New Delhi: Mark Carney’s win in the Canadian federal elections, alongside the Liberal Party’s success, could signal a much-needed reset in India-Canada relations, which have been significantly strained under the leadership of former Prime Minister Justin Trudeau. Carney, a political newcomer, has expressed his belief that he is “most useful in a crisis,” and his victory has the potential to smooth over the diplomatic tensions between New Delhi and Ottawa that escalated in recent years.
During his campaign, Carney identified rebuilding Canada’s ties with India as one of his top priorities. He stressed that diversifying Canada’s trade relationships with like-minded countries would be a key focus, and that he looked forward to the opportunity to strengthen relations with India. “There needs to be a shared sense of values around that commercial relationship,” Carney said, expressing a clear intention to work toward healing the rift between the two countries.
The relationship between India and Canada soured dramatically in 2023 following allegations from the Trudeau government, which claimed that “Indian agents” were involved in the killing of Hardeep Singh Nijjar, a Canadian citizen and Khalistani separatist, in Surrey, British Columbia, in June 2023. Tensions deepened in October 2024 when Canada expelled six Indian diplomats, prompting India to expel Canadian diplomats in retaliation. The diplomatic fallout led to a freeze in trade talks, the suspension of official visits, and deepened resentment on both sides.
India had long accused Canada of tolerating extremist elements within its Sikh diaspora, and Trudeau’s government was viewed by Indian officials as overly sympathetic to separatist rhetoric. Against this backdrop, Carney’s victory is being closely watched in both Ottawa and New Delhi, with hopes that his leadership may offer a fresh approach to the strained relationship.
Mark Carney, 60, a former Governor of both the Bank of Canada and the Bank of England, has consistently argued that Canada needs to diversify its foreign alliances, particularly in response to tariff threats from its neighbor, the United States. Carney has referred to former U.S. President Donald Trump as a threat to Canadian sovereignty, even stating, “Donald Trump wants to break us so America can own us.” To counter this, he pledged to strengthen Canada’s trade relationships with democratic nations, including India.
While Carney has acknowledged the recent tensions between Canada and India, he remains firm in his belief that India is an essential partner for Canada. “Different person, different policies, different approach to governing,” Carney remarked in a February interview, signaling that his approach to India would differ from Trudeau’s.
A key aspect of the India-Canada relationship is the sizable Indian diaspora, which numbers around 2.8 million, making up a significant portion of Canada’s temporary workers, students, and permanent residents. Among them, the Indian student population—over 427,000 strong—plays a vital role in Canada’s education and labor markets.
Although diplomatic relations may have suffered under Trudeau, immigration from India remained high. Carney is expected to continue fostering this trend, particularly in regard to skilled professionals, tech workers, and students, many of whom contribute to Canada’s economy.
One of the most notable casualties of the diplomatic tensions between India and Canada was the stalled Comprehensive Economic Partnership Agreement (CEPA). This crucial trade deal had been under negotiation for years but was put on hold after the Nijjar allegations and the subsequent diplomatic expulsions.
Carney’s remarks suggest that he may be willing to reignite the trade talks and revive the stalled CEPA. In 2023, bilateral services trade stood at CAD 13.49 billion, and both governments had previously discussed expanding cooperation in sectors like artificial intelligence (AI), fintech, green energy, and higher education. These areas hold considerable potential for growth, and under Carney’s leadership, they could become key drivers of future economic cooperation, especially as both Canada and India seek to reduce dependence on China and the U.S.
Mark Carney’s victory and the Liberal Party’s success in the Canadian federal elections offer a potential turning point in the India-Canada relationship. Carney’s focus on diversifying Canada’s foreign partnerships and strengthening trade with India could pave the way for renewed cooperation, moving beyond the diplomatic strains of the past. The Indian diaspora, high levels of immigration, and untapped trade opportunities all point to the possibility of a more stable and productive relationship between New Delhi and Ottawa in the years to come.
