Canada has quietly begun a reset with one of its most important Asian trading partners. On his recent visit to New Delhi, Canada’s Trade Minister underscored Ottawa’s intention to rebuild trade ties with India, aiming to attract Indian investment and renew momentum in bilateral commerce. The trip signals a shift in strategy after years of diplomatic unease.
Relations between Canada and India cooled sharply in 2023 following serious diplomatic accusations made by Canada regarding Indian involvement in the killing of a Sikh separatist on Canadian soil. India responded by reducing visa services and suspending high-level engagement. As a result, trade negotiations stalled and business confidence wavered.
Now, under the leadership of Prime Minister Carney and Trade Minister Sidhu, Ottawa appears ready to turn the page. The minister’s visit to India is billed as the first major engagement since the freeze, and Canada has placed India at the top of its economic priorities. The trade minister noted that the visit aims to “reinforce Canada’s commitment to diversifying our trade relationships and attracting new investment.” (Government of Canada release)
During the talks, Canada emphasised sectors where it believes partnership with India can flourish. Key areas include clean technology, critical minerals used in battery manufacturing, agriculture, and artificial intelligence. One striking point: Canada has large reserves of lithium, cobalt and other minerals essential to electric vehicle and storage industries. By inviting Indian investment in these fields, Canada hopes to position itself as a strategic supplier.
India, in turn, brings scale and capital. With one of the fastest-growing major economies, India offers a large market and a growing class of industrial conglomerates already interested in global expansion. Indian business already shows interest in Canadian infrastructure and mining projects, and Canadian officials say invitations have gone out for Indian delegations to visit.
The desire to rebuild trade ties with India comes with strings attached. First, the diplomatic rift that led to this reset must be managed carefully—while business can overtake politics, unresolved issues such as diaspora concerns and security remain sensitive. Second, both sides will need to translate broad ambition into specific deals. Past dialogues between the two countries produced warm statements but few high-value agreements. Some industry watchers caution Canada must move from talk to contracts.
There’s also the matter of competition and global strategy. For instance, both countries face pressure from U.S. trade policy and shifting supply-chain dynamics. Canada’s decision to broaden commercial ties beyond the United States feeds into this and a successful reset with India is a key piece. But India itself balances between many global partners and will judge Canada on both cost and reliability.
This moment offers a fresh opportunity for Canada and India. For Canada, rebuilding trade ties with India diversifies its export markets and lessens dependence on the U.S. For India, strengthened ties with Canada bring access to resources and technology. Canadian officials note bilateral trade already reached roughly USD 30 billion in 2024, and the potential exists to raise that figure through strategic investments.
Moreover, the broader geopolitical context heightens relevance. In an era of supply-chain disruption, climate-driven sectors and technology race, aligning with India gives Canada a chance to anchor into growth markets. At the same time, India gains a Western partner that shares democratic values and industrial ambitions.
Today’s move to rebuild trade ties with India marks more than a diplomatic thaw. It reflects Canada’s strategy to reposition itself economically in the Indo-Pacific era and India’s pursuit of diversified global partnerships. If both sides deliver on earlier promises of technology, investment and resources, this reset could yield big wins. The next test will be turning goodwill into deals, and ensuring this renewal runs deeper than symbolism and lasts beyond the photo-ops.
