India and Canada are advancing discussions to enhance energy cooperation as part of their broader economic relationship. As both nations work toward finalizing a Comprehensive Economic Partnership Agreement (CEPA), they are exploring the potential for a two-way energy supply chain. This collaboration could see India importing Canadian crude oil and natural gas while exporting refined petroleum products back to Canada.
Negotiations on the CEPA, which began in March 2026, are progressing with Canadian trade negotiators scheduled to visit New Delhi for the sixth round of talks early next month. The aim is to conclude the agreement before Indian Prime Minister Narendra Modi’s visit to Canada on December 11-12.
The proposed energy partnership leverages the complementary strengths of both countries. Canada, a significant energy producer, faces challenges with some refineries unable to process the heavy crude oil from Alberta’s oil sands, whereas India’s refining industry is equipped to handle a broader range of crude grades. This dynamic opens the door for India to supply refined fuels to Canada while securing crucial energy resources like crude oil and natural gas from Canadian producers.
Potential areas of cooperation include crude oil, liquefied petroleum gas (LPG), liquefied natural gas (LNG), potash, uranium, and refined petroleum products. This strategic alignment is poised to benefit both countries economically and strategically, aligning with India’s status as one of the world’s largest consumers of crude oil and natural gas.
The momentum for this bilateral relationship has been building through high-level visits and trade discussions involving officials and business representatives from both nations. The CEPA aims to significantly boost bilateral trade, targeting an expansion to C$70 billion by 2030, up from C$30.4 billion in 2025.
As India and Canada look to deepen their economic ties, the energy sector stands out as a key area for mutual benefit, promising to enhance their trade relationship and meet their respective energy needs effectively.