As Mark Carney leads Liberals to victory, what it means for India-Canada ties

With Mark Carney set to be back as Canada’s prime minister following a dramatic reversal of fortunes for the Liberals in the country’s federal elections, ties with India appear to be in for a reset after touching nadir under his predecessor Justin Trudeau.

Prime Minister Narendra Modi congratulated Carney and said that he was looking forward to unlocking greater opportunities for the people of the two nations. “Congratulations @MarkJCarney on your election as the Prime Minister of Canada and to the Liberal Party on their victory,” Modi said in a social media post.

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“India and Canada are bound by shared democratic values, a steadfast commitment to the rule of law, and vibrant people-to-people ties,” he said. “I look forward to working with you to strengthen our partnership and unlock greater opportunities for our people,” he added.

Keen on rebuilding ties

In the run-up to his campaign, Carney hinted more than once that rebuilding ties with India would be one of his priorities. He took time off his busy campaign to join the Hindu community in celebrating Ram Navami, signalling his resolve to mend fences with India.

He also said, “What Canada will be looking to do is to diversify our trading relationships with like-minded countries, and there are opportunities to rebuild the relationship with India. There needs to be a shared sense of values around that commercial relationship, and if I am Prime Minister, I look forward to the opportunity to build that,” he had said.

Having positioned himself as a bridge-builder, Carney has consistently stated that Canada needs commercial partnerships with shared democratic values and that India, despite recent frictions, remains an essential partner.

Carney described US President Donald Trump as a threat to Canadian autonomy, famously declaring, “Donald Trump wants to break us so America can own us.” In response, he pledged to diversify Canada’s trade relationships, specifically naming India as a key partner.

The Nijjar case & its fallout

India-Canada ties soured in 2023 following allegations by the Trudeau government implicating “Indian agents” in the killing of Hardeep Singh Nijjar, a Canadian citizen and a Khalistani terrorist, outside a gurdwara in Surrey, British Columbia, in June 2023.

However, India rejected any link to the killing of Nijjar, a designated terrorist by the National Investigation Agency (NIA), and accused Trudeau's administration of pandering to Khalistani sympathisers for political gain.

After the Nijjar claim, New Delhi expelled six Canadian diplomats and recalled its envoy to Ottawa after Canada attempted to question Indian officials as “persons of interest” in the case. Further, the Trudeau government drew flak after pro-Khalistan activities in Canada, including an attack on a Hindu temple near Toronto.

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Consequently, with the ties deteriorating further, both countries expelled top envoys, froze trade negotiations, and suspended official visits.

Meanwhile, Carney has not directly referred to the Nijjar case that led to the souring of ties, indicating that he was ready to let go of past baggage. Instead, he said, the “strains on the relationship” could be addressed with mutual respect. However, many see the change in Canada’s tone in the context of US President Donald Trump’s imposition of tariffs and his threat to make Canada the 51st American state.

Defeat of pro-Khalistan NDP

In a development that augurs well for India-Canada ties, the New Democratic Party (NDP) led by pro-Khalistani leader Jagmeet Singh has suffered a crushing defeat in Canadian elections.

While Singh lost his own seat, his party was reduced to a single-digit seat count. As the polls closed in Canada, Singh conceded defeat in his British Columbia riding of Burnaby Central, and the party is at risk of losing its official status, according to Canadian media.

Stepping down as the party chief after being 8 years in charge, the 46-year-old said he was “disappointed” the NDP could not win more seats.

In a post on X, he also said, “It has been the honour of my life to lead the NDP and to represent the people of Burnaby Central. Congratulations to Prime Minister Carney and all the other leaders on a hard-fought campaign. I know this night is disappointing for New Democrats.”

Crucial support to Trudeau

With his views often aligning with the objectives of the Khalistan movement, Jagmeet Singh has been a vocal supporter of Khalistani politics that seeks to establish a separate Sikh state in India. He emerged as a key figure backing then Canadian PM Justin Trudeau when India-Canada ties deteriorated following Ottawa’s allegations of New Delhi’s involvement in the killing of Nijjar.

Trudeau had to rely on Singh’s NDP to remain in power for four years. However, the NDP became the last of Canada's three main Opposition parties to break with Trudeau last September, with Singh accusing him of caving into corporate greed.

Singh, who was running his third federal election campaign, was the first ethnic minority politician to lead a major federal party in Canada.

Diaspora, trade partnership

India is one of the largest sources of immigrants to Canada. Overseas Indians and the Indo-Canadian community number nearly 2.8 million as temporary workers, students, or permanent residents. The student population alone, estimated at over 4,27,000, plays a big role in Canada's education and labour market.

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Though diplomatic ties between the two countries may have frayed under Trudeau, immigration from India remained high. Now, Carney is expected to maintain this policy track, particularly for skilled professionals, tech workers, and students.

The diplomatic feud also took a toll on the Comprehensive Economic Partnership Agreement (CEPA) between Canada and India. The trade deal had been under negotiation for years but was shelved following the Nijjar allegations and reciprocal expulsions.

However, Carney’s recent remarks at least suggest a readiness to revive CEPA.

In 2023, bilateral services trade stood at CAD 13.49 billion. Both governments had previously explored expanding cooperation in AI, fintech, green energy, and higher education. These areas could regain traction under Carney's leadership, especially as both economies look to reduce dependence on China and the US amid the ongoing tariff war.