New Delhi: In a significant diplomatic breakthrough, India and Canada have agreed to restore their High Commissioners and resume trade talks, signaling a thaw in bilateral relations that hit rock bottom in 2024. This development follows a pivotal meeting between Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney on the sidelines of the G7 Summit in Kananaskis, Alberta, on June 17, 2025. The meeting marks the first substantive engagement between the two nations’ leaders since a tense encounter at the G20 Summit in New Delhi in 2023.
Historical Context of India-Canada Relations
India and Canada share a relationship rooted in shared democratic values, cultural diversity, and strong people-to-people ties. These ties have been bolstered by economic engagement, consular agreements, and cooperation in science and technology. However, the relationship faced significant strain in 2024 due to allegations and counter-allegations related to Khalistani extremism and the killing of a Sikh separatist leader in Canada. The recent meeting between Modi and Carney, described as “positive and constructive” by Indian Foreign Secretary Vikram Misri, marks a calibrated step toward restoring stability to this “very important relationship.”
Shared Values and People-to-People Ties
The foundation of India-Canada relations lies in shared values such as democracy, the rule of law, and respect for cultural diversity. These commonalities have fostered long-standing people-to-people connections, particularly through the Indian diaspora in Canada, which numbers over a million and plays a significant role in strengthening bilateral ties. Both nations have emphasized their commitment to sovereignty, territorial integrity, and a rules-based international order, as highlighted in statements from both the Indian Ministry of External Affairs and the Canadian Prime Minister’s Office.
Economic Engagement
Economic ties between India and Canada have grown steadily over the years. In 2023, India’s exports to Canada were valued at USD 7.53 billion, while imports from Canada stood at CAD 5.12 billion. These figures reflect a robust trade relationship with potential for further growth. The Modi-Carney meeting emphasized the importance of restarting negotiations on the Early Progress Trade Agreement (EPTA) and paving the way for a Comprehensive Economic Partnership Agreement (CEPA). Both leaders instructed their officials to resume these talks at an early date, signaling a commitment to enhancing economic cooperation.
Consular and Legal Cooperation
India and Canada have a history of consular cooperation, underpinned by agreements such as the Mutual Legal Assistance Treaty signed in 1994 and the Extradition Treaty signed in 1987. These treaties have facilitated collaboration on legal and security matters, although challenges remain, particularly regarding India’s extradition requests for individuals it considers terrorists residing in Canada.
Science, Technology, and Nuclear Cooperation
Collaboration in science and technology has been a cornerstone of India-Canada relations. The two countries have worked together in fields such as Polar and Arctic studies, sustainable fuels, and space exploration. A notable milestone was the Indian Space Research Organisation (ISRO) launching Canada’s first Low Earth Orbit (LEO) satellite during the 100th Polar Satellite Launch Vehicle (PSLV) mission in 2018. Additionally, a Nuclear Cooperation Agreement (NCA) signed in 2010, which came into force in 2013, has facilitated civil nuclear cooperation, further strengthening bilateral ties.
The Modi-Carney Meeting: A Turning Point
The meeting between Prime Minister Narendra Modi and Prime Minister Mark Carney on June 17, 2025, at the G7 Summit in Kananaskis, Alberta, was a pivotal moment for India-Canada relations. Modi, attending the G7 as a special invitee, accepted Carney’s invitation just a week prior, indicating a willingness to mend ties. The Canadian Prime Minister’s Office described the discussion as reaffirming the importance of Canada-India ties based on mutual respect, the rule of law, and a commitment to sovereignty and territorial integrity.
Key Outcomes of the Meeting
- Restoration of High Commissioners: Both leaders agreed to designate new High Commissioners to each other’s capitals, with appointments expected to be processed as early as July 2025. India has nominated its Ambassador to Spain, Dinesh Patnaik, for the role in Ottawa. This move is the first in a series of “calibrated steps” to restore diplomatic stability, as stated by Foreign Secretary Vikram Misri.
