By: Gayathri Pramod, Research Analyst, GSDN

The India–Canada reset in relations represents one of the most consequential diplomatic recalibrations undertaken by New Delhi in recent years, striking a balance between pragmatism and cautious optimism. For decades, India and Canada have shared a robust partnership grounded in democratic ideals, parliamentary systems, economic complementarities, and deep-rooted people-to-people connections that have flourished across generations. According to the Ministry of External Affairs, bilateral engagement has historically rested on a framework that combines trade, education, scientific collaboration, and cultural exchanges. However, the crisis triggered by the killing of Hardeep Singh Nijjar in mid-2023 tested these pillars in unprecedented ways, causing a protracted freeze in high-level dialogue and a sharp deterioration of trust. New Delhi consistently rejected Canada’s “credible allegations” as unsubstantiated and politically motivated, emphasising in multiple official statements that India remained committed to addressing security concerns through lawful channels rather than what it described as public grandstanding.

Despite the turbulence, by early 2025, a combination of domestic political shifts in Ottawa and strategic compulsions in both capitals created conditions ripe for rapprochement. The arrival of Mark Carney as Canada’s new Governor of the Bank of Canada provided the first real opportunity to reset ties after nearly two years of strained relations. Carney’s pragmatic approach stood in stark contrast to the Trudeau era, with his administration signalling its readiness to compartmentalise individual legal proceedings from the broader strategic partnership. According to MEA press releases, India welcomed this shift, describing it as an “opportunity to restore momentum to a relationship of substantial promise.”

One of the first visible outcomes of the reset was the decision to fully restore diplomatic staffing at both High Commissions in New Delhi and Ottawa, which had been operating at reduced capacity since late 2023. Consular services, including visa processing for students, tourists, and business travellers, resumed within weeks of the Carney-Modi meeting on the sidelines of the 2025 G7 summit in Alberta. This development was particularly significant for the Indian diaspora in Canada, which at over 1.8 million strong represents one of the largest and most influential immigrant communities in the country. As noted in the MEA Annual Report 2024–25, restoring normal consular operations was a priority to minimize disruptions for families and businesses affected by the standoff. Beyond immediate normalisation, India and Canada have outlined an ambitious roadmap for future engagement that spans economic, technological, and security cooperation.

On trade, both sides agreed to revive negotiations toward the Comprehensive Economic Partnership Agreement (CEPA) and an interim Early Progress Trade Agreement (EPTA), with a stated goal of concluding at least the interim pact within a year. According to the Government of Canada, CEPA could unlock preferential access for Canadian exporters in sectors ranging from pulses, potash, and forestry products to advanced manufacturing and services. At the same time, Indian companies would benefit from reduced tariffs on textiles, pharmaceuticals, and IT services. The India–Canada CEO Forum, reconstituted after a hiatus, has been tasked with developing a roadmap to scale bilateral trade beyond USD 15 billion by 2030, focusing on key sectors and potential trade barriers.

The MEA has also emphasised that the new chapter in ties will involve closer cooperation on climate action, critical minerals, and the deployment of clean technology. India is looking to Canada as a partner in its National Green Hydrogen Mission, which aims to transform the country into a global hub for green hydrogen production and export. Canada, endowed with abundant reserves of lithium, cobalt, and rare earth elements, is eager to position itself as a reliable supplier to India’s booming battery and electric vehicle sectors. The two countries are also exploring joint ventures in grid modernisation and carbon capture, utilisation, and storage, areas where Canadian expertise aligns with India’s ambitious decarbonization targets under its updated Nationally Determined Contributions.

Security collaboration, which had nearly collapsed following the Nijjar crisis, is cautiously resuming through structured institutional mechanisms. As reported in The Hindu, the MEA and Canada’s Global Affairs have agreed to expand the annual Strategic Dialogue to include working groups on counter-terrorism financing, radicalisation prevention, and cybersecurity. A new track-1.5 dialogue involving senior security officials and think tanks is planned for early 2026 to deepen understanding of transnational extremism and strengthen legal cooperation. Canadian authorities, while maintaining that due process will continue in the Nijjar investigation, have signalled their readiness to clamp down on organisations that incite violence or promote secessionist propaganda. Indian diplomats have described this as an essential confidence-building step to insulate strategic engagement from domestic political pressures.

