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Mark Carney’s victory in the Canadian federal elections marks a potential turning point for India-Canada relations, which have been under severe strain in recent years. With Carney’s Liberal Party win, there is cautious optimism in both New Delhi and Ottawa about repairing the diplomatic damage that occurred under former Prime Minister Justin Trudeau.
During his campaign, Carney, a former governor of the Bank of Canada and the Bank of England, made it clear that rebuilding ties with India would be a priority. “There are opportunities to rebuild the relationship with India. There needs to be a shared sense of values around that commercial relationship,” Carney had said, adding that he looked forward to working closely with New Delhi if elected Prime Minister.
Diplomatic Relations Hit Rock Bottom Under Trudeau
India-Canada ties nosedived in 2023 after the Trudeau government alleged the involvement of “Indian agents” in the killing of Hardeep Singh Nijjar, a Canadian citizen and Khalistani separatist, in British Columbia. India categorically denied the allegations, leading to a bitter diplomatic standoff involving expulsions of diplomats, suspension of trade talks, and a freeze on high-level visits.
New Delhi had long accused Ottawa of turning a blind eye to extremist activities among Sikh separatist groups in Canada. Trudeau’s perceived leniency toward such elements, including public rallies and vandalism targeting Hindu temples, only deepened the mistrust. Against this backdrop, Carney’s different approach is being watched closely.
Carney’s Vision: Trade Diversification and Democratic Partnerships
Carney has pledged to diversify Canada’s trade relationships amid rising tensions with the United States, calling for stronger economic ties with democratic nations like India. His remarks about reducing dependence on the US and engaging India as a key partner have been welcomed by observers seeking a thaw in bilateral relations.
One of the immediate areas where progress is expected is the stalled Comprehensive Economic Partnership Agreement (CEPA). Negotiations on CEPA were halted after the diplomatic fallout in 2023. Reviving this agreement could boost bilateral services trade, which stood at CAD 13.49 billion in 2023, and open up new avenues in sectors like AI, fintech, green energy, and higher education.
Diaspora and Immigration: A Continuing Bridge
Despite political tensions, immigration from India to Canada remained strong under Trudeau. India remains the largest source of immigrants, with the Indo-Canadian community now nearly 2.8 million strong. Carney is likely to continue encouraging skilled immigration, particularly among tech workers, students, and professionals, reinforcing people-to-people ties between the two nations.
However, New Delhi remains firm on its core concerns: tackling extremism and ensuring Canada takes action against separatist activities. How Carney balances domestic pressures with his promise of rebuilding trust with India will be key to the future trajectory of India-Canada relations.
Mark Carney’s leadership offers an opportunity to reset India-Canada ties, focusing on shared democratic values, trade cooperation, and greater engagement while addressing longstanding security concerns. His success in achieving this delicate balance will define the next chapter of this critical bilateral relationship.
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