A Trade Driven India-Canada Reset ?

Amidst the chaos and misfortune crowding the world, it is quite reassuring to see Canada and India come to good terms, with trade delegations in tow, just some years after diplomatic fumbles nearly burnt to the ground relations between the two nations. Commerce Minister Piyush’s Goyal’s landmark visit to Ottawa recently, accompanied by India’s largest ever outbound business delegation of more than 112 companies signals a new chapter in India-Canada ties. 

This trade deal’s significance lies in contrast to the recent past that transpired under Prime Minister Justin Trudeaus’ tenure. In 2020, the Indian state had designated Hardeep Singh NIjjar as a terrorist. In September 2023, PM Trudeau stood before his parliament and confidently alleged that a foreign nation, India, was behind the killing of Nijjar. But the Canadian Government did not produce any evidence to the public. What followed was a frenzy. Fantastical but dishonest narratives were spun by the public and the media, vested interests peddled their versions of the truth, and all the while Canada continued to indict a friendly, sovereign nation. The narratives remain absurd. More importantly, they were and are, motivated in that they suggest that India which has long followed values of non-interference and mutual respect, engaged in Nijjar’s killing on foreign soil. 

The consequence perhaps, was inevitable given the Trudeau government’s eagerness to attract the Khalistani voter block in Canada. At the same time, Delhi had consistently pressed Ottawa to act against extremist elements that celebrated violence against the Indian institutions without any reproach. The requests fell on deaf ears. Demonstrably, this indulgence resulted in India-Canada relations being weaponised as a tool for Canadian domestic politics. The fallout was big, and unlike anything seen in a long time in India. Diplomats were mutually expelled; India withdrew its High Commissioner to Canada and expelled the Canadian High Commissioner and other diplomats. Among the responses was the strategic suspension of trade talks. 

The collapse of Justin Trudeau’s government and the arrival of PM Mark Carney, coincided with the shifts we see today in the international sphere. The Second Trump Administration’s volatility and callousness, no doubt, have made the importance of a multi-aligned, and capable India sufficiently clear. Mark Carney’s personal visit to India earlier in 2026 proved to be the turning point. The numbers on the table are compelling. Bilateral goods and services trade already reached $23.66 billion in 2024, with merchandise trade touching $8.98 billion.  Both sides have now set their sights on tripling this figure to $50 billion by 2030, underpinned by the proposed Comprehensive Economic Partnership Agreement (CEPA). The agreement will establish a broad-based trade and investment framework covering trade in goods and services, investment facilitation, regulatory cooperation, intellectual property, professional mobility, and supply chain partnerships. On the tariff front, the deal envisions gradual reduction or elimination of customs duties on selected goods, alongside critical minerals cooperation to secure supply chains for lithium, cobalt, uranium, and rare earth elements, all of which are indispensable to India's energy transition ambitions. India's key export interests include drugs and pharmaceuticals, iron and steel, seafood, cotton garments, electronic goods, and chemicals, with India already holding a trade surplus of $1.39 billion with Canada in FY26. Talks on CEPA, long stalled since 2023, have been revived with energy and ambition, with both sides expressing hope for a deal by the end of 2026. 

Ever since India weaponized it’s nuclear capability with Canadian infrastructure, intentionally or unintentionally, Canada has remained a strategic card for India. More so now than ever. The North American nation possesses enormous reserves of critical minerals, clean energy capacity, and notably, some of the best institutions in artificial intelligence and quantum computing. These inputs are vital for India and the vision of 2047. On the other hand, Canada gains from India’s greatest exports. Indian STEM graduates, an expanding start-up ecosystem, and credible manufacturing ambitions are reliable links in an otherwise volatile global supply chain. 

The visuals of riotous mobs and scorched Indian tricolours is not an easy sight to forget. While economic realities are smart, it can not come at the cost of dignity. This thaw is significant, but clearly, the structural issues behind the previous freeze remin. Canada’s stance on anti-India extremism on its soil has not been meaningfully resolved. Canadian commitment to prevent its territory from being used as a base for anti-India gathering, whether for masses or monies, must be a pre-requisite for a durable partnership.