Both sides are set to boost trade links and repair ties further following a fallout over the 2023 killing of a Sikh separatist, analysts say
Canada has positioned its talks with India as a key step in diversifying trade and reducing reliance on the US market.
“While underlying sensitivities linger in both countries, Indo-Canadian ties are too important to be in cold storage for too long,” said Uday Chandra, a political-science professor at Ashoka University in the Indian state of Haryana.
“Carney is pragmatic. The Modi regime is keen on a reset too.”
As middle powers, both nations shared similar views on the need for a more multipolar world, Chandra added.
Since taking office in March last year, Carney has made diversifying Canada’s global trade relationships a cornerstone of his economic agenda. In November, he met Modi on the sidelines of the G20 summit in South Africa., where both leaders agreed to work towards doubling two-way trade to C$70 billion (US$51 billion) by 2030.
“Both countries have strong incentives to revive trade talks. Canada seeks to diversify beyond the US market, while India is looking for stable markets, technology partnerships and reliable sources of energy and critical minerals,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
In 2024, trade in physical goods between Canada and India came to C$13.3 billion (US$9.7 billion), according to the most recent official figures from Ottawa.
“As the two economies trade largely in complementary goods rather than competing products, the relationship has strong growth potential and is unlikely to be disrupted by short-term political fluctuations,” Srivastava said.
India’s main exports to Canada included pharmaceuticals, gems and jewellery, textiles and machinery, while Canada primarily shipped timber, pulp and paper, and mining products, he added.
The two countries also have deep educational links, with more than 200 institutional partnerships and over 319,000 Indian students enrolled in Canadian universities.
Analysts say Carney’s visit could spur investment and cooperation in clean energy, agri-food trade, critical minerals, artificial intelligence and logistics.
Canada is expected to agree to supply India with uranium, liquefied natural gas and liquefied petroleum gas during the visit, according to media reports.
A uranium supply deal would enhance India’s energy security while giving Canada access to a major new market as it sought to diversify its energy exports, Srivastava said.
In December, India’s parliament approved legislation allowing domestic and foreign companies to build, own and operate nuclear power plants in the country.
Delhi has also concluded free trade agreements with the European Union, the United Kingdom, New Zealand and Oman in recent months.
Beyond trade, India is likely to seek deeper cooperation with Canada on intelligence sharing, extradition and counterterrorism, according to Chandra.
