The recent election of Mark Carney as the Prime Minister of Canada has triggered cautious optimism in New Delhi, ushering in the possibility of a strategic reset between two democracies whose ties were strained to a near-breaking point under the previous Trudeau administration. With a mandate for renewal and a clear foreign policy vision that emphasizes diversification and cooperation, Carney’s victory could pave the way for restoring the diplomatic, economic, and social bridges between Canada and India.
Mark Carney, known globally for his economic acumen as the former governor of both the Bank of Canada and the Bank of England, enters office with a focus on rebalancing Canada’s foreign alliances. In contrast to his predecessor Justin Trudeau, who often found himself at odds with India over contentious issues involving Sikh separatism and unproven allegations, Carney has outlined a more pragmatic, respectful approach. He has publicly stated his commitment to rebuilding Canada’s strained ties with India, calling the partnership essential for both countries.
From Diplomatic Freeze to a Possible Thaw
The India-Canada relationship hit rock bottom in 2023, following Trudeau’s explosive accusations that “agents” of the Indian government were involved in the assassination of Hardeep Singh Nijjar, a Canadian citizen and known Khalistani separatist. The allegations, made without concrete evidence, were met with sharp rebuke from India, which called them baseless and politically motivated. What followed was a diplomatic standoff: expulsions of senior diplomats, stalled trade talks, and the complete suspension of official high-level visits.
Tensions escalated further in October 2024, when Canada expelled six Indian diplomats and India retaliated in kind. At the heart of the tension was New Delhi’s long-standing concern that Canadian soil was being used as a safe haven for Khalistani elements, who openly organized anti-India rallies and were accused of vandalizing Hindu temples. Despite India’s repeated warnings and requests, Trudeau’s administration appeared unwilling or unable to curb such extremist activity.
Carney’s ascent, therefore, offers not only a change in leadership but a change in posture—one grounded in dialogue and mutual respect. In one of his pre-election interviews, Carney stated that his government would prioritize trade diversification with like-minded nations, adding, “There are opportunities to rebuild the relationship with India. There needs to be a shared sense of values around that commercial relationship.”
Jagmeet Singh’s Defeat Removes a Major Hurdle
One of the most significant political developments that may benefit India-Canada relations is the defeat of Jagmeet Singh, the leader of the New Democratic Party (NDP) and a staunch supporter of the Khalistan movement. Singh, long a polarizing figure in Indo-Canadian affairs, was defeated in Burnaby Central by Liberal Party candidate Wade Chang and later resigned as NDP leader.
Singh’s vocal support for Khalistani groups and frequent criticisms of the Indian government had severely complicated the Trudeau administration’s ability to mend fences with India. His NDP held the balance of power in Trudeau’s minority government and often influenced the government’s foreign policy stance toward India. With his departure and the NDP reduced to a marginal role in Parliament, a significant political obstacle has been removed from the path of renewed diplomacy.
For New Delhi, Singh’s exit signals a return to more conventional diplomatic channels, allowing room for constructive engagement rather than ideological confrontation.
Carney’s Strategic Vision and India’s Role
Carney’s broader foreign policy goals align closely with India’s ambitions on the world stage. His call to diversify Canada’s trade and diplomatic relationships away from over-reliance on the United States and China echoes India’s own vision of multipolar global cooperation. With increasing volatility in US politics and growing concerns over China’s assertiveness, both countries have incentives to explore deeper economic and security partnerships.
Prime Minister Narendra Modi was among the first world leaders to congratulate Carney, describing India and Canada as bound by “shared democratic values, a steadfast commitment to the rule of law, and vibrant people-to-people ties.” Modi’s outreach, combined with Carney’s willingness to look past recent tensions, sets a positive tone for bilateral re-engagement.
Economic and Educational Opportunities for India
One of the most immediate areas of potential cooperation lies in trade and investment. The stalled Comprehensive Economic Partnership Agreement (CEPA), once a symbol of growing bilateral synergy, was shelved amid last year’s diplomatic crisis. With Carney at the helm, there is a clear signal that Canada may be ready to return to the table.
Trade between India and Canada was valued at over CAD 13.49 billion in 2023. A revival of CEPA could unlock major opportunities for Indian exports in sectors like pharmaceuticals, textiles, digital services, and agritech. Moreover, areas of mutual interest—green energy, artificial intelligence, cybersecurity, and climate resilience—present new ground for cooperation.
Canada is also a top destination for Indian students and skilled workers. In 2023 alone, over 427,000 Indian students were enrolled in Canadian institutions. The continuation and expansion of student and work visa pathways under Carney would be beneficial for both sides—strengthening Canada’s workforce and educational institutions, while offering Indians access to global opportunities.
Diaspora Dynamics and the Path Forward
The Indo-Canadian diaspora, numbering nearly 2.8 million, is central to this relationship. While immigration levels remained high under Trudeau, tensions around the political leanings of some segments of the Sikh community created social friction and security concerns. Carney’s challenge will be to differentiate between legitimate community advocacy and extremist activity that threatens another country’s sovereignty.
India has always made it clear that it respects the rights of peaceful protest and free speech, but cannot tolerate foreign soil being used to propagate violence and separatism. A Carney-led government that takes these concerns seriously and ensures lawful conduct within its borders could dramatically improve trust and cooperation between the two countries.
The January 2025 Canadian commission report, which found “no definitive link” between Nijjar’s killing and any foreign state, only reinforced India’s long-held view that Trudeau’s allegations lacked substance. This report gives Carney the political cover to distance his government from past accusations and move forward with a clean slate.
A New Chapter in Bilateral Cooperation
The reset in India-Canada relations will not be instantaneous. Deep scars remain from the diplomatic standoff of the past two years. However, with a more balanced and respectful leadership now in Ottawa, the potential for revival is real.
For India, the benefits of this thaw are significant: expanded market access for its industries, greater educational opportunities for its youth, improved protection for its diaspora, and a stronger diplomatic footprint in North America. For Canada, deeper engagement with the world’s most populous democracy offers long-term economic and geopolitical dividends.
Mark Carney’s election does not guarantee immediate reconciliation, but it offers something even more valuable—an open door. It is now up to both governments to walk through it together and begin crafting a partnership rooted in mutual respect, strategic alignment, and people-centric development.
