I am going to have to go with India. Since there is no other information about your product, service, etc., I will assume that you make some sort of cheap widget that anyone with a couple bucks can afford. Therefore, with the major difference in population, simply expanding into India with your cheap product will give you much higher sales than expanding into Canada. A huge population that can all buy something cheap will be more profitable than a small population that cannot all buy something expensive.
The main advantage of trying to brave the India market, despite it's difficulties, is market size. More than 1.1 billion potential customers and growing fast, while Canada has a stable population of only 30 million. So it depends if you are in a growth business that can capitalize on the massive customer base that is India or not.
It all depends on what you want to do, as many posts have stated before. Here is another consider that is important. Transportation. As the price of oil increases, you will need to think about whether you will have to transport your good. If so, you might want to choose a place that is closer. Oil is around 106 dollars a barrel today. Also keep in mind that Canada is a commodity based economy, which might factor into your business plan.
The answer to this question depends a lot on what kind of business you have and where you are based. In general, the strengths of India, as many businesses have recently discovered, is that the cost of labour is cheap. This is why many telephone companies for example have off-shored their workforce to India as it is cheaper to pay Indian staff than national staff. You would have to check the benefits and disadvantages against your own individual business context.
The Indian economy is growing at a very fast rate. With a total population of 1,500,000,000 though a large percentage of Indians would be considered poor, in terms of absolute numbers those in the middle class as well as the upper class is growing at a very fast rate. The response to your question would depend to a large extent on what kind of expansion plans you are looking at, the category of products you are selling and the alike. But the large consumption base that India is slowly turning into, any firm entering now would have many advantages including that of being the first-mover.
I think I might be tempted to try India, although Canada has many attractions, most of them already mentioned. India, however, will eventually have more people than any other nation on the planet. If one could break into the market there with the right product, the potential for sales would be enormous, as long as India's economy continues to evolve in the right direction.
If you were opening businesses there, labor costs would of course be much higher in Canada. However, depending on where you're talking about in India, you might have access to a higher skilled workforce in Canada. But India is a massive market with a growing middle class, so I think in terms of rapid growth, that's where businesses ought to look to expand.
In general, Canada would probably be a better place to expand into. It has a much more open business climate and does not suffer from the "license raj" that makes it so hard to expand into India. On the other hand, the Canadian market is more likely to be saturated and have fewer niches to exploit.