India-Canada Relations After Mark Carney’s Return | Bitter or Sweet? With Mark Carney’s return as Canada’s Prime Minister following a dramatic Liberal resurgence, diplomatic winds appear to be shifting—particularly in Ottawa’s strained ties with New Delhi. The former central banker has already made overtures toward reconciliation, notably joining Ram Navami celebrations with the Hindu community earlier this month, signalling a pivot from the confrontational tone of the Justin Trudeau era.
From Diplomatic Freeze to a Fresh Start
India-Canada relations have been frozen since Trudeau’s explosive allegation in September 2023 that India was behind the killing of Khalistani separatist Hardeep Singh Nijjar. The fallout triggered tit-for-tat diplomatic expulsions, a halt in visa services, and a near-total breakdown in official engagement.
Now, with Carney replacing Trudeau in March and charting a course toward pragmatism, India is watching closely. The tone from Ottawa has notably softened.
“It’s an incredibly important relationship on many levels – personal, economic, and strategic,” Carney said on the eve of the elections.
The 1.8 million-strong Indo-Canadian community, coupled with Canada’s 427,000 Indian students, plays a crucial role in shaping the bilateral equation. With Carney’s foreign policy expected to be less driven by domestic Khalistani politics, India is reportedly considering restoring its High Commissioner to Canada, a sign of thawing diplomatic ice.
Carney’s Trade-Driven Diplomacy: India as a Strategic Ally
Amid rising trade tensions with US President Donald Trump, Carney has laid out a plan to diversify Canada’s economic partnerships. India is high on that list.
“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,” Carney said in a March interview.
ALSO READ: Senior Indian diplomat holds talks with Taliban days after Pahalgam attack
The Comprehensive Economic Partnership Agreement (CEPA) talks were stalled during the diplomatic crisis, but with new leadership in Ottawa, a revival is now on the table.
Bilateral trade between India and Canada hit CAD 13.49 billion in 2023, despite the frost in political ties. With both economies looking to hedge against geopolitical uncertainties, the stage is set for deeper economic cooperation.
Ending the Trudeau Chapter
Carney’s approach is a clear departure from Justin Trudeau’s tenure, during which Indo-Canadian ties reached historic lows. Trudeau’s dependence on Jagmeet Singh’s pro-Khalistan NDP for political survival alienated New Delhi and emboldened fringe elements. The vandalism of Hindu temples and glorification of Khalistani separatists further soured ties.
But with Jagmeet Singh’s electoral defeat and resignation as NDP chief, those pressures are expected to ease.
Unlike Trudeau, Carney is a technocrat with an economics-first agenda. As former governor of the Bank of Canada and the Bank of England, he is expected to focus more on economic recovery and less on ideological foreign policy.
Strategic Reset Amid U.S. Uncertainty
Facing a belligerent Donald Trump and threats of trade penalties from Washington, Carney has framed India not just as a trade partner, but as a geostrategic ally.
“We need new friends and new allies,” he noted, referencing the need for robust non-U.S. partnerships.
India, in turn, may find in Carney a more predictable and constructive counterpart—one interested in building bridges rather than burning them.