One area identified by the MEA as ripe for future collaboration is defence industrial cooperation. India has expressed interest in sourcing advanced simulation technologies, Arctic weather gear, and specialised aircraft components developed by Canadian firms. Canadian aerospace companies, in turn, are exploring opportunities in India’s rapidly expanding civil aviation market and defence modernisation programs. While no major defence deals have yet been finalised, the potential for collaboration in this area is significant, and both sides are expected to convene a dedicated Defence and Security Cooperation Working Group later in 2025, paving the way for a promising future.

People-to-people ties remain a robust foundation and a source of both opportunity and challenge. According to Statistics Canada, Indian immigrants are now Canada’s largest source of new permanent residents and students. In the wake of the reset, provincial governments, such as Ontario and British Columbia, are collaborating with the Indian High Commission to establish smoother pathways for academic mobility and professional accreditation, particularly in critical sectors like healthcare and engineering. The MEA has also emphasized the importance of safeguarding Indian students from fraudulent immigration consultants and ensuring that unscrupulous agents do not exploit labour mobility agreements. Looking ahead, the India–Canada reset is significant as it is poised to become a test case for how democratic countries can navigate disagreements while advancing shared interests in a multipolar world. Both nations are deeply committed to reforming global governance institutions to reflect contemporary realities better. India’s G20 presidency and Canada’s engagement in the G7 have provided platforms to align positions on inclusive digital transformation, sustainable finance, and resilient supply chains. The MEA has indicated that India expects Canada to be an important partner in championing reforms of the World Trade Organisation, democratisation of climate finance, and more representative frameworks for technology governance.

Perhaps most tellingly, senior Indian officials have consistently framed the reset not as a return to status quo ante but as an opportunity to define a more mature, resilient partnership built on clarity of red lines and mutual respect. As stated in the MEA briefing, “India remains committed to engaging constructively with Canada based on sovereign equality, non-interference, and shared values.” This commitment will likely be tested as the Nijjar investigation continues and as both societies grapple with the challenge of managing diaspora politics without undermining national security. Nevertheless, the Carney-Modi dialogue has already produced measurable dividends—complete restoration of diplomatic channels, resumption of trade negotiations, incremental intelligence cooperation, and a roadmap for expanding clean energy and innovation partnerships. Over the next decade, India and Canada have the potential to redefine their engagement through sustained high-level exchanges, deeper business integration, and a clearer understanding of each other’s domestic constraints. If this reset is grounded in consistent policy and mutual accountability, it could become a model for other democracies seeking to reconcile their strategic ambitions with the realities of complex, pluralistic societies.

 It is essential to examine the future of India-Canada relations through the lens of strategic, cultural, and economic dimensions, with a significant emphasis on defence cooperation. Despite recent tensions and diplomatic standoffs that have periodically strained bilateral ties, the underlying imperatives driving mutual engagement suggest that both countries have strong incentives to recalibrate and deepen their relationship. The socio-political landscapes of both nations are evolving, shaped by internal pressures, diaspora dynamics, and global strategic realignments. While current diplomatic frictions—particularly over politically sensitive issues involving diaspora activism and allegations of interference—have impeded progress, these appear to be temporary setbacks in a broader context marked by potential for long-term collaboration. The future relationship will likely be shaped not only by government-to-government negotiations, but also by deeper, multifaceted linkages in trade, people-to-people contact, cultural exchanges, technological cooperation, and, increasingly, defence partnerships. In terms of defence and strategic affairs, a convergence of interests is emerging.

India’s growing emphasis on self-reliance in defence manufacturing (Atmanirbhar Bharat) aligns well with Canada’s advanced technological capabilities and innovation ecosystem. As global threats become more transnational—ranging from cyber warfare to climate-related security risks—there is scope for increased collaboration in intelligence sharing, maritime security, cybersecurity frameworks, and peacekeeping operations. Canada’s status as a NATO member and its increasing participation in Indo-Pacific dialogues position it as a valuable partner in India’s Act East policy and broader regional strategic outlook. Although Canada has traditionally maintained a restrained defence posture in the Indo-Pacific, pressures from allies such as the United States, Australia, and Japan may compel it to take a more proactive role, one where India could emerge as a critical strategic interlocutor. The future could witness joint training exercises, strategic dialogues, and the establishment of formal defence mechanisms, especially as both countries seek to counterbalance Chinese assertiveness in the Indo-Pacific and uphold the rules-based international order.

