The foreign policy approach of the United States, aimed at asserting pressure on other countries, appears to be producing results very different from what was intended. Instead of reinforcing American influence, it has pushed several nations to actively search for alternative partners and reduce their reliance on Washington. Even traditional allies, including the European Union, are now reassessing their economic and diplomatic strategies. This shift has also helped ease tensions between major economies such as India and China, which had previously experienced strained relations.

Canada, long considered one of the closest partners of the United States, has also been drawn into this realignment. Diplomatic ties between Ottawa and Washington have weakened sharply in recent years. This decline has been made worse by former US President Donald Trump’s repeated description of Canada as the “51st US state”, a remark that directly challenges Canadian sovereignty and has caused deep unease across the political spectrum.

At the same time, relations between Canada and India, which had suffered during the tenure of Prime Minister Justin Trudeau, are showing clear signs of improvement. Ottawa is now keen to rebuild trust and develop a strong trade partnership with New Delhi under Prime Minister Narendra Modi. Energy resources and critical minerals are expected to become the backbone of this renewed engagement, as both countries work to move past a long diplomatic freeze and rebuild a practical, future-oriented relationship.

Energy, Critical Minerals and a Pushback Against Global Hegemons

Canada’s Energy and Natural Resources Minister Timothy Hodgson made it clear that India’s growing demand for energy represents a major opening for his country. Canada holds large reserves of oil, gas and essential minerals, and Hodgson underlined the scale of this opportunity by stating that India’s rising needs align well with Canada’s capacity to supply. He described India’s demand growth as a “great opportunity” for Canada.

Providing specific figures, Hodgson said, “We produce 6% of the world’s oil today, and India gets less than 1% of its oil from Canada.” He added that both nations would be more resilient, stronger and more secure if this share increased over time.

These remarks were delivered during an interview with Bloomberg Television on 28 January, a Wednesday, on the sidelines of India Energy Week held in Goa. Hodgson attended the event at the invitation of India’s Minister of Petroleum and Natural Gas, Hardeep Singh Puri. Notably, this marked the first time a cabinet minister from a Western country participated at such a high level in the programme. During the event, Hodgson also took an indirect but pointed swipe at the Trump administration’s trade policies.

He described Canada’s decision to export nearly all its energy to one country as a mistake, stating that sending 98 percent of its energy exports to the United States was a “strategic blunder”. He explained that this overdependence created vulnerabilities and opened the door to economic pressure. Highlighting the need for change, he said, “We used to be in a world where we sought to integrate with our closest trading partners and we now find that that integration is used for coercion or tariffs are used to gain leverage. Canada now needs to rewire its economy and build relationships beyond those with its neighbours.”

Hodgson went further by referring to the United States as one of the global “hegemons” and warned that the world economy was undergoing a sudden and disruptive change. He said, “What is happening in the world today is not a gradual economic transition. It is a rupture. The hegemons of the world have decided that the rules-based order is no longer how the world will work. They have decided that’s not the way the world’s going to work anymore.”

In this context, he praised the Free Trade Agreement between India and the European Union, calling it the “perfect” response to countries that use tariffs and economic pressure as tools of intimidation. According to him, the decision to move ahead with the deal sent a powerful message in favour of free trade and dependable partnerships.

He emphasised this point by saying, “What you just did with the EU signing, the mother of all deals, was a perfect example of how to say no (to hegemons). We’re not going to live in a world where the strongest put tariffs on everyone else. We’re going to live in a world where we believe in free trade, where we believe in trusted relationships.”

Hodgson also highlighted the current scale of bilateral trade, noting that trade between India and Canada stands at just $30 billion. He added that Prime Minister Mark Carney has set an ambitious target to double this figure by the end of the decade, underlining the seriousness of Ottawa’s intent to deepen economic ties with India.

India and Canada Issue Joint Statement on Energy Collaboration

Following their discussions, Ministers Hardeep Singh Puri and Timothy Hodgson held a meeting that resulted in concrete follow-up steps. Puri announced that India would send a delegation to Canada to explore joint initiatives related to critical minerals. Alongside this, both sides released a joint statement outlining their shared vision for cooperation in the energy sector.

The statement detailed Canada’s ambition to emerge as an “energy superpower” by expanding a wide range of exports. India was described as a “natural and symbiotic” partner, given its size and long-term demand potential.

The document stressed, “The importance of energy security and diverse energy supply chains. India, as a major consumer and Canada as a safe, secure and reliable supplier, can act in partnership to deepen trade and ensure stable and secure energy supplies. The two sides will collaborate to promote and strengthen cooperation across trade in the energy sector comprising services.”

Canadian officials also revealed that as global trade patterns shift, particularly due to protectionist policies adopted by the United States, Canada is firmly turning towards India to strengthen ties in energy and critical minerals. They confirmed that discussions are underway with other international partners as well, aimed at creating new frameworks for trading vital minerals. These include off-take agreements and strategic stockpiling arrangements.

This evolving partnership could also involve the supply of Canada’s “highest quality” uranium to support India’s goal of building 100 gigawatts of nuclear power capacity by 2047. Canada’s liquefied natural gas sector is equally well positioned to contribute. Its LNG plant, with an initial capacity of 12 million tonnes per year, began production in June and is expected to expand to 50 million tonnes annually, placing Canada in a strong position to meet India’s energy needs.

