Mains: GS-II – Bilateral Relations
Why in News?
Canadian Prime Minister Mark Carney’s arrival in India will mark a significant moment for the bilateral relationship that has gone through an arc of downs and ups over the last two-and-half years.
What is the status of the India-Canada relationship?
- Background – The relations hit a low point in September 2023 after Canadian Prime Minister alleged Indian involvement in the killing of a Sikh separatist leader.
- Diplomatic tensions escalated, with expulsions of diplomats and stalled trade talks.
- Turning Point – Leadership Change in Canada - Mark Carney succeeded Trudeau as Prime Minister in 2025, signaling a fresh approach.
- Carney emphasized the importance of repairing ties with India, calling it a “turning point” for Canada’s foreign policy.
- Steps Toward Reconciliation
- High-Level Visits – Carney’s planned visit to India in March 2026 is seen as the highest-level engagement since ties cooled.
- Trade Reset – Canada is looking to expand trade with India, with discussions around a potential $50 billion reset in economic cooperation.
- Diplomatic Engagements – Indian External Affairs Minister and Canadian Foreign Minister have held multiple meetings since late 2025, signaling steady progress.
- Current Outlook – Both sides are working to rebuild trust and momentum, focusing on trade and investment, energy and technology partnerships and diaspora connections.
What are the key pillars of the India-Canada relationship?
- Historical Context
- Diplomatic relations – Canada and India share over 75 years of diplomatic relations and deep people-to-people ties.
- Strategic Partnership (2018) – Bilateral relations were formally designated as a “Strategic Partnership” in 2018, structured around Ministerial Dialogues on foreign policy, trade & investment, finance & energy.
- Working Groups (Officials Level) – Focus on counter-terrorism, security, agriculture, education, science and technology.
- Trade & Economic ties
- Trade Negotiations – At last year’s G20 Leaders’ Summit, Canada and India agreed to formally launch negotiations for an ambitious Comprehensive Economic Partnership Agreement to double two-way trade to $70 billion by 2030.
- Current Status – In 2024, India was Canada’s 7th largest goods and services trading partner, with two-way trade at $30.8 billion.
- Major exports to Canada – Pharmaceutical products, machinery parts and mechanical appliances, iron and steel products, electronic goods, organic chemicals, jewelry, gems, textile and seafood.
- India’s major imports – Pulses, fertilizers (potash) and minerals.
- Foreign Investment – According to the Department for Promotion of Industry and Internal Trade, Canada is the 17th largest foreign investor in India.
- Its cumulative investment of $4.18 billion from April 2000 to June 2025 represented 0.56% of the total FDI inflows into India.
- Security & Defence
- Global Security Cooperation – India and Canada have regularly engaged in dialogue and cooperation on global security issues, including counter-terrorism, cyber security and regional stability.
- Counter-Terrorism Framework (1997) – The Counter-terrorism engagement was largely taken place through the ‘Joint Working Group on Counter Terrorism’ set up in 1997.
- Enhanced Security Cooperation (2018) – In February 2018, both sides signed a framework on “Countering Terrorism and Violent Extremism.”
- This expanded collaboration beyond traditional counter-terrorism to address radicalization and extremism.
- Energy
- With Canada’s vast natural resources and India’s expanding energy demand, energy cooperation remains a key pillar of the bilateral relationship.
- The partnership encompasses both conventional and renewable sources, with Canada pitching itself as a reliable supplier of oil, gas, LNG, LPG, crude oil, and critical minerals.
- Education
- Indian Students in Canada – More than 3.92 lakh Indian students were studying in Canada (Dec 31, 2024), making Indian students represent the largest group of international students in Canada.
- The educational ties include institutional linkages, joint research programs and academic mobility initiatives.
- Both countries have long recognised the strategic significance of higher education and research.
- Diaspora
- With over 1.8 million Indo-Canadians and approximately a million non-resident Indians, Canada is home to one of the largest and most vibrant Indian diasporas in the world.
- Indo-Canadians have had a profound impact across a wide range of sectors, and their influence continues to grow.
- Immigration & Student Presence – India is Canada’s largest source country for immigration categories, including 392,810 study permit holders in 2024.
- As of the 2021 federal census, there are more than 1.8 million Canadians of Indian origin.
- Geopolitics
- Strategic partner in West – Canada is an important strategic partner for major western powers — it is part of the G7 grouping and shares the table with the US, UK, Germany, France, Italy, and Japan.
- Intelligence Sharing – It also shares intelligence with the Five Eyes grouping which also includes the US, the UK, Australia and New Zealand.
- All these countries are also close strategic partners for India.
- Trilateral Technology and Innovation Partnership – On the margins of the G20 Leaders’ Summit, Canada, India, and Australia launched a trilateral initiative to deepen collaboration in critical and emerging technologies and diversify supply chains for a secure, sustainable, and resilient future.
- Views about pro-Khalistan elements
- Pro-Khalistan Elements in Canada – Diplomats note that pro-Khalistan groups represent only a small minority within the Canadian Sikh community.
- Scale of Radical Influence – Of approximately 20 lakh Indian diaspora members, about 8 lakh are Sikhs, and only around 1% (8,000–9,000 individuals) are estimated to be pro-Khalistan radicals.
- Control of Religious Institutions – Despite their small numbers, these groups exert influence by controlling 12–15 gurdwaras, using them for fundraising and political organization.
- – Their influence is concentrated in constituencies such as Brampton (Ontario), Vancouver, and Surrey (British Columbia).
What are the challenges in India-Canada relations?
- The Khalistan Issue – While both governments are working to "decouple" this issue from broader ties, it remains a point of sensitivity, particularly within Canada's domestic political landscape.
- Immigration Tensions – Despite the reset, some friction persists in the education sector; reports from late 2025 indicated high rejection rates (up to 80%) for Indian student visa applications.
- Foreign Interference Allegations – A 2025 Canadian inquiry into foreign interference cited India as an active participant, a claim New Delhi has consistently rejected.
What lies ahead?
- Canada-India ties have faced several challenges and missed opportunities for deeper co-operation.
- Yet they are underpinned by numerous factors that make them natural partners — especially given their alignment of interests and values in fostering innovation, prosperity, and a free and open Indo-Pacific, particularly amid geopolitical volatilities.
- Moving forward, a clear roadmap is needed to foster resilience in the relationship despite these challenges.
Reference
Indian Express | How India and Canada mended their frayed ties?
