Canadian Prime Minister Mark Carney’s visit to India, February to March 2, was sandwiched between the AI Impact Summit and the outbreak of the U.S.-Israel War against Iran. Yet the visit’s two legs – Mumbai and Delhi – were highly consequential, producing concrete outcomes that may have a long-term positive impact on the India-Canada partnership’s future trajectory. The rapprochement that began with the two prime ministers’ meeting on the sidelines of the G7 summit in Kananaskis in Canada’s picturesque Rockies in June 2025 is now transformed into a full-fledged reset.
Yet it will be realistic to see that differences on some sensitive issues and practical challenges continue. This signifies the need to persist in the positive spirit that guided discussions during Carney’s visit.
Carney’s was the first visit to India by a Canadian PM in eight long years. The enthusiasm and positivity displayed by the two sides showed how far they had moved from the break in the bilateral that took place during former PM Justin Trudeau’s tenure, especially in its last phase. His exit from the political scene, his successor’s pragmatic, business-orientated approach, the Canadian electorate’s reiteration of confidence in the Liberal Party (but without Trudeau), and the various pressures exerted by Trump 2.0 on Ottawa and New Delhi ensured that the two capitals moved quickly closer together. The visit was the platform to announce a multi-dimensional roadmap for a new kind of relationship, one that fuses India’s vision of ‘Viksit Bharat’ (‘Developed India’) and Canada’s vision of ‘Build Canada Strong’.
At least seven elements of the new partnership hold significance.
The first relates to trade, investment, and financial linkages. By starting his visit in Mumbai, Carney became the third G7 head of government (after the UK and France) to acknowledge the city’s special status as India’s business capital. He will expect that his discussions at the Canada-India Growth and Investment Forum and elsewhere will be a catalyst for further expansion of economic and technological collaboration. The process has been given a head start by the two governments’ decision to launch negotiations for a Comprehensive Economic Partnership Agreement (CEPA). The agreement on the Terms of Reference (TOR) was signed, and the two governments announced their intention to sign the trade agreement by the end of 2026. PM Modi announced a target of $50 billion for bilateral trade by 2030.
The focus was on investment. Despite the turbulence of recent years, Canadian pension funds showed faith in the vitality of India’s economic growth and have invested $107 billion in the country, with the potential to increase. PM Carney urged India to accord pension funds the same benefits as given to sovereign wealth funds – which PM Modi promised to consider.
Two institutional steps were taken. The Finance Ministers’ Economic and Financial Dialogue was launched to discuss payments modernisation, financial stability, fintech innovation, and the development of capital markets. The India-Canada CEO Forum was reconstituted, with political leaders encouraging it to be active and supportive of CEPA negotiations.
The second element concerns energy – creating a path for a comprehensive and expansive, mutually beneficial energy partnership. This will cover all relevant areas: clean energy and climate-related value chains, hydrogen, biofuels, battery storage, and the modernisation of electricity systems. Third was the reference to energy trade, covering liquefied natural gas (LNG), liquefied petroleum gas (LPG), crude oil, and refined petroleum products. The goal is to have Canadian and Indian companies step up energy trade, given their increasing needs and capabilities. The fourth element is cooperation on critical minerals. The commercial agreement for Canada to arrange a long-term supply of uranium, with a price tag reaching $1.9 billion, is truly consequential.
Technology is the fifth critical element of the revived bilateral. This encompasses the traditional sphere of science and technology, including space cooperation, but goes beyond to cover digital and AI cooperation. Canada has perhaps the world’s best AI education system, and they naturally played an active part in the AI Impact Summit. A specific decision by the two governments is to explore collaboration on AI-assisted tools to strengthen the diagnostic capabilities of distance medicine to assist people living in the remote regions of the two countries. This will be a boost to Canada also, which has not commercialised its AI education ecosystem, preferring to let Silicon Valley reap the benefits. With India as a partner, this can become a strong commercial connection over time.
The sixth element of cooperation is defence and security, which are designed and put in place with care. On defence, a new dialogue at the joint secretary level will be started soon, presumably to be elevated to higher levels later. Canada plans to invest heavily in defence to meet its NATO obligations and raise its defence expenditure, spending $500 billion on defence over the next decade. This offers attractive opportunities for India’s defence exports, including in co-production and co-development.
On the security plank, the situation is evolving, with a somewhat complex and multi-layered arrangement put in place through the security and enforcement dialogue, the counter-terrorism dialogue, and the consular dialogue. At the Ministry of External Affairs briefing on 2 March, several questions were put to P. Kumaran, Secretary (East), triggered by reports in the Canadian press indicating that some Canadian officials still maintain that India has been involved in “transnational repression”. The Indian official rejected such allegations as “baseless, politically motivated, and unsupported by credible evidence”. Both governments, it seems, are ready to manage this subject within the newly created dialogue mechanisms and avoid “public and politicised narratives”.
Finally, special emphasis has been laid on strengthening the people-to-people connection. There was agreement that “closer collaboration in culture, heritage and creative industries will further enrich bilateral ties”, as the joint statement put it. However, a mounting concern is the presence of 400,000 Indian students in Canada, a figure twice that in the US and four times that in the UK. With Canada set to tighten its immigration regulations and restrict the number of foreign citizens who secure jobs and status as immigrants, the massive Indian student population in Canada could face serious difficulties.
These collaborations show that the gap in India-Canada relations is being assiduously closed. Following months of challenging work by officials and ministers, and in the wake of the changed geopolitical situation, the two governments find themselves largely on the same page. By including more stakeholders in the agreements, they hope to ensure the bilateral does not drift away again.
Rajiv Bhatia is the Distinguished Fellow for Foreign Policy Studies and a former ambassador.
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