Canada Invites Piyush Goyal to Revive Trade Talks

Canada has also signalled its intention to fast-track formal negotiations for a free trade agreement with India, marking a clear restart of bilateral trade engagement. These talks had been suspended in 2023 during a period of strained relations under the Trudeau government. Maninder Sidhu, Canada’s Minister of Export Promotion, International Trade and Economic Development, has now invited India’s Commerce and Industry Minister Piyush Goyal to visit Canada in the third week of next month.

An official confirmed this renewed momentum, stating, “Canada has expressed its desire to speed up the FTA negotiations,” as reported by The Times of India. Both sides have agreed to revive the proposed agreement, noting that the past two years have brought dramatic changes in the global trade environment, making a fresh approach necessary.

Commerce Secretary Rajesh Agrawal had earlier said that India and Canada are finalising the terms of reference to formally begin negotiations. These terms will define the scope and procedures of the agreement. Brij Mohan Mishra and Bruce Christie have been appointed as the chief negotiators from the Indian and Canadian sides respectively.

PM Mark Carney Expected in India to Finalise Key Agreements

India’s High Commissioner to Canada, Dinesh Patnaik, told Reuters that Prime Minister Mark Carney is likely to visit India in the first week of March. The visit is expected to result in agreements covering uranium, energy, critical minerals and artificial intelligence. Patnaik noted that Carney is actively seeking to expand Canada’s relationships beyond its primary trading partner, the United States, as bilateral ties continue to weaken.

According to Patnaik, formal negotiations for a Comprehensive Economic Partnership Agreement with India may also begin in March. Both countries had decided to resume their stalled trade discussions in November. During his India visit, Carney is expected to sign multiple agreements spanning nuclear energy, oil and gas, the environment, artificial intelligence, quantum computing, education and culture.

Highlighting the scale of cooperation, Patnaik said, “A 10-year (Canadian) $2.8 billion uranium supply deal is likely to be included,” and added that agreements on critical minerals, crude oil and LNG could follow soon. He said the main outcome of the visit could be a decade-long uranium supply deal, which may also include arrangements related to liquefied petroleum gas.

Patnaik further mentioned that Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal are likely to visit Canada in the near future. He added that National Security Advisor Ajit Doval is scheduled to travel to Ottawa next month as part of routine engagements focused on intelligence sharing and security cooperation.

Hodgson also confirmed ongoing discussions, saying, “There ‍are plans for the prime minister to visit at some point this year and it will depend on the progress we make.” He added, “We know that India is a major nuclear country and it has major plans ‌to grow ‌its civilian use of nuclear energy. So that would be one of the topics I expect that we will discuss with my counterpart. We need to focus on economies that are large and growing. India squarely falls into that category. It is a growing user of critical minerals that Canada can supply.”

Carney Responds to Trump’s Remarks

The sharp decline in Canada–US relations was evident during Prime Minister Carney’s speech at the World Economic Forum in Davos. He cautioned middle powers not to assume that “compliance” would protect them from aggression by major powers. He argued that the rules-based international system led by Washington for decades was undergoing a “rupture.”

Addressing Canada’s House of Commons, Carney reinforced this view by saying, “The world has changed. Washington has changed. There’s almost nothing normal in the United States now,” and stressed the urgency of building stronger economic relationships with other countries.

In a national address, he made Canada’s position clear by declaring, “Canada doesn’t live because of the United States. Canada thrives because we are Canadian,” a direct response to Trump’s earlier claim at the World Economic Forum that “Canada lives because of the United States.”

Conclusion

Diplomatic momentum between India and Canada has also been boosted by a recent “fruitful conversation” between External Affairs Minister S Jaishankar and Canadian Foreign Minister Anita Anand during Republic Day events. Their discussion focused on maintaining regular high-level exchanges, building economic partnerships and expanding cooperation in artificial intelligence.

As trade tensions with the Trump administration continue to rise, Canada faces the risk of punitive measures. Anand has therefore stressed the importance of diversification, asserting that Washington’s threats “won’t be derailed.” She outlined Canada’s long-term objective of expanding exports beyond the United States over the next ten years and said, “That is why we went to China, that’s why we will be going to India and that is why we won’t put all our eggs in one basket.”

Trump has warned of imposing 100 percent tariffs on Canadian goods if Canada becomes a transit route for Chinese exports into the US. Carney responded by stating that Canada remains committed to its pledge under the United States–Mexico–Canada Agreement not to pursue free trade deals with non-market economies.

Relations with India also suffered after Trump rejected New Delhi’s position when it dismissed his claims of mediating a ceasefire between India and Pakistan. Subsequently, tariffs of up to 50 percent were imposed, including 25 percent linked to India’s purchase of Russian oil and gas, with accusations that the Modi government was fuelling the Ukraine war.

Now, two countries affected by Trump’s unpredictable policies and provocative statements are attempting to repair fractured ties. These relations had earlier hit a low point due to the Trudeau government’s allegations against India and its open support for Khalistani elements. Canada appears to have regained clarity, at least for now, and has recognised the importance of rebuilding and strengthening its partnership with India following a turbulent period in its relationship with the United States.