India and Canada are likely to move ahead with an interim arrangement to expand energy cooperation, even as negotiations for the Comprehensive Economic Partnership Agreement (CEPA) remain underway, according to sources familiar with the development.

The proposed understanding is expected to focus on increasing supplies of crude oil, liquefied natural gas (LNG), and liquefied petroleum gas (LPG) from Canada to India. Officials on both sides have indicated a willingness to fast-track energy trade as a strategic priority, bypassing delays in broader trade negotiations.

Sources suggest that the interim mechanism could involve government-backed facilitation and long-term supply commitments, aimed at ensuring stability in energy flows. For India, the move aligns with its strategy to diversify import sources amid volatile global markets and geopolitical risks.

Canada, with its vast hydrocarbon reserves, is seen as a reliable partner capable of supporting India’s growing energy demand. The development also signals a pragmatic shift in bilateral ties, focusing on sector-specific gains while larger trade frameworks continue to be negotiated.