canada.

This difference helps explain the proposed two-way supply chain. Canada has abundant oil production, but faces processing and logistical constraints. India has strong refining capability and large energy demand. The arrangement remains a potential area of cooperation as the countries negotiate their broader CEPA and seek to deepen bilateral ties.

Crude oil is an unprocessed liquid fossil fuel extracted from underground deposits. Natural gas is a gaseous fossil fuel, while refined petroleum products are fuels and other materials made from crude oil. LPG and LNG are forms of gas used for cooking, heating, transport or industry, although LNG is natural gas cooled into liquid form.

Refining begins by heating crude oil and separating it into components with different boiling points. Further treatment changes those components into products such as petrol, diesel, jet fuel, LPG and other petroleum products. Refineries can also be designed to handle particular crude qualities, including heavy or bituminous oil.

This process explains the proposed India-Canada partnership. Canada produces oil and gas, including oil-sands crude. India has major energy demand and is a large refining hub. Some Indian refineries can process different crude types, allowing them to turn Canadian crude into fuels that could be supplied to Canada.