India, Canada Strengthen Economic Partnership to Reset Bilateral Relations

India and Canada are taking significant steps to strengthen their economic partnership. This initiative comes in response to two years of strained bilateral relations, primarily influenced by political tensions. Recent discussions between Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney have laid the groundwork for a renewed collaboration.

Strengthening Economic Ties

During their recent talks, Modi announced plans for a “comprehensive economic partnership” aimed at boosting bilateral trade to $50 billion by 2030. The two countries began negotiations on a trade agreement last year and are pushing to finalize it by the end of this year. Carney stated, “This is not merely the renewal of a relationship. It is the expansion of a valued partnership with new ambition, focus, and foresight.”

Background on Recent Tensions

The relationship faced severe strain after Canada accused India of involvement in the killing of a Canadian Sikh activist in June 2023. India categorically denied these allegations and accused the previous Canadian government of supporting extremists linked to the Khalistan movement, which seeks an independent Sikh homeland and is banned in India. This fallout led to the expulsion of diplomats and the suspension of some visa services between the two countries.

Positive Developments

Relations began to improve when Carney invited Modi to the G7 summit in Alberta in June of last year. Following their recent discussions, both leaders signed a nuclear agreement allowing Canada to supply uranium to India. They also expressed intentions to enhance collaboration in defense industries and maritime security.