India and Canada are targeting an increase in two-way trade in goods and services to $50 billion by 2030, while negotiations for a Comprehensive Economic Partnership Agreement (CEPA), launched in March 2026, have already entered their third round.
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The next phase of bilateral engagement is expected to focus on areas including energy, critical minerals, technology, innovation and resilient supply chains.
According to Rubix Data Sciences, India’s goods exports to Canada increased to $4.7 billion in FY2026 from $3.8 billion in FY2022, translating into a compound annual growth rate of 6%. Exports rose 10.6% year-on-year in FY2026, signalling renewed momentum in the Canadian market.
India’s imports from Canada, meanwhile, declined sharply to $3.3 billion in FY2026 from a peak of $4.6 billion in FY2024. The 26.1% year-on-year fall in imports helped India turn a $0.2 billion trade deficit in FY2025 into a $1.4 billion surplus in FY2026 — the strongest surplus recorded during the FY2022-FY2026 period.
India’s export basket to Canada is also gradually shifting towards higher-value and manufactured products. Pharmaceuticals accounted for 11% of exports in FY2026, up from 8% in FY2022, while the shares of auto components and diamonds also increased. The combined contribution of the top five export products rose to 23% from 19% over the same period.The report pointed to another potential opening for Indian exporters as Canada moves to impose retaliatory tariffs on a range of US products.
Canada plans to levy counter-tariffs of 15%, 25% and 50% on specified US products from September 8, covering sectors including steel, appliances, agricultural equipment, pulp and paper, and electronics.
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India already has an established presence across these segments, with indicative exports of around $1 billion worth of products from the focus sectors to Canada in FY2026.
Machinery and mechanical appliances accounted for $379.44 million of these exports, followed by articles of iron and steel at $292.51 million and electrical machinery and equipment at $226.01 million.
This existing supplier base could give Indian companies an opportunity to capture a larger share of Canadian demand as businesses look to diversify away from US suppliers affected by tariffs. However, the extent of the opportunity will depend on product-level tariffs, the competitiveness of Indian suppliers and prevailing market-access conditions.