India and Canada Forge Stronger Energy Ties Amidst Shifting Geopolitics

India is actively seeking to diversify its energy sources and is looking to Canada to play a significant role in meeting its growing demands. Indian High Commissioner to Canada, Dinesh K. Patnaik, has emphasized India’s strong interest in procuring various energy products from Canada, urging the Canadian government to expedite approvals for new projects. This push coincides with a warming of bilateral relations and a visit by Canadian Prime Minister Mark Carney to India, focused on solidifying economic partnerships and advancing free trade negotiations.

India’s Appetite for Canadian Energy

India’s demand for energy is substantial, and Patnaik stated that Canada’s potential supply, encompassing crude oil, liquefied petroleum gas (LPG), and liquefied natural gas (LNG), is highly desirable. “On energy, there is an appetite which even Canada cannot fulfill and we are willing to buy whatever Canada is offering on crude, on LPG, on LNG,” Patnaik said. This interest extends to Canadian uranium, crucial for India’s ambitious plans to expand its nuclear energy capacity.

A Reset in Bilateral Relations

The pursuit of closer energy ties is seen as a key element in improving Canada-India relations, which experienced a period of strain following allegations of Indian involvement in the 2023 killing of a Canadian Sikh separatist. However, relations have demonstrably improved since Prime Minister Carney invited Indian Prime Minister Narendra Modi to the G7 summit in Alberta in 2024. The two leaders agreed to pursue a comprehensive economic agreement, with further progress expected during Carney’s visit to India.

Uranium and Nuclear Energy Cooperation

India aims to increase its nuclear capacity tenfold, from approximately 8.7 gigawatts to 100 gigawatts by 2047. As the world’s second-largest uranium producer, Canada, particularly through its resources in Saskatchewan, is well-positioned to support this expansion. Patnaik indicated India’s willingness to explore ownership stakes in Canadian uranium mines and acquire Canadian nuclear technology. A potential 10-year deal worth $3 billion USD for uranium supply is currently under consideration, as reported by Forbes.

Diversifying Away from Russian Energy

India has been actively seeking to diversify its energy supply base, partially in response to pressure from the United States. Previously reliant on Russian oil, India agreed to increase its purchases of U.S. And Venezuelan oil in exchange for the lifting of tariffs imposed by the Trump administration. However, India also recognizes the importance of securing additional sources, including Canadian oil, to ensure energy security.

Breaking the U.S. Dependence

Currently, approximately 93% of Canada’s crude oil exports are destined for the United States, according to data from the Canadian Energy Regulator. This dependence limits Canada’s ability to capitalize on higher global prices. Patnaik has advocated for the construction of a new oil pipeline to the Pacific coast, which would facilitate increased exports to Asian markets, including India. He noted that Canada is currently an “energy superpower” supplying only one country.

LNG and Natural Gas Expansion

India is also focused on increasing the share of natural gas in its energy mix, aiming to raise it to 15% by 2030 from its current 6.2%. As a growing LNG buyer, India is seeking additional supply, and Canada, with seven LNG export projects in development, could become a key supplier. Natural Resources Minister Tim Hodgson emphasized the need for closer collaboration between Canada and India, particularly in the face of economic pressures from larger nations.

A Shift in Perspective

Patnaik highlighted a changing perception of Canada within India, attributing it to Prime Minister Carney’s leadership. “The perception from India was Canada was a difficult country, a more bureaucratic, over-regulated country,” he said, adding that “I reckon people trust him to be able to do much more.” Senator Peter Boehm, chair of the Senate’s foreign affairs and international trade committee, echoed this sentiment, noting the potential for significant economic opportunities now that the relationship has moved beyond “crisis management.”