Unlocking strategic opportunities for Canadian exporters in India

When global investors and exporters look at the Indo-Pacific region, India’s sheer scale and dynamism stand out. With a population of almost 1.5 billion and an economy valued at around US$4 trillion, India has quickly ascended into the ranks of the world’s five largest economies—surpassing the United Kingdom in 2022 and doubling its share of global gross domestic product (GDP) since 2000.

India’s economy isn’t just massive, it’s increasingly sophisticated and open to international engagement, guided by a nuanced approach to trade. Much like roaming the country’s vibrant spice bazaars, Canadian exporters will find this market diverse, dynamic and packed with possibilities.

As the world’s fastest-growing major economy over the last few years, India has averaged 5.8% annual GDP growth since 2016, outstripping BRICS peers Brazil, Russia, China and South Africa. Its emergence has been defined by consumption-driven growth, a robust services sector and a commitment  to reform and liberalization.

Healthy macroeconomic fundamentals, favourable demographics, ongoing reforms and advancing technology are set to drive average growth of 6.2% over the next five years—well above other major economies and among the highest projected rates for emerging markets. GDP per capita has more than doubled since 2008, and India is on track to reach upper middle-income status by 2032 and emerge as a developed, high-income economy by 2047.

India export opportunities: Why Canadian businesses should act now

Canada maintains a longstanding relationship with India. With roughly 5% of Canadians claiming Indian origin, our countries share strong people-to-people ties. These ties have helped foster stable economic linkages, with India ranked as Canada’s 10^th-largest goods and second-largest services export destination in 2024. Canadian direct investment in India has more than doubled from C$2.5 billion in 2018 to C$5.6 billion in 2024, with a focus on technology, mining, chemicals and industrial goods. India is also the second-largest destination for Canadian pension fund investments in the Asia-Pacific.

However, Canada’s market share for goods imports has remained largely stagnant since 2017, at around 1%. That means significant untapped potential for Canadian exporters in this fast-growing market.

India’s rising middle class: Consumer market trends and export opportunities

India offers one of the world’s most attractive consumer markets, driven by scale and demographic trends. Now the most populous country in the world, with a median age of 29 and 42% of Indians under 25, India’s fast-growing middle class is projected to reach 50% of the population by 2030 and 67% by 2047.

Rapid urbanization and rising incomes are fuelling demand for premium products, as well as health care and education services. India’s consumer class spending is expected to surpass China’s by 2038, Europe’s by 2042 and the United States’ by 2045, creating significant long-term opportunities for Canadian exporters.

Infrastructure and energy investment: Opportunities for Canadian expertise in India

Urbanization and population growth will pressure India’s infrastructure and energy resources. Since 2015, government fixed investment spending has risen nearly sixfold, to US$134 billion, with a focus on roads, railways, airports, urban development and energy. The World Bank estimates India will need more than US$800 billion of investment by 2036 for urban infrastructure, fuelling demand for smart city solutions, reliable power and efficient transport systems.

India’s drive to rank among the Top 25 markets for trade logistics by 2030 will require expertise in developing and managing roads, rail networks and ports, creating additional opportunities for Canadian firms with relevant expertise.

India’s renewable energy ambitions are equally bold: Sourcing 50% of total energy needs from renewables by 2030 and reaching net zero by 2070. This will unlock opportunities across the renewables value chain—from critical minerals and copper, to electricity generation and transmission, to battery storage and energy efficiency solutions. India attracted more than US$60 billion in renewable energy investment in the five years to 2023 and is expected to drive many time more than that over the next five years.

Making cities more liveable also means addressing pollution, creating opportunities for Canadian capabilities in water treatment, emissions control and carbon capture—a market projected to reach US$100 to US$150 billion by 2050. Rapid adoption of electric vehicle (EV) technologies will likewise fuel growth in charging infrastructure, offering Canadian businesses substantial opportunities to contribute expertise and technology to India’s sustainable transformation.

India’s digital economy: Tech, innovation and Canadian partnership potential

India’s digital economy—already contributing 12% of GDP or around US$400 billion, and projected to hit 20% by 2030—offers additional opportunity. With 1.2 billion mobile subscribers, 945 million broadband users and the world’s second-largest internet network, demand for advanced IT solutions is surging.

Government initiatives such as Digital India, 5G rollout and AI-driven infrastructure are fuelling growth in cybersecurity, cloud services, fintech and Internet of Things (IoT). E-commerce growth, digital payments and a data centre boom further amplify prospects in this market. India’s vibrant startup ecosystem, with its strong innovation ranking and more than 100 unicorn companies, makes it a prime market for Canadian digital expertise and partnerships.

Agri-food and agri-tech modernization: Export prospects for Canadian businesses

Despite a complex regulatory backdrop—evolving tariffs, import rules and compliance requirements—India’s agri-food market offers promise for Canadian exporters. While Canada retains a strong foothold in pulses, like peas and lentils, significant opportunity also lies in agri-tech and food processing.

Government-led agriculture modernization initiatives are driving demand for precision farming, advanced irrigation, cold storage and digital farm-to-market platforms. Rising packaged food consumption further boosts prospects for Canadian expertise in processing equipment, automation and quality systems—making technology and supply chain solutions strategic entry points into India’s dynamic market.

Navigating India’s export challenges: Tariffs, compliance, and market competition

Challenges to entering the Indian market can be formidable for exporters, with a tariff environment that’s complex and unpredictable. Intense competition from domestic firms and global players adds pressure. Regulatory complexity, tax compliance, weak intellectual property rights enforcement, restrictive labour laws and infrastructure gaps can compound operational risks. Fragmented governance across states and diverse consumer preferences demand agile strategies and experienced advisory support to navigate this dynamic market successfully.

The bottom line: Why India matters for Canadian exporters

India’s scale, robust growth trajectory and reform momentum present compelling opportunities for Canadian exporters and investors. But success in this market requires more than ambition—it demands decisive action, agility and the ability to navigate complexity.

With Canadian expertise well aligned to India’s diverse sectoral opportunities, now is the time for businesses to engage proactively, position boldly, invest strategically and lean into one of the world’s most dynamic markets. As a priority market for both Export Development Canada (EDC) and the Canadian government, EDC has representation in Mumbai to help provide the insights, connections and support needed to navigate these opportunities and challenges.

This week, special thanks to Nadeem Rizwan, senior economist in our Economics department.

As always, at EDC Economics, we value your feedback. If you have ideas for topics that you’d like us to explore, please email us at economics@edc.ca and we’ll do our best to cover them.