India and Canada have agreed to strengthen their economic partnership, signalling an attempt to reset a relationship that had been badly strained for two years.
The Associated Press reported that Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney spoke after talks in New Delhi on Monday and said the two countries would soon finalize a comprehensive economic partnership. Modi said the deal is expected to increase bilateral trade to $50 billion by 2030. Carney said the goal was to conclude the agreement by the end of the year.
The move matters because the two governments have spent the past two years trying to recover from a diplomatic rupture. Relations worsened after Canadian authorities alleged India was involved in the killing of a Canadian Sikh activist near Vancouver in June 2023. New Delhi denied the allegation and accused Justin Trudeau’s government of harboring Sikh extremists linked to the Khalistan movement.
The fallout led to expulsions of senior diplomats and a suspension of some visa services. The AP said the relationship began to improve last year when Carney invited Modi to the G7 summit in Alberta. Monday’s announcement suggests both sides are now trying to move from crisis management to structured economic cooperation.
The package is not limited to trade. Modi said India and Canada also signed a nuclear agreement under which Canada will supply uranium to India. The two countries also plan to strengthen defense industries and maritime domain awareness, and officials exchanged memoranda of understanding covering critical minerals, energy and cultural cooperation.
Carney framed the talks in broader strategic terms, saying the relationship was not merely being renewed but expanded with new ambition, focus and foresight. That language suggests Ottawa wants a relationship built on more than a narrow diplomatic truce. It also reflects Canada’s broader push to diversify trade away from the United States, which Carney has tied to concerns about American tariffs and investment chills.
The AP report shows the political context remains sensitive, but the tone on both sides is clearly different from the period of open confrontation. Instead of public recrimination, the focus is now on practical agreements and a timeline for implementation.
What happens next will depend on whether negotiators can convert the political thaw into a signed deal by year-end. If they do, the partnership could become one of the most significant bilateral resets for Canada in the region. If they do not, the announcement will still stand as evidence that both governments believe the relationship is worth salvaging after a long and bitter freeze.
The deal also fits Carney’s wider effort to diversify Canadian trade and reduce dependence on the United States. If the partnership holds, it would give both governments a practical reason to keep rebuilding trust. If it stalls, the announcement would still mark the clearest sign yet that they want the relationship to move beyond the rupture of the past two years.
The practical question now is whether the promised economic partnership can survive the political memory of the 2023 allegations. The answer will shape not only trade but also the pace at which the two countries decide trust can be rebuilt.
