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India-Canada Diplomatic Reset: Modi and Carney Pave Way for Trade Talks

India, Canada Resume Diplomatic Ties, Eye Trade Revival

Arti Bali by Arti Bali
18 June 2025
in Geopolitics
PM Modi's visit may propel for India-Canada FTA

Canada PM Mark Carney will prefer to handle Khalistan issue diplomatically

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After two years of tensions, India and Canada have finally agreed to restore high commissioners in Delhi and Ottawa — a move that signals a potential shift in their strained relationship. Both sides have agreed to resume diplomatic ties and explore areas of cooperation.

Relations between the two nations plunged to historic lows in 2023 during G20 summit in New Delhi after Canadian Prime Minister Justin Trudeau accused Indian officials of being involved in the killing of Khalistani separatist Hardeep Singh Nijjar. The Trudeau government alleged that India orchestrated the killing, while India denied the claims and, in turn, accused Canada of failing to protect Indian diplomats from Khalistani threats.The diplomatic fallout led to visa suspensions, mutual expulsions of diplomats, and a freeze in trade negotiations.

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This breakthrough came during prime Minister Narendra Modi’s discussions with Canada ‘s newly elected Prime Minister Mark Carney on the side-lines of the G7-outreach session in Kananaskis, where India was a special invitee.

Modi and Carney reaffirmed their commitment to shared democratic values and sovereignty, and agreed to restore normal diplomatic presence, including the early return of High Commissioners to each other’s capitals, as per the PMO statement.

Both sides underscored the need to resume negotiations on the Early Progress Trade Agreement (EPTA) and take it forward with the objective of concluding a broader Comprehensive Economic Partnership Agreement (CEPA), as per a press note issued by the Prime Minister’s Office (PMO).

“The Prime Ministers agreed to take calibrated steps to restore stability to this very important relationship. The first of these steps agreed upon was to restore high commissioners to each other’s capitals at an early date,” Foreign Secretary Vikram Misri announced after the meeting.

Misri also informed that working level mechanisms in a host of areas related to trade, people to people contact, and connectivity” has also been resumed.

Restarting stalled talks on Trade Agreement

The two sides also committed to restarting stalled talks on the Early Progress Trade Agreement (EPTA), aiming ultimately for a Comprehensive Economic Partnership Agreement (CEPA). Visa services, mobility partnerships, and dialogue mechanisms in sectors like clean energy, digital transition, and critical minerals are also back on the table.

In addition, the two Prime Ministers discussed collaborations in “clean energy, digital transformation, artificial intelligence, LNG, food security, critical minerals, higher education, mobility, and supply chain resilience”, a statement by the Ministry of External Affairs said.

A statement from India’s Ministry of External Affairs said discussions included cooperation in AI, LNG, food security, education, and supply chain resilience.

Prime Minister Carney brought transnational repression (TNR) up during talks and reiterated it in a statement, referring to concerns over foreign governments harassing dissidents and diaspora groups abroad.

In a G7 statement on TNR, member countries condemned state-linked violence and harassment targeting journalists, religious minorities, and political dissidents. While the U.S. and some European allies have raised similar concerns with India, Canada has taken the lead in linking it directly to the Nijjar case.

The diplomatic spat last year led to India halting visa services for Canadians and drastically reducing Canadian diplomatic staff in India. In retaliation, Ottawa expelled Indian High Commissioner Sanjay Kumar Verma and several other diplomats. India responded by expelling six Canadian diplomats and accusing Canada of backing violent separatist elements.

Prime Minister Carney and Prime Minister Modi reaffirmed the importance of Canada-India ties, based upon mutual respect, the rule of law, and a commitment to the principle of sovereignty and territorial integrity. The leaders agreed to designate new high commissioners, with a view to returning to regular services to citizens and businesses in both countries.

“They discussed strong and historic ties between our peoples, partnerships in the Indo-Pacific, and significant commercial links between Canada and India – including partnerships in economic growth, supply chains, and the energy transformation. Prime Minister Carney raised priorities on the G7 agenda, including transnational crime and repression, security, and the rules-based order,” a statement from the Canadian Prime Minister’s Office said.

 

 

Tags: Comprehensive Economic Partnership (CEPA)Early Progress Trade Agreement (EPTA)Hardeep Singh Nijjar controversyIndia Canada trade agreementIndia-Canada diplomatic relationsMark Carney Narendra Modi meeting
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