This week, Canadian policymakers have an opportunity to make significant progress in their bid to diversify the country’s export markets.

Today, Indian Prime Minister Narendra Modi arrived in Canada for a three-day stay, the first such visit by an Indian head of state in over 40 years.

At the top of the agenda are two important deals between the two countries: a free-trade agreement and a foreign-investment protection pact.

Even before crude oil’s collapse roiled Canada’s energy patch, the Bank of Canada (BoC) was keen on spurring greater export activity in the non-resource sectors.

Central bank chief Stephen Poloz believes a rise in exports, particularly by the country’s beleaguered manufacturers, will beget a virtuous economic cycle of greater business investment, more hiring, and increased spending.

In the near term, the resurgent U.S. holds the key. That’s because the U.S. absorbs roughly three-quarters of Canada’s exports.

As a result, a significant portion of Canada’s economy is essentially beholden to the U.S. According to the World Bank, exports of goods and services account for about 30% of Canada’s gross domestic product (GDP), which means that about 22.5% of the country’s GDP is derived from exports bound to the U.S.

Canada’s abundance of resources and the decade-long global commodities supercycle allowed for complacency in developing new markets. But now that the boom has gone bust, it’s clear that Canada needs new destinations for its good and services to keep the country’s economy on a steadier path.

Until recently, Canada’s exporters had given the emerging markets scant attention, even as many of their developed-world peers shrewdly tapped these fast-growing markets.

Roughly half of all U.S. exports were shipped to emerging markets in 2013, in contrast to just 14.2% of Canadian exports.

Of course, establishing a foothold in a new market, even one that’s growing by high single digits or even double digits, is no easy task.

Last year, we wrote about a Conference Board of Canada study that tracked the export activity of all small and medium Canadian companies over the period from 1994 through 2008.

During that period, top-performing companies nearly doubled their sales in emerging markets every year. But the study also found that numerous companies faced significant challenges in entering these markets, with many opting to discontinue exports to such countries after less than a year.

Based on the Conference Board’s list of characteristics of firms with a successful track record of exporting to emerging markets, overcoming these hurdles requires smaller companies to pursue a demanding strategy.

The best firms first establish themselves in Canada before attempting to penetrate emerging markets. To gain traction overseas, they must be innovators, with new products introduced frequently. And to mitigate risk, they must diversify across a number of regions, while ensuring continued access to substantial capital.

Given such challenges, trade agreements and investor protections should prove helpful in facilitating trade flow. And Canada’s sizable Indian diaspora, numbering about 1.2 million people (Canada’s total population is estimated at around 35.7 million), should also foster greater trade.

In 2013, two-way trade between Canada and India totaled just $6.2 billion, putting the Subcontinent in 12^th place among Canada’s trading partners. Exports to India totaled $3 billion, or 0.7% of total exports. And according to The Globe and Mail, most of these were bulk commodities, such as peas, lentils, fertilizer, canola oil and iron ore.

When negotiations for a Canada-India free-trade agreement where launched nearly five years ago, their ambitious aim was for a deal that would increase bilateral trade to $15 billion within five years. If that goal were to be met, then that would vault India to seventh place among Canada’s top trading partners, just behind Germany.

With the ninth round of negotiations underway, most see an eventual deal as more aspirational than realistic. The Globe and Mail notes that India has a highly protected market, while Canada doesn’t have much to offer in return since it already has relatively low tariffs.

Instead, most observers see India’s ratification of the foreign-investor protection treaty that the two countries signed in 2012 as the most likely near-term trade win. The agreement would give foreign investors a more level playing field in each country by conferring many of the same protections that domestic investors enjoy, especially the ability to bring suit when disputes arise.

The latter has been a major sticking point in the past, though Reuters recently reported that negotiators from both countries were rushing to work out their differences ahead of Mr. Modi’s visit.

Interestingly, the one other bit of speculation on the trade front concerns the export of uranium. The Indian government is in advanced talks with Canada’s Cameco Corp (TSX: CCO, NYSE: CCJ), one of the largest uranium producers in the world, to negotiate a long-term supply contract.

Rumor has it that a finalized deal could be announced as soon as this week.

Uranium exports were previously a huge source of contention, due to claims that the uranium used to develop India’s first atomic bomb was sourced from Canada. Consequently, Canada banned uranium exports to India from the 1970s until a new deal for commercial export of the metal was brokered in 2013.

That testy relationship may also be why it’s been so long since an Indian PM has paid Canada a visit.

But now it’s clear that both countries are anxious to make a deal.