A clean slate for India and Canada: Time to revive ties and reset strategy

In international relations, pauses have a value of their own. Be it misunderstanding, estrangement, skirmish or even a war, a temporary freeze can allow the much-needed legroom for countries to step back and reset. As Canadian Foreign Minister Anita Anand arrived in New Delhi for a three-day visit, it is precisely such a moment for India-Canada relations. Exactly a year ago, bilateral relations between the two democracies seemed more frayed than ever, even as Canada labelled Indian diplomats as “persons of interest” in a pro-Khalistan murder case, and India expelled Canadian diplomats.

Changes in both internal and external environment in Canada have contributed to this shift. In Canada, a change of guard from the Justin Trudeau government to the current Mark Carney has resulted in a welcome change in attitude. A key moment was the meeting between Prime Minister Narendra Modi and Mr Carney in June on the sidelines of the G7 leaders’ summit in Kananaskis. It was seen as the first opportunity for an offramp at the highest levels of both governments. The current visit marks a much-needed follow-up and may provide the moment for restoring trust.

A key moment was the meeting between Prime Minister Narendra Modi and Mr Carney in June on the sidelines of the G7 leaders’ summit in Kananaskis.

The external environment for both countries — but especially for Canada as the second-largest trade partner of the US — has changed considerably since the swearing-in of Donald Trump. The unpredictability that has ensued has left most countries scrambling for stability. For Canada though, the malaise is much deeper. It remains the only country outside of G7 that has not secured a trade deal with the United States. Mr Carney came to office with one of his key promises being the improvement of Canada’s economic situation, but Mr Trump’s onslaught has prevented a laissez-faire–driven trade and commerce environment. US tariffs on steel, autos and other sectors continue to hurt the Canadian economy. Add to that Mr Trump’s repeated calls about making Canada the 51 st state of the US.

In the most recent meeting between Mr Carney and Mr Trump, the second between the two leaders, Mr Trump squarely placed the US-Canada relationship between “natural conflict” and “mutual love”, hinting that the turmoil in bilateral relations is likely to continue. As such, Canada’s need for trade and security diversification cannot be overstated. Minister Anand’s visit to India will be followed by her visit to two other countries — Singapore and China — both critical to Canada’s bilateral as well as global trade. That India is her first stop underscores a sentiment in Ottawa to put the relationship back on track.

The Canadian foreign ministry has clarified that India and Canada are moving towards “establishing a framework for strategic cooperation on issues such as trade diversification, energy transformation, and security.” Ms Anand’s visit to Mumbai, as an important leg of her three-day visit, and her meeting with the Union Minister of Commerce and Industry underscore the economic imperative. Both India and Canada had bilateral trade nearing $10 billion in 2024, with potential to increase given the diaspora connections, cultural ties, and rising investments.

At the political level, Ms Anand’s meeting with External Affairs Minister S Jaishankar is an exercise in building trust — a work in progress since the two Prime Ministers met in Canada, followed by the meeting between the national security advisors of the two countries, where Ajit Doval met his counterpart Nathalie G Drouin. Subsequently, the appointment of new high commissioners by both countries marks a fresh start. While these steps will need to be sustained and properly guard-railed, momentum will be key. As countries seek opportunities amid the current flux in the world order, both India and Canada are positioned at the anticipatory curve of the next order.

Both India and Canada had bilateral trade nearing $10 billion in 2024, with potential to increase given the diaspora connections, cultural ties, and rising investments.

It is an opportunity for both India and Canada to make gains from the crisis that the world is going through by reaffirming trust in each other. For Canada, important steps towards containing domestic elements that fuel pro-Khalistan sentiments can go a long way in signalling trust positively with regard to security and sovereignty. The Canadian police’s arrest of three men including Inderjeet Singh Gosal, a key organiser for the US-based group Sikhs for Justice, was one such step. In the recent past, the rise in targeted shootings, vandalism, and arson against businesses associated with Indians or Indian-origin Canadians has been a concern that Canada needs to address.

For Canada, as for India, trade, energy, and security diversification is not a choice but an imperative. As Canada looks to India and other nodal countries such as Singapore and China, it would be keen to revive its dormant Indo-Pacific strategy. India’s centrality to the Indo-Pacific will continue to shape India-Canada bilateral engagement, even as the events of the last few years should have alerted both sides of the need to create a crisis management architecture to insulate the wider relationship from the occasional turbulence bound to arise between two nations so closely intertwined.

This commentary was originally appeared in Business Standard.

• International Affairs
• India
• USA and Canada
• bilateral trade
• diplomacy
• India-Canada relations
• Indo-Pacific
• Security
• strategic cooperation
• trade diversification
• trade diversification
• trust-building

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