India, Canada Revive Ties with Critical Minerals, Aerospace Partnerships

India-Canada Revive Relations with Critical Minerals and Aerospace Partnerships

India’s exports to Canada surged past CAD 8 billion in 2024, even as broader bilateral ties faced significant strain earlier in the year. The 7th Ministerial Dialogue on Trade and Investment (MDTI), concluded recently in November 2025, unveiled substantive plans to deepen collaboration in critical minerals, aerospace, dual-use technologies, and clean energy. Both countries have framed this renewed engagement as an imperative to counter global supply chain vulnerabilities and geopolitical dependencies.

The Policy Instrument

The MDTI marked a fresh start in the India-Canada relationship after a rocky period. Beyond reaffirming mutual respect and cooperation, the dialogue emphasized two flagship collaborations:

• Critical Minerals Strategy: Canada is a global leader in mining, comprising over 60% of the world’s production of key rare earth elements and lithium required for EV batteries and clean energy. India, in turn, is keen to secure reliable sources for these materials to meet its ambitious National Electric Mobility Mission Plan targets. The MDTI proposed joint exploration, technology exchange, and priority investment agreements.
• Aerospace Partnership: India’s longstanding partnership with global aerospace firms dovetails with Canada’s expertise in aerospace engineering and dual-use technologies. The collaboration aims to boost defense technologies, civil aviation manufacturing, and precision engineering for ISRO's satellite programs.

The dialogue also aimed to reinforce transparent investment climates, resilient food supply chains, and renewable energy partnerships. Notably, both sides committed to holding trade stakeholder consultations in early 2026, ensuring agile implementation mechanisms.

The Case For These Partnerships

Supporters argue this strategic turn is overdue, especially as India accelerates its clean energy transition. Canada’s reserves of critical minerals like cobalt, nickel, and lithium could decisively reduce India’s dependence on volatile suppliers like China and Australia. The partnership has precedence: Canada exported CAD 247 million in mineral commodities to India in 2024, a number poised to rise exponentially.

The aerospace MOUs could also unlock opportunities in dual-use technologies — areas where Indian firms have faced bottlenecks due to low domestic R&D spending. With ISRO managing over 100 launches for international clients, enhanced collaboration with Canada's precision engineering capabilities could raise payload efficiencies and establish ISRO satellites as global benchmarks.

Further, there’s growing alignment on geopolitical hedging. Canada’s reputation as a stable supplier of resources complements India’s ambitions to avoid disruptions evident during the Russia-Ukraine conflict. Both countries could anchor multilateral frameworks for minerals trade in the Indo-Pacific.

The Case Against These Partnerships

While promising, skepticism stems from frail institutional mechanisms. For instance, India’s own Critical Minerals Strategy, though launched in 2023, remains anchored to slow-moving alliances. Canada, meanwhile, has faced backlash from environmental groups citing extraction practices that violate Indigenous rights. The risk of India being drawn into politically contentious supply chains is material.

The aerospace partnership also raises implementational concerns. Despite rosy narratives, Canadian firms have historically preferred joint collaborations with the U.S. under agreements like NORAD (North American Aerospace Defense Command). India might suffer second-tier status. Additionally, past space MoUs — including ISRO's 2015 compact with the Canadian Space Agency — have yielded only incremental advances. Institutional inertia persists.

Most critically, the agricultural supply chain emphasis illustrates a deeper divide. India's restrictive import policies on agricultural goods have repeatedly undercut trade volume potential. Mutual market access dialogues have stagnated, exposing the limits of economic diversification rhetoric underpinning the MDTI narrative.

What Other Democracies Did: Lessons from Australia

Australia offers an instructive parallel. Faced with similar clean energy challenges, it crafted the Critical Minerals Facilitation Office (CMFO) in 2019 to streamline partnerships, identify priority minerals, and build an export-ready ecosystem. Its approach involved joint ventures, transparent accounting frameworks, and carbon-neutral mining incentives. By 2024, Australia exported AUD 7 billion worth of lithium globally, balancing ecological concerns with economic returns. Canada could emulate this model, but India's fragmented mining ecosystem may struggle to adapt so quickly.

Where Things Stand

The India-Canada MDTI undoubtedly marks a renewal of intent. However, risks of uneven execution loom large. Despite robust mineral export opportunities, Canada’s mining sector remains encumbered by regulatory hurdles, while India’s limited domestic exploration capacities persist. Collaborative aerospace breakthroughs, if stalled, could mirror the inertia seen in previous science and technology agreements.

The path forward rests heavily on institutional synchronization rather than bilateral goodwill alone. Scaling supply chains and fostering genuine tech transfer mechanisms are non-negotiable. But amidst geopolitical decoupling trends, even incremental progress could provide valuable shocks to both economies.

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