Among Donald Trump’s many unintended achievements during his first hundred days back in the Oval Office, one stands out north of the 49th parallel: He has given a leg up to Mark Carney, a political neophyte, to coast to a miraculous near-majority victory in Canadian polls on Monday. The Liberals were trailing the Conservatives by 25 points in opinion polls in November thanks to former Prime Minister Justin Trudeau’s unpopularity, but the emergence of an existential Trump challenge made Canadians turn to Carney as the caped saviour with the economic wand.
Carney, once governor of the Bank of Canada and later the Bank of England, now assumes leadership at a moment of rare peril and opportunity for Canada. America’s renewed belligerence on trade under Trump — the reimposition of steep tariffs on Canadian goods coupled with repeated threats to make it America’s 51st state — leaves Ottawa little choice but to urgently diversify its economic and diplomatic partnerships. Europe will be a natural, if limited, hedge, and relations with China will remain challenging. But an early and vital opportunity lies elsewhere: India.
It is here that Prime Minister Carney must move quickly and with dexterity, to repair a relationship that, while commercially buoyant, has been politically frozen since 2023. The genesis of the freeze is well known. In September 2023, then-PM Trudeau accused India’s government of involvement in the killing of a Canadian citizen and Khalistani separatist, Hardeep Singh Nijjar. The allegation ignited an unprecedented diplomatic firestorm — the suspension of trade talks, mutual expulsions of diplomats and the near-total collapse of bilateral engagement.
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Yet, fortuitously, commerce thrived. Canadian pension funds and other institutional investors quietly expanded their holdings in India, which now approach $100 billion. Bilateral trade grew steadily. Beneath the political frost, economic interests continued to flow — a testament to the resilience of the relationship, but also to its unrealized potential. The imperative now is to align political engagement with economic and geopolitical realities.
Carney’s ascendancy is itself a reflection of how deeply these pressures have reshaped Canadian politics. Trudeau’s tenure ended in acrimony, hastened by the sudden resignation of Deputy PM Chrystia Freeland late last year. Liberal fortunes, once in free fall, revived under Carney’s stewardship and the threat of Trump’s tariff aggression, culminating in a convincing electoral triumph.
This realignment at home offers Carney both a mandate and a narrow window. Canadian public opinion, still bruised by the Nijjar affair, remains somewhat wary of any rapprochement with India. In Delhi, the scars of what is seen as an inexplicable indulgence of separatist sympathies have not healed either. Bridging this divide will require political imagination — and a very clear-eyed sense of both countries’ interests.
Encouragingly, green shoots of diplomatic stabilisation are already visible. Carney’s remarks on the campaign trail, pledging to “rebuild Canada–India ties”, were notable not merely for their content but for their timing. Delivered days before the election, they suggest a recognition that the relationship with India is not optional, but strategic.
PM Modi tweeted his welcome to Carney shortly after his victory speech on Monday, signaling India’s willingness to work together to “strengthen our partnership”. Leveraging this momentum, senior diplomats should be posted as high commissioners in the two capitals as early as possible. Formalising these postings would signal a readiness to address outstanding issues and turn the page. Also, both sides must build on the recent and ongoing dialogue between respective security officials and foreign ministries.
The G7 Summit in Canada this June offers a unique and timely opportunity which must be seized. Inviting India for outreach sessions, as part of an expanded Indo-Pacific agenda, would signal Canada’s willingness to engage with India in the even wider context of consulting with emerging economies.
Too often, Canada–India economic discussions have focused narrowly on discrete trade irritants or stalled trade deals. A fresh approach is needed — one that emphasizes broader economic partnership rather than individual transactions. Negotiations for a limited trade agreement — which had seen meaningful progress before the diplomatic rupture — should be resumed, but with ambitious adjustments to address the urgent need to further diversity trade efforts.
Beyond the restoration of basic diplomatic niceties, a broader vision beckons. Recent proposals from think tanks in both countries offer a credible starting point. They include: Full restoration of diplomatic representation; a firewall insulating law enforcement cooperation from political turbulence; regular NSA-level security dialogues to manage security irritants; pushing forward while expanding the paused trade agreement and reviving conversation on an investment treaty; launching a “green strategic partnership,” modelled on India’s pact with Denmark, to promote clean technology and energy transition; deepening educational linkages, including new partnering opportunities for universities, and establishing Canadian university campuses in India; strengthening subnational ties, particularly with Punjab, to channel grievances into constructive engagement; clear protocols for handling sovereignty disputes and political provocations.
Such a comprehensive approach would not merely repair relations — it could future-proof them.
The moment, however, is fraught. Diaspora politics have become a central irritant. There must be an unwavering commitment to opposing violent extremism in any form, while simultaneously protecting legitimate freedom of expression. In India, memories of diplomatic affront remain raw. The Indian suspicion that Canada tolerates — even abets — separatist activism is unlikely to evaporate soon. On its part, Canada will expect candid security conversations given events of the past couple of years. Both will expect concrete measures, not merely rhetorical reassurances.
Moreover, external forces could intrude. Trump’s instincts toward transactional diplomacy and his open disdain for multilateralism create new uncertainties. Canada’s potential embrace of India must be seen as part of a wider strategy to hedge against an unpredictable Washington — and a more volatile Trumpian world.
Yet the broader logic of renewed partnership is compelling. In an era of great-power rivalry and protectionist retrenchment, Canada and India share vital interests: Open trade, multilateral stability, and a free Indo-Pacific. The values of democracy and diversity are dear to both. Strengthened ties would not only serve bilateral prosperity but also reinforce the fabric of an international order that is visibly fraying.
This is Carney’s burden — and his opportunity. His background as a central banker has honed a temperament of caution and precision. Yet in foreign policy, particularly in moments of rupture, caution must sometimes yield to boldness. Restoring ties with India will require discretion, perseverance, and no small amount of political courage. It will require recognising that true sovereignty lies not in defensive postures but in confident engagement.
PM Carney has the mandate and the opportunity to reset India-Canada ties. It’s time to seize the moment.
Ajay Bisaria was high commissioner of India to Canada and Nadir Patel, high commissioner of Canada to India. The views expressed are personal