- Resumption of Trade Talks: The leaders decided to revive negotiations on the EPTA, which had been paused due to diplomatic tensions. This step is seen as a precursor to a broader CEPA, aimed at deepening economic ties. Officials from both sides have been tasked with engaging further to advance these discussions.
- Collaboration in Emerging Sectors: The meeting highlighted opportunities for future collaboration in areas such as clean energy, digital transformation, artificial intelligence, liquefied natural gas (LNG), food security, critical minerals, higher education, mobility, and supply chain resilience. These sectors reflect the shared priorities of both nations in addressing global challenges.
- Commitment to a Free and Open Indo-Pacific: Both leaders reaffirmed their shared interest in promoting a free and open Indo-Pacific, aligning with their broader strategic goals of regional stability and security.
- Restoration of Diplomatic Mechanisms: The two Prime Ministers agreed to resume senior and working-level mechanisms to enhance cooperation in trade, people-to-people contact, and connectivity. These mechanisms are intended to bring greater momentum to the bilateral relationship.
Statements from Both Sides
Indian Foreign Secretary Vikram Misri emphasized the importance of the India-Canada relationship, stating, “The meeting discussed the importance of the India-Canada relationship, which is based on shared values, democracy, and the rule of law, people-to-people contact, and many other commonalities.” He assured that additional diplomatic steps would follow to further restore relations.
The Canadian statement echoed this sentiment, noting that the leaders had agreed to designate new High Commissioners to resume regular consular services for citizens and businesses. Prime Minister Carney also raised G7 priorities, including transnational crime and repression, security, and the rules-based order, though he refrained from commenting on ongoing judicial processes related to past allegations.
Factors Behind the Fallout in 2024
The diplomatic thaw in 2025 comes after a tumultuous period in India-Canada relations, primarily due to the following issues:
Khalistani Extremism
A significant point of contention has been Canada’s perceived tolerance of Khalistani separatist elements, which India views as a threat to its sovereignty. In 2023, an unofficial referendum on forming an independent Sikh state took place in Canada, organized by groups like Sikhs for Justice, a pro-Khalistani organization banned as a terrorist group in India. India has repeatedly raised concerns about Canada’s inaction against such activities.
Diplomatic Tensions Over Nijjar Killing
The killing of Hardeep Singh Nijjar, a pro-Khalistan separatist declared a terrorist by India, in Canada in 2023, escalated tensions. The then-Canadian Prime Minister Justin Trudeau publicly accused Indian government agents of orchestrating the killing, an allegation India strongly denied. In October 2024, Canada expelled Indian High Commissioner Sanjay Kumar Verma and five other diplomats, labeling them “persons of interest” in the Nijjar case. India retaliated by expelling six Canadian diplomats and accused Canada of supporting “extremism, violence, and separatism against India.” This tit-for-tat escalation led to a suspension of visa services for Canadians and a significant reduction in diplomatic presence.
Security Cooperation Challenges
India has expressed frustration over Canada’s unresponsiveness to its extradition requests for individuals it considers terrorists residing in Canada. Additionally, a Canadian Security Intelligence Service report, set to be released on June 18, 2025, alleges that links between the Indian government and the Nijjar murder signal a “significant escalation of India’s repression efforts against the Khalistan movement.” Such claims, reported by The Globe and Mail, indicate that the issue could continue to impact bilateral ties.
Allegations of Transnational Repression
Canada has raised concerns about “transnational repression,” a term used to describe foreign interference and intimidation of dissidents, journalists, and diaspora communities. A G7 joint statement issued during the summit condemned such activities, though it did not explicitly name India. The Canadian Prime Minister’s Office noted that Carney discussed these issues during the meeting, suggesting that Canada continues to view this as a point of contention.
The Path Forward
The Modi-Carney meeting represents a significant step toward resetting India-Canada relations. The restoration of High Commissioners, resumption of trade talks, and renewed focus on collaboration in emerging sectors signal a mutual desire to move beyond past tensions. However, challenges remain, particularly regarding the ongoing Canadian investigation into the Nijjar killing and India’s concerns about Khalistani activities in Canada.
