India–Canada relations were strained during 2022–24 due to diplomatic tensions over the Khalistan issue. However, 2025 signals a reset, as Canada seeks to diversify beyond overdependence on the U.S. and China, viewing India as a key strategic partner.
Background: The Period of Tension (2022–2024)
- The Nijjar Issue: Relations were severely strained due to the activities of Khalistani extremists, specifically the assassination of Hardeep Singh Nijjar in Canada.
- Diplomatic Fallout: Canadian Prime Minister Justin Trudeau accused India of involvement in the killing during a parliamentary session.
- This led to both nations recalling their High Commissioners and a significant bitterness in bilateral ties.
The Turning Point
- Leadership Change: A major shift occurred after Justin Trudeau lost the election and Mark Carney became the new Prime Minister.
- High-Level Engagement: Before Carney’s visit to India, the Indian National Security Advisor, Ajit Doval, visited Canada to pave the way for reconciliation.
Strategic and Geopolitical Drivers for Reconnection
- US Unpredictability: Canada seeks to diversify partnerships as reliance on the United States appears risky amid fluctuating political leadership and policies.
- China Factor: Strained relations with China have pushed Canada toward a “US Plus One” strategy, engaging dependable middle powers like India for economic and strategic balance.
- Variable Geometrics: The relationship is shifting from rigid alliances to issue-based cooperation, enabling collaboration in areas such as green energy, trade, and technology despite political differences on issues like Khalistan.
Economic and Infrastructure Partnership
- Pension Fund Investments: Nine of Canada’s top pension funds have invested $110 billion in Indian infrastructure, including highways and solar plants, providing stable, long-term capital for India while ensuring steady returns for Canadian retirees.
- Trade Targets: The two nations aim to sign a Comprehensive Economic Partnership Agreement (CEPA) with a target of $70 billion in trade by 2030.
- Techno-Economy Shift: The trade relationship is evolving from a focus on basic commodities (pulses/potash from Canada and pharmaceuticals from India) to a sophisticated techno-economic partnership.
Key Initiatives and Agreements
- Nuclear Energy: A $2.6 billion deal was signed for Canada to provide 22 million pounds of Uranium to India between 2027 and 2035 to support clean energy goals.
- Critical Minerals: India and Canada have partnered to ensure the supply of Lithium and Cobalt for electric vehicles, aiming to break China’s current monopoly in this sector.
- Education and Skill Sharing:
- Dalhousie University is building a joint campus with IITs and IISER Tirupati.
- The University of Toronto announced $100 million in scholarships.
- HCL Technologies has committed to hiring a Canadian workforce.
- Brain Circulation: There is a shift from Brain Drain to Brain Circulation, where Indian talent in Canada creates value and intellectual property for both nations.
Supply Chain and Regional Cooperation
- Resilient Supply Chains: Both countries are shifting from a “Just-in-Time” (efficiency-driven) model to a “Just-in-Case” (resilience-driven) approach to safeguard supply chains against global disruptions such as the Russia–Ukraine war.
- Indo-Pacific Cooperation: Canada’s engagement with the Indian Ocean Rim Association (IORA) and its trilateral cooperation with India and Australia reflect growing collaboration to promote stability, connectivity, and a rules-based order in the Indo-Pacific.
Conclusion
Amid intensifying US–China rivalry, India–Canada reset helps middle powers reduce dependence on great powers and build economic resilience.
- It also reflects India’s emerging role as an active shaper of the evolving global order.
4 Mar 2026
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