Oct 14: India-Canada Reset, E20 Fuel Debate Reignites

10-year old Ishit Bhatt has gone viral for a short but over-enthusiastic performance on KBC 17. Seems like he had come with an unwavering agenda to reduce time wastage in the show - can’t blame him to be honest. We didn’t even know 10 year olds could be on KBC, or that KBC is in its 17th season. Nau baj gaye kya?

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

The Indian stock market closed lower on Monday, ending a two-day winning streak. The decline was triggered by US President Donald Trump’s warning of "restrictive" tariffs on China, fuelling investor caution about a renewed US-China trade war.

India-Canada Reset: It seems there’s finally some warmth returning to the frostbitten relationship between India and Canada. In New Delhi this week, both nations agreed on a new roadmap for bilateral relations, signalling a slow but deliberate attempt to turn the page. Canadian Foreign Minister Anita Anand met Prime Minister Narendra Modi during her visit, her first to India since assuming office in May. Modi welcomed her, noting that the visit would “impart new momentum” to the partnership. He recalled his own meeting with Prime Minister Mark Carney on the sidelines of the G7 Summit in June and emphasised deeper cooperation in trade, energy, technology, and agriculture.

From Breakdown To Re-engagement: Just a year ago, such an exchange would have seemed unthinkable. Relations had plunged to a historic low after Canadian law enforcement alleged the involvement of Indian agents in violent acts on Canadian soil. The diplomatic expulsions that followed on both sides left ties frozen. Ottawa, under Justin Trudeau, doubled down on protecting pro-Khalistan groups, while New Delhi dismissed the claims as “preposterous.” The change of guard in Ottawa with Mark Carney replacing Trudeau, has brought a pragmatic reset.

The Joint Declaration, Calibrated Rebuilding: Anand’s visit was framed as a follow-up to guidance from the G7 meeting. The joint statement announced steps already taken: reinstating High Commissioners, reviving security cooperation, and reopening channels for law enforcement and diplomatic consultations.

Trade As The Bridge: Trade, predictably, is the cornerstone of this thaw. Bilateral trade stood at $23.6 billion in 2024, and both sides now plan ministerial-level talks to boost investment. The long-dormant Canada–India CEO Forum will reconvene in early 2026, with a focus on clean technology, agri-food, infrastructure, and digital innovation. The two countries also pledged to expand cooperation in renewable energy, decarbonisation, and critical minerals with Toronto hosting the first Critical Minerals Dialogue in 2026.

The Broader Strategic Context: Anita Anand’s tour - spanning India, Singapore, and China, is part of a broader recalibration. Under Carney, Canada is trying to strengthen ties with both India and China while managing an unpredictable U.S. administration under Donald Trump. Carney’s foreign policy is unapologetically economic: less moral posturing, more market access. 

E20, Green On Paper: India’s transition to ethanol-blended fuel was supposed to be a green triumph - cleaner air, happier farmers, and lower oil imports. On paper, the E20 rollout (20% ethanol-blended petrol) ticks every policy box. Ethanol is renewable, reduces carbon emissions, and, according to government data, has already saved India over ₹1.36 lakh crore in foreign exchange. But on the streets, things are less smooth. The shift has triggered mounting frustration, not over ethanol itself, but over the lack of choice and unexpected costs now hitting consumers.

Consumers Want Choice, Not Compulsion: The government made E20 petrol mandatory nationwide in April 2025. For many, especially owners of older vehicles, this wasn’t a green milestone - it was a red flag. Ethanol burns differently, and older engines calibrated for E0 or E10 fuels are seeing reduced mileage, rougher starts, and higher wear and tear. A new LocalCircles survey covering 36,000 respondents across 323 districts shows that 8 in 10 petrol vehicle owners (2022 models or older) have noticed a drop in mileage since switching to E20. Mechanics report a 40% surge in ethanol-related repair cases, from clogged injectors to rusted tanks. While the government maintains that E20 is safe and that lab tests show minimal impact, real-world data paints a different picture. For consumers already paying steep fuel prices, losing 5–7% mileage feels like a hidden tax.

The Price Promise That Vanished: Union Minister Nitin Gadkari once claimed that ethanol-based petrol would cost around ₹55 per litre - cheaper than regular petrol. Today, E20 is sold at the same price as conventional fuel despite its lower energy value. That means motorists pay the same, but travel fewer kilometres per litre. If affordability was the selling point of this green shift, many now feel short-changed. The government’s intentions may be noble, but implementation has hit the wrong gear.

Insurance And Repair Costs Soar: The survey also found that 52% of owners of older vehicles are facing higher maintenance expenses, up from 28% just two months earlier. The problem doesn’t stop at workshops. Insurance companies are entering the grey zone too - refusing claims for fuel-induced engine damage, calling it “wear and tear” rather than an insured accident. One senior underwriter admitted, “If ethanol corrodes a fuel injector, it’s maintenance. But if that failure causes a fire, then it’s a claim. That’s where disputes begin.” The need for updated policy terms to cover ethanol-related risks is becoming clear. 

Foxconn Set For Major Investment In Tamil Nadu, Create 14,000 Jobs: Taiwanese manufacturing giant Foxconn is set to invest ₹15,000 crore in Tamil Nadu, creating 14,000 skilled jobs, marking the state’s largest-ever engineering employment boost. The investment will focus on advanced manufacturing, AI-driven technology, and R&D, strengthening Foxconn’s presence in India.

India Tackles Export Barriers With Russia To Boost Trade: India is addressing over 65 non-tariff barriers affecting its marine and agricultural exports to Russia, aiming to reduce a significant trade deficit. An early settlement of these hurdles is vital, as India had a $59 billion trade deficit with Russia in 2024–25.

India’s Retail Inflation Slows To 1.54% In September: Retail inflation slowed to 1.54% in September 2025, marking the lowest rate since June 2017. This decline was primarily driven by a sharp drop in food prices, particularly vegetables, pulses, and edible oils. Core inflation, which excludes food and fuel, also eased to 4.6%.

India To Launch Critical Mineral Stockpile, Secure Rare-Earths: The Indian government is set to launch a National Critical Mineral Stockpile (NCMS) programme to ensure the availability of rare earth elements within the country. This initiative comes amid China's decision to impose restrictions on the export of these elements.

Govt Moves To Boost Indian Audit Firms Against Big 4: Govt Likely to Amend Companies Act, Tender Norms to Help Indian Audit Firms Take on Big 4. The Ministry of Corporate Affairs is in advanced stages of consultations to amend the Companies Act and tender norms to enable domestic audit firms to better compete with the "Big Four" global networks.

India Unveils $77B Hydro Plan: India has announced a $77 billion hydroelectric initiative in response to China’s Brahmaputra dam, targeting 208 projects across 12 northeastern sub-basins. The plan aims to generate 76 GW by 2047, including 64.9 GW from conventional hydro plants and 11.1 GW from pumped-storage facilities, strengthening energy security and reducing fossil fuel dependence.