India and Canada have launched their inaugural Economic and Financial Dialogue, with Finance Minister Nirmala Sitharaman and Canadian Finance Minister Francois-Philippe Champagne discussing ways to strengthen economic cooperation amid global uncertainty. The talks focused on areas including trade, investment, energy security, food security and critical minerals. Both sides indicated that greater economic engagement could help improve stability and reduce vulnerabilities arising from disruptions in global supply chains.

Champagne said the dialogue was part of Canada’s broader effort to diversify its economic partnerships beyond its traditional dependence on the United States. Canada is facing tariff-related uncertainty amid trade tensions with its southern neighbour, prompting the government to seek stronger commercial relationships with other major economies. He described India and Canada as having complementary strengths and highlighted opportunities for cooperation in energy and food security.

Sitharaman said the current global environment made the launch of the dialogue particularly timely. She argued that countries such as India and Canada could work together to bring greater predictability to global economic growth. She also pointed to cooperation in food security, energy and critical minerals as areas that could strengthen both countries’ ability to withstand supply chain disruptions and reduce concentration risks in the sourcing of commodities and intermediate products.

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Investment was another major area of discussion during the engagement. Sitharaman referred to her meetings with Canadian pension funds, sovereign wealth funds, private entrepreneurs and private equity representatives. Canadian pension funds have invested nearly CA$110 billion in India, underlining the scale of existing financial links between the two economies. The two countries are also expected to pursue a foreign investment protection agreement alongside ongoing negotiations for a comprehensive economic partnership agreement.

The economic discussions come against the backdrop of a broader effort to improve India-Canada relations after a period of significant diplomatic tensions. Relations deteriorated following former Canadian Prime Minister Justin Trudeau's 2023 statement concerning alleged links between Indian agents and the killing of Hardeep Singh Nijjar in British Columbia. India rejected the allegations at the time, describing them as unfounded and politically motivated. The relationship has since entered a period of renewed engagement under Prime Minister Mark Carney.

The latest dialogue is expected to provide a structured platform for expanding economic ties as both countries seek to diversify their partnerships and strengthen resilience. The two governments are working towards completing negotiations on the investment protection agreement alongside the broader economic partnership talks by the end of the year. Prime Minister Narendra Modi is also expected to visit Canada later this year, potentially providing another opportunity to advance the renewed bilateral relationship.

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