India’s Perspective
Indian officials have been cautious not to let the Khalistan issue overshadow the diplomatic thaw. While Modi did not explicitly raise the issue during the meeting, India’s grievances about Canada’s tolerance of separatist activities remain a key concern. The appointment of Dinesh Patnaik as India’s nominee for High Commissioner indicates New Delhi’s commitment to restoring diplomatic channels.
Canada’s Perspective
Prime Minister Carney’s emphasis on transnational crime and repression reflects Canada’s ongoing concerns about alleged Indian interference. However, his decision not to comment on the judicial process related to the Nijjar case suggests a desire to avoid further escalation. The absence of photos with Modi on Carney’s official X account, unlike with other world leaders, may indicate a cautious approach to publicizing the meeting.
Regional and Global Implications
The restoration of India-Canada ties has broader implications for the Indo-Pacific region and global diplomacy. Both nations share an interest in promoting a free and open Indo-Pacific, and their collaboration in areas like clean energy and critical minerals aligns with global efforts to address climate change and supply chain challenges. The G7 Summit’s focus on transnational repression and security underscores the importance of a rules-based international order, which both India and Canada support.
Conclusion
The agreement to restore High Commissioners and resume trade talks marks a new chapter in India-Canada relations. After a challenging period marked by diplomatic expulsions and allegations, the Modi-Carney meeting on June 17, 2025, has laid the groundwork for a calibrated restoration of ties. By focusing on shared values, economic opportunities, and strategic priorities, both nations are signaling their intent to rebuild a stable and productive relationship. As they navigate lingering challenges, including the Nijjar case and concerns about Khalistani extremism, the commitment to dialogue and cooperation offers hope for a stronger partnership in the years ahead.
Frequently Asked Questions (FAQs)
1.What was the significance of the Modi-Carney meeting at the G7 Summit in 2025?
The meeting between Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney on June 17, 2025, at the G7 Summit in Kananaskis, Alberta, marked a pivotal step toward restoring India-Canada bilateral relations. Described as “positive and constructive,” it led to agreements to restore High Commissioners, resume trade talks, and enhance cooperation in areas like clean energy, digital transformation, and supply chain resilience. This was the first substantive engagement since tensions escalated in 2023 over the killing of Khalistani separatist Hardeep Singh Nijjar.
2.Why did India-Canada relations deteriorate in 2024?
Relations hit rock bottom in 2024 due to allegations by Canada, under then-Prime Minister Justin Trudeau, that Indian government agents were involved in the killing of Hardeep Singh Nijjar, a pro-Khalistan separatist declared a terrorist by India. Canada expelled Indian High Commissioner Sanjay Kumar Verma and five diplomats, while India retaliated by expelling six Canadian diplomats. India also accused Canada of supporting Khalistani extremism and failing to act on extradition requests, leading to a suspension of visa services.
3.What steps were agreed upon to restore India-Canada diplomatic ties?
During the Modi-Carney meeting, both leaders agreed to designate new High Commissioners to each other’s capitals, with appointments expected by July 2025. They also committed to resuming stalled trade negotiations, including the Early Progress Trade Agreement (EPTA), and restoring senior and working-level mechanisms to enhance cooperation in trade, people-to-people contact, and connectivity.
4.What are the key areas of collaboration discussed between India and Canada?
The leaders discussed collaboration in emerging sectors such as clean energy, digital transformation, artificial intelligence, liquefied natural gas (LNG), food security, critical minerals, higher education, mobility, and supply chain resilience. They also reaffirmed their shared interest in promoting a free and open Indo-Pacific, aligning with broader strategic goals.
5.What challenges remain in India-Canada relations?
Despite the diplomatic thaw, challenges persist, including Canada’s concerns about alleged Indian involvement in the Nijjar killing and “transnational repression,” as highlighted in a Canadian Security Intelligence Service report. India, meanwhile, remains frustrated with Canada’s perceived tolerance of Khalistani separatist activities, such as the 2023 unofficial referendum on an independent Sikh state. Navigating these issues, alongside the ongoing Canadian investigation into the Nijjar case, will be critical to sustaining the momentum of restored ties.
