The election of Mark Carney as Canada’s new Prime Minister has sparked renewed optimism for a potential reset in the strained relationship between India and Canada. As the interim Prime Minister, he highlighted that restoring and strengthening bilateral ties with India will be one of his foreign policy priorities. He envisions Canada as a constructive global partner especially during economic and diplomatic tensions with US. During the period 2023-24, the relationship between India and Canada declined significantly under the former Prime Minister Justin Trudeau. With Mark Carney in power, there is potential in restoring the cooperation in domains like trade, investment and mutual global interests.
Trudeau VS Carney
India-Canada relations hit rock bottom during Trudeau’s tenure primarily because of his support to the Pro-Khalistan movement based in Canada. Trudeau’s government had strong ties with New Democratic Party (NDP) led by Jagmeet Singh, a staunch Pro-Khalistan leader. Foreign Minister S Jaishankar referred to diminishing Indo Canadian relations as “political agenda of the Trudeau’s government centered around vote bank politics.”
Mark Carney’s victory and the dramatic downfall of NDP to just 7 seats with its leader Jagmeet Singh losing his seat and stepping down from the parties leadership provides Carney an opportunity to enhance relations with India. As former head of two central banks, Mark Carney, a renowned economist, understands the importance of India’s economy. India with its growing GDP, provides economic opportunity for Canada to reduce its reliance on traditional markets like US and China.
Diplomatic Ties
Diplomatic relations between India and Canada declined under Justin Trudeau. The September 2023 charges by Canadian security officials on the Indian agents for assassination of Hardeep Singh Nijjar, caused this deterioration. In October 2024, Canada expelled six Indian diplomats, including High Commissioner Sanjay Kumar Verma, over an assassination allegation, prompting reciprocal expulsions by India and suspension of Indian visa services for Canadians, severely straining bilateral relations and disrupting travel, commerce, education, and familial ties.
Mark Carney on India
Carney has personally described India as “immensely significant – economically, and strategically,” signalling a renewed focus on enhancing bilateral relations. In view of escalating global geopolitical uncertainty, Canada aims to reduce its dependence on the US, with India emerging as an option. Carney avoided from referencing the Nijjar issue in discussions regarding India-Canada relations and rather focused on the necessity of “mutual respect” to address and reduce current tensions, suggesting a constructive and diplomatic approach. Mark Carney supports policies that benefit Indian students and skilled professionals. One such policy is the Century Initiative which seeks to increase Canada’s population to 100 million by 2100 by facilitating immigration of skilled workers from India. Furthermore, Carney has supported the enhancement of the Global Skills Strategy Program, which aims at attracting top international talent to foster innovation and growth within Canadian industry. The Francophone Immigration Policy is another example which can provide significant advantages to bilingual candidates, while seeking Permanent Residency in Canada, hence generating new prospects for Indian applicants from francophone backgrounds. These policies demonstrate an achievable and progressive strategy to improve India-Canada relations under Carney’s leadership.
However, experts and professionals have also warned about the potential changes with tighter immigration measures under the new government. They anticipate that the government will reconsider its existing policies and may prioritise individuals from specific industries and educational sectors. New applicants are likely to encounter strict rules and background checks. The pressure on Canada’s housing and infrastructure may decrease the number of Temporary Residents, particularly international students and workers. Individuals currently residing in Canada may find it more accessible to apply for Permanent Resident (PR).
Restarting Trade Relations
Under Prime Minister Trudeau’s leadership, trade relations also experienced setbacks. In September 2023, with no official reason, Canada unexpectedly suspended trade negotiations with India after nine rounds of discussions under Free Trade Agreement (FTA). This incident worsened the already fragile relations between the two countries.
During one of his interactions with media, Mark Carney said, “What Canada will be looking to do is to diversify our trading relationships with like-minded countries, and there are opportunities to rebuild the relationship with India.” This statement reflects how Carney’s government may have a different approach towards India.
An interim trade agreement called The Early Progress Trade Agreement (EPTA) between India and Canada is essential to establish deeper economic cooperation. It is the initial step towards the broader Comprehensive Economic Partnership Agreement (CEPA). The trade war initiated by the US, caused economic difficulties for both India and Canada. Increased tariffs by the US pose a significant threat to Canada, increasing concerns of a potential recession which may result if there is any disruption of trade. India is actively seeking a beneficial bilateral trade agreement with the US to safeguard its economic interests and ensure market stability. With the imposition of U.S. tariffs, there is an opportunity for India and Canada to revive the CEPA, allowing both countries to diversify their trade options and reduce reliance on a single market. This mutual need provides a chance to enhance the economic relations, reduce dependence on US, and develop a more robust bilateral partnership against global trade uncertainty.
India-Canada Relations and Indo-Pak Dynamics
Mark Carney’s response to the Pahalgam attack remain neutral and cautious. It is in India’s interest to strengthen its diplomatic engagement with the new Canadian government and seek its support in the ongoing fight against cross-border terrorism backed by Pakistan. Deepening ties with Canada on this front could contribute to further isolating Pakistan within the international community.
Conclusion It is hoped that the election of Mark Carney as Prime Minister will likely result in a significant change in Canada’s stance towards its relationship with India. Prime Minister Narendra Modi expressed his willingness to strengthen ties with Canada’s new leadership, and with both countries now planning to reinstate diplomats, starting with India nominating Dinesh Patnaik as High Commissioner to Canada, marks a crucial step towards restoring normal diplomatic relations. Moreover, with the global economic uncertainty due to the tariff war imposed by the US, the economic relationship between India and Canada which had bilateral trade in goods totalling approximately ₹69,368 crore (approximately $8.37 billion USD), assumes prime importance for both the countries. Canada which has Indians as 5% of its population, is an important trade partner for India. With change in leadership under Carney, both the countries can now look forward to revival of their traditional cultural and economic ties. Strengthening India-Canada ties can also play a strategic role in rallying broader international support against Pakistan-backed terrorism.
