Hope floats for a thaw in India-Canada relations

PRIME Minister Narendra Modi set foot on Canadian soil on Monday to attend the G7 Summit in Alberta, just over a decade since his last visit to Canada in April 2015, then at the invitation of PM Stephen Harper.

Much has changed in the intervening years — beginning with Harper’s electoral defeat in October 2015 and the ascent of Justin Trudeau, the rising political traction of Khalistani narratives in Canada, Trudeau’s disastrous visit to India in 2018 and the subsequent attempts to portray India as a malign actor, culminating with the public accusation that “agents of the Indian government” were behind the June 2023 murder of Khalistani activist Hardeep Singh Nijjar. The allegation led to the expulsion of High Commissioners, the suspension of visa services and a deep freeze in diplomatic engagement between the two countries.

The G7 invite is thus an attempt to mend fences, and set in motion a quiet reset of relations at the highest level, without the optics or political risks of a standalone bilateral visit. This effort is being driven by what may be called the three Ts —Trudeau, Trump and Trade.

The first T — Trudeau — represents the source of much of the animus. Rarely, if ever, has India’s Ministry of External Affairs publicly rebuked the sitting leader of a Western democracy as harshly as it did Trudeau, not only for his allegations over Nijjar but also for his repeated forays into Indian domestic politics — such as his support for the farmers’ protests. Trudeau’s decision to step down from politics has effectively removed a persistent irritant and the symbolic face of the pro-Khalistan tilt in Canadian governance.

The second T — Trump — refers to the geopolitical earthquake caused by Donald Trump’s dramatic return to the US presidency and his renewed pressure on America’s closest neighbours. Trump’s threats of tariffs, renegotiation of trade deals and open musings about absorbing Canada as America’s “51st state” upended the Canadian political landscape.

The result: a decisive victory for former Bank of Canada and Bank of England governor Mark Carney, who became Prime Minister with a near-majority in Parliament. His main challenger, Conservative leader Pierre Poilievre, was seen as too ideologically close to Trump. Meanwhile, Jagmeet Singh — leader of the third-largest party, the NDP, and a vocal supporter of Khalistani causes — suffered a major setback, diminishing yet another source of friction in India-Canada relations.

The third T — Trade — represents the compelling strategic rationale for Canada to rebuild bridges with India. Trump’s economic nationalism has made it imperative for Canada to diversify its trade relationships, particularly given that 97 per cent of Canadian oil and 75.9 per cent of Canada’s domestic exports are effectively hostage to the US market. India, with its massive and growing consumer base, expanding middle class and appetite for energy, technology and infrastructure investment, offers an obvious counterbalance. Canadian Pension Funds have invested more than $75 billion in India, reflecting confidence in India’s long-term economic prospects and serving as a steady ballast for the relationship during the diplomatic chill.

The Khalistani issue remains the elephant in the room. While Canada’s Indian diaspora is 2.8 million strong, politically active with 22 MPs in a House of 343, and overwhelmingly law-abiding, a fringe minority of Khalistani sympathisers has managed to hijack the narrative — starting with the tragic bombing of Air India’s Kanishka Flight 182 in June 1985, which claimed 329 lives and remains the deadliest terrorist attack on Canadian soil.

India has long believed that Canada fails to give sufficient weight to its legitimate security concerns, particularly when Indian diplomats are targeted or intimidated under the guise of protected speech. For its part, Canada views the killing of a Canadian citizen on Canadian soil as a grave breach of sovereignty. India has strongly denied any involvement, calling the charges “absurd and motivated”. With four Indian nationals now on trial for Nijjar’s murder, New Delhi is prepared to let the Canadian legal process run its course. The continuation of the law enforcement and security dialogue offers an institutional forum to address such concerns through established channels.

That is why Prime Minister Mark Carney does not need to hold his nose while engaging with the leader of the world’s largest democracy. He has a clear template to emulate: that of the United States. Washington, confronted with allegations about a plot to assassinate Khalistani figure Gurpatwant Singh Pannun, did not allow the episode to derail the broader trajectory of its relationship with India. Instead, it pursued the matter through judicial forums while continuing to deepen cooperation on trade, technology and defence. Canada would do well to take a similarly pragmatic approach — firm where needed, but forward-looking where possible.

A concrete starting point for restoring economic momentum is the revival of negotiations on the stalled India-Canada Comprehensive Economic Partnership Agreement (CEPA) and the Bilateral Investment Promotion and Protection Agreement (BIPPA). India’s growing interest in bilateral trade agreements — evident in recent deals with UAE, Australia and UK — signals a readiness to engage constructively.

For Canada, re-engagement on these fronts would not only signal goodwill but also unlock tangible opportunities across key sectors such as energy, education, agriculture, critical minerals, clean technology and artificial intelligence.

Beyond economics, India and Canada share foundational values: multiculturalism, democracy and a commitment to the rules-based international order. This alignment creates opportunities for cooperation in multilateral forums on global challenges — including climate change, food security and digital governance.

The Modi-Carney meeting at Kananaskis is not a panacea for the tensions that have plagued the relationship in recent years. But it can be the first real step in a much-needed thaw. Strategic convergence, not tactical provocation, must guide the path forward.

And there is one immediate, symbolic gesture that could catalyse this reset. Today, there are only two countries where India does not have High Commissioners by design. One is Pakistan. The other is Canada. After Kananaskis, it is in both nations’ interest to ensure that Canada no longer belongs in that unfortunate pairing.

Vikas Swarup is a former High Commissioner to Canada and a bestselling author.

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