Highlights:
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Canada and India agree to begin talks on a new free trade agreement.
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Goal is to raise two-way trade to CAN$70 billion by 2030.
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Ties were strained after Canada’s 2023 allegations over the killing of Sikh activist Hardeep Singh Nijjar.
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Prime Minister Mark Carney seeks to diversify Canada’s trade beyond the United States.
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Carney accepts Prime Minister Narendra Modi’s invitation to visit India next year.
Canada and India have agreed to begin formal talks on a new free trade agreement, marking a significant step toward rebuilding bilateral ties. The announcement was made by Canadian Prime Minister Mark Carney following his meeting with Indian Prime Minister Narendra Modi. Their discussion took place on the sidelines of the G20 summit in South Africa, signaling that both nations are ready to move forward after several years of diplomatic strain.
Carney said in a statement that he and Modi agreed to launch talks on an “ambitious” trade deal that aims to “double two-way trade to CAN$70 billion by 2030.” He confirmed that he accepted Modi’s invitation to visit India early next year.
The renewed engagement represents the clearest sign yet that Canada and India are prepared to restore cooperation that had been disrupted since 2023.
India at the Center of Canada’s Diversification Strategy
The decision to restart trade discussions aligns with Carney’s broader goal of reducing Canada’s economic dependence on the United States. Since taking office in March, Carney has repeatedly emphasized the need to build stronger commercial ties with countries across Asia, particularly India, one of the fastest-growing major economies.
Canada is seeking a stable, long-term trade partnership with India in sectors including technology, green energy, education, agriculture, and services. The two countries exchanged about $9 billion (CAN$12.3 billion) in goods and services in 2023, according to government trade data. Both sides now see potential to significantly increase that figure if political conditions remain stable.
Carney has framed India as a priority market for Canada’s next phase of economic expansion. With the United States imposing tariffs on key Canadian sectors, officials in Ottawa have been pushing to diversify supply chains and restore trade talks that stalled during earlier political disputes.
India-Canada Relations Strained After 2023 Allegations
Relations between Canada and India deteriorated sharply after Ottawa accused New Delhi of involvement in the 2023 killing of Hardeep Singh Nijjar, a Canadian Sikh separatist leader. Nijjar, 45, was a naturalized Canadian citizen and a prominent face of the Khalistan movement, a long-standing separatist campaign seeking an independent Sikh homeland.
Ottawa alleged that India was linked to Nijjar’s killing in Vancouver, claims that New Delhi denied. The dispute triggered retaliatory measures from both sides, disrupting consular services and slowing trade processing. Diplomatic tensions also affected students, travelers, and the broader Indian diaspora in Canada, which includes the largest Sikh community outside India.
Despite the fallout, both governments have now agreed that the economic potential of a renewed partnership outweighs prolonged confrontation.
India’s Historical Dispute With Khalistan Movement
The Khalistan issue has repeatedly affected India’s relations with Western nations that host large Sikh populations. The movement emerged soon after India’s independence in 1947 and has been linked to major violent incidents, including the assassination of an Indian prime minister and the bombing of a passenger jet.
For India, the movement remains a sensitive national security matter. Canada’s large Sikh community includes both moderate groups and activists advocating for Khalistan. The presence of these activists has been a recurring source of tension between Ottawa and New Delhi.
The Nijjar case intensified those concerns, bringing diplomatic engagement to a near standstill until recent attempts by both governments to rebuild trust.
Strategic Reset as Canada and India Look Ahead
The decision to reopen trade negotiations suggests both governments see value in stabilizing ties. Carney’s acceptance of Modi’s invitation to visit India is being viewed as a symbolic step toward normalization.
While the trade talks are in the early stages, officials say the objective of reaching CAN$70 billion in two-way trade by 2030 will require sustained cooperation, reduced barriers, and renewed focus on the commercial opportunities in India.
Canada and India are now positioned to pursue a more stable and strategic partnership, driven by shared economic goals and the recognition that both countries benefit from closer engagement.