Cultural ties will continue to serve as a resilient foundation of bilateral relations, mainly due to the significant Indian diaspora in Canada, which is one of the largest globally. This community not only contributes to the economic and political fabric of Canada but also acts as a bridge for cultural understanding, educational exchanges, and soft power diplomacy. Over time, cultural diplomacy is likely to assume a more formalised role, with expanded programs in language, cinema, art, and education. India’s soft power—manifested through Bollywood, yoga, cuisine, and festivals—resonates strongly within Canada’s multicultural ethos. Universities and academic institutions from both countries have the potential to become platforms for shared innovation and global research, particularly in fields such as clean energy, artificial intelligence, and public health. These cultural and educational ties may help to soften political differences, fostering greater understanding and reducing the friction caused by conflicting domestic narratives. Economically, both countries have strong incentives to revitalise trade and investment ties. While a Comprehensive Economic Partnership Agreement (CEPA) has remained elusive for years, the urgency of diversifying global trade relationships in a post-pandemic world may revive negotiations. Canada’s vast reserves of critical minerals and clean energy resources are of particular interest to India’s burgeoning technological and manufacturing sectors.

Meanwhile, India’s massive consumer base and digital economy offer Canadian firms access to one of the fastest-growing markets in the world. Strategic investments in sectors such as agriculture, information technology, and green energy could be mutually beneficial, supported by regulatory harmonisation and visa facilitation. The evolution of this economic partnership will depend mainly on political will and the ability to compartmentalise differences on sensitive issues while advancing mutually beneficial areas of cooperation.

Furthermore, multilateralism could become a key area of cooperation, particularly in the context of global governance reforms, climate change, and global health resilience. Both countries, as democratic nations with pluralistic values, have overlapping interests in preserving an open international system. Canada’s advocacy for human rights and inclusive governance, when expressed with diplomatic sensitivity, can find resonance with India’s constitutional values, albeit with recognition of its unique socio-political context. In terms of climate cooperation, Canada’s experience with carbon pricing and sustainable infrastructure could complement India’s ambitious renewable energy goals. Engagement in forums such as the G20, the Commonwealth, and the United Nations provides further avenues for alignment on global challenges, particularly as both nations increasingly recognise the importance of South-South cooperation and equitable development.

However, the relationship will not be without its challenges. Political rhetoric, fuelled by domestic electoral considerations in both countries, can hinder diplomatic progress. Diaspora politics, especially when it intersects with separatist movements or perceived interference in domestic affairs, will continue to be a recurring flashpoint. However, the maturity of the relationship will be tested not by the absence of conflict but by the capacity to manage disagreement through institutional mechanisms, dialogue, and mutual respect. Canada’s evolving understanding of India’s strategic sensitivities and India’s appreciation of the complexities of liberal democracies will be crucial in navigating contentious issues. Over time, both nations may develop a more pragmatic approach—one that allows for disagreements without derailing cooperation in other domains.

While India-Canada relations are presently navigating a complex phase, the long-term forecast remains cautiously optimistic. Defence cooperation stands poised to become a new pillar, supported by shared concerns over regional stability and global security. Cultural linkages and diaspora relations will continue to serve as a deep connective tissue, offering resilience even during diplomatic downturns. Economic complementarities and multilateral engagements offer rich opportunities for constructive collaboration. The future relationship will not be linear nor devoid of challenges, but it will likely be defined by increasing interdependence, strategic dialogue, and a maturing understanding of each other’s priorities. As both nations seek to assert themselves in an increasingly multipolar world, their relationship—if anchored in pragmatism and mutual respect—could evolve into a comprehensive partnership that contributes meaningfully to global peace, prosperity, and democratic resilience.