Amid US-Canada tariff war, Ottawa looks to India, hails world’s fifth-largest economy as key trade partner
The comments come as Canada announced fresh retaliatory tariffs worth around C$27.6 billion on US goods after trade negotiations with Washington broke down.
Canada’s Finance Minister François-Philippe Champagne.
Canada is increasingly looking to India as a key market in its push to diversify trade away from the United States, with Ottawa describing the country as an important economic partner as the Trump administration’s tariff policies intensify pressure on Canadian businesses.
Addressing a press conference on Tuesday, Canada’s Finance Minister François-Philippe Champagne highlighted India’s position as the world’s fifth-largest economy, underscoring the scale of the opportunity for Canadian exporters as Ottawa seeks to build stronger commercial ties beyond its traditional dependence on the US.
“I am going to be hosting the Finance Minister of India, fifth largest economy in the world, 1.4 billion people. I want them (India) to trade with Canada and make sure we do big things in the country,” said Champagne.
VIDEO | Canada’s Finance Minister highlights India’s status as the world’s fifth-largest economy as the country eyes trade diversification amid the US trade war. (Source: @FP_Champagne) (Full video available on PTI Videos – https://t.co/d8jp61yd2p) pic.twitter.com/DnzFDlwy1R
— Press Trust of India (@PTI_News) August 26, 2026
The comments come as Canada announced fresh retaliatory tariffs worth around C$27.6 billion on US goods after trade negotiations with Washington broke down and Ottawa moves to shield its economy from President Donald Trump’s latest tariffs.
The measures, covering about 700 products and ranging from 15% to 50%, will take effect on September 8 and broadly match the value of the latest US tariffs on Canadian goods. Ottawa has also unveiled a C$7.5 billion support package for businesses and workers affected by the trade conflict.
Industry Minister Mélanie Joly said Canada could no longer afford to wait for Washington to determine the country’s economic future.
“We cannot wait for Washington to decide our future,” said Joly, urging Canadians to support domestic businesses while announcing plans to deepen trade ties with other countries.
Joly said Canada would work to expand relationships with new trading partners rather than remain overly dependent on the US market. The government has framed the strategy as an effort to strengthen Canadian economic sovereignty and diversify exports.
The growing focus on India is part of Prime Minister Mark Carney’s effort to reduce Canada’s vulnerability to the US market. Canada’s government has set a goal of doubling exports to markets outside the US over the next decade, while seeking to more than double two-way trade with India to C$70 billion annually by 2030.
India and Canada have already moved to revive their economic relationship. The two countries launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA) in November 2025, with the agreement intended to provide greater market access and strengthen investment and supply-chain links.
Carney has previously described India’s economic size as a major opportunity for Canadian businesses and workers, saying the country’s status as the world’s fifth-largest economy could open new markets for Canadian companies.
The renewed push comes after years of strained diplomatic ties between the two countries. Trade negotiations had been paused amid a diplomatic dispute, but relations have improved since Carney and Prime Minister Narendra Modi held a bilateral meeting at the G7 summit in June 2025.
Canada’s renewed outreach to India comes at a critical moment for its economy. The US remains by far Canada’s largest trading partner, but the latest tariff confrontation has prompted Ottawa to accelerate efforts to develop alternative markets.
According to Reuters, the US has imposed 50% tariffs on roughly US$20 billion of Canadian goods, representing about 5.5% of Canada’s exports to the US, intensifying concerns over the future of the deeply integrated North American trading relationship.
Against this backdrop, India is emerging as one of the markets Ottawa sees as central to its strategy of moving from economic dependence to greater trade resilience. Canadian officials have said strengthening ties with India is key to expanding exports to the Indo-Pacific and creating new opportunities for Canadian businesses.