October 23, 2026: India and Canada are exploring a broader energy partnership that could reshape bilateral trade in crude oil, natural gas, and refined petroleum products as both countries work to conclude a comprehensive free trade agreement. The proposed arrangement aims to establish a two-way energy supply chain, with India importing Canadian oil and gas while exporting refined fuels to Canada, allowing both countries to capitalize on their complementary energy capabilities.

People familiar with the discussions say the two governments are working to advance negotiations for a Comprehensive Economic Partnership Agreement (CEPA) ahead of Prime Minister Narendra Modi’s scheduled visit to Canada on December 11-12. A Canadian negotiating team is expected to travel to New Delhi early next month for the sixth round of trade talks, signaling efforts to convert improving diplomatic relations into concrete commercial opportunities.

The proposed energy partnership reflects the different strengths of the two economies. Canada ranks among the world's leading producers of crude oil and natural gas, while India represents one of the largest energy-consuming markets. India is the world's third-largest crude oil consumer, after the United States and China, as well as the second-largest consumer of liquefied petroleum gas (LPG) and the fourth-largest consumer of liquefied natural gas (LNG). These demand patterns create opportunities for long-term supply contracts and greater diversification of energy sources.

“India and Canada are in talks to establish reliable supply chains in key sectors such as crude oil, LPG, LNG, potash, nuclear fuel (uranium) and refined petroleum products. India is a major refining hub and it can ensure supply of fuels and petroleum products to Canada”, one of the people cited above said.

Canada's oil sands, which contain some of the world's largest oil reserves, offer India another potential source of crude. However, processing this resource presents technical challenges because oil sands produce heavy, bituminous crude that requires specialized refining capabilities. Many Canadian refineries cannot efficiently process these grades because of their existing configurations, whereas some Indian refineries can handle a wider range of crude types. This capability could allow Indian refiners to import Canadian crude, process it domestically, and supply suitable refined products to Canadian buyers

(Source: Silicon India)