India-Canada Relations- Explained Pointwise

Canadian Prime Minister Mark Carney’s ongoing visit to India marks an important milestone in India–Canada bilateral relations, which have experienced significant fluctuations over the past two and a half years.

However, both countries undertook substantial diplomatic efforts to rebuild ties after Justin Trudeau was succeeded by Mark Carney in 2025. Prime Minister Carney’s recent visit to India forms part of a broader initiative to reset and revitalize bilateral relations.

Table of Content

What is the history of India-Canada Relations? What is the Significance of India-Canada Relations? What are the challenges in the Relations between the two countries? What Should be the way forward?

What is the history of India-Canada Relations?

Establishment of Relations	India-Canada established diplomatic relations in 1947. This relationship was to be built upon built shared traditions of democracy, pluralism and strong interpersonal connections.
Phase of Thaw in Relationship (1947-1974)	The Colombo Plan (1951): Canada provided significant foreign aid, food assistance, and technical expertise. Nuclear Partnership: Canada helped build India’s first nuclear research reactor (CIRUS) in 1954. At the time, Canada viewed itself as a “bridge” between India and the Western world.
Deterioration in Relationship (1974-2000s)	India-Canada relations witnessed deterioration in the political domain despite economic engagement, regular high-level interactions and long-standing people-to-people ties. Canada’s opposition to India’s nuclear tests (1974 & 1998): After India’s 1974 “Smiling Buddha” test, Canada accused India of using the CIRUS reactor (intended for peaceful use) to create plutonium for weapons. Canada severed nuclear ties and imposed sanctions, which were renewed after India’s 1998 tests. Khalistan Issue: The bombing of a Montreal-to-Delhi Air India flight by Sikh separatists, which killed 329 people, remains the deadliest mass murder in Canadian history. It created long-standing friction over how Canada handled domestic extremism.
Phase of Renewal of Bonhomie (2010-2022)	Nuclear Reconciliation (2010): A landmark Civil Nuclear Cooperation Agreement was signed, finally ending the decades-long nuclear freeze. PM Visit (2015): Prime Minister Narendra Modi’s visit to Canada in 2015 was the first bilateral visit by an Indian PM since 1973. The government hailed the visit with the assumption that decades of mistrust over the Khalistan issue could be brushed aside. Strategic Partnership (2018): Ties were elevated to a “Strategic Partnership.” Trade grew steadily, and India became the top source of international students and immigrants to Canada.
Nijjar Crisis & Resetting of ties (2023-2025)	The Diplomatic Row (2023–2024): In September 2023, then-PM Justin Trudeau alleged a “potential link” between Indian agents and the killing of Hardeep Singh Nijjar, a Canadian Khalistani activist. This led to a cycle of expelled diplomats, suspended visas, and heated rhetoric. The 2025 Recovery: Following the election of Prime Minister Mark Carney in Canada, a “reset” began. At the 2025 G7 and G20 summits, PM Modi and PM Carney agreed to reinstate High Commissioners and resume trade negotiations.

 

The Khalistan Shadow over India-Canada Relations over the years: During Militancy In Punjab: 1982: Prime Minister Pierre Trudeau (Justin Trudeau’s father) declined to extradite Talwinder Singh Parmar accused of killing two police officers in Punjab. 1984: In the aftermath of Operation Bluestar (launched by the Indian army to root out militants from the Golden Temple in June 1984) bolstered the Khalistan movement among the diaspora. 1985: Babbar Khalsa (Khalistan separatist organisation) orchestrated the bombing of Air India Kanishka in June 1985 which resulted in 331 civilian deaths. Post-2015 Period: 2015: Justin Trudeau’s proximity to individuals sympathetic to Khalistan’s cause strained bilateral relations. 2017: The then Punjab Chief Minister Capt Amarinder Singh refused to meet Canadian Defence Minister Harjit Singh Sajjan, accusing him of associating with separatists. 2018: India got aggravated when Jaspal Atwal convicted of attempting to assassinate an Indian Cabinet minister in 1986 was invited to dine with Trudeau during his Visit to India. Trudeau got a cool reception during his visit to India when he was received at the airport by Minister of State for Agriculture Gajendra Singh Shekhawat instead of PM Modi. 2019: The annual ‘Public Report on the Terrorist Threat to Canada’ released in December 2018, mentioned ‘Sikh extremism’ and Khalistan for the first time. However, in 2019 Canada revised the report just a day before Vaisakhi, removing all mentions of Khalistan and Sikh extremism. 2020: India accused Trudeau of inciting extremists when he expressed concerns about New Delhi’s response to the farmers’ protest and pledging support for their rights. 2022: In March 2022, Trudeau’s Liberal Party formed an alliance with the New Democratic Party (NDP), led by Jagmeet Singh, who openly endorsed the Khalistan Referendum on Canadian soil. 2023: In September 2023, PM Trudeau alleged “credible links” between Indian government agents and the killing of Nijjar (a designated terrorist in India) in British Columbia. This led to a complete diplomatic breakdown which caused expulsion of 41 Canadian diplomats from India, withdrawal of High Commissioners in 2024.  2025-26: Following the leadership change in Canada (PM Mark Carney), the two countries have attempted a “strategic decoupling” of the Khalistan issue from trade and energy. To firewall the relationship from the Nijjar investigation, both sides have created a separated framework under the NSA to discuss ‘transnational crimes’. This mechanism is specifically meant to address the concerns related to pro-Khalistani activities in Canada.

What is the Significance of India-Canada Relations?

1. Cooperation in Indo-Pacific: Canada’s Indo-Pacific Strategy has listed India an important partner in the Indo-Pacific region. It has marked out China as an “increasingly disruptive global power”, while referring to India as a “critical partner” with shared traditions of democracy and pluralism.
2. Trade and Commerce:
   • India is Canada’s 7th largest trading partner.
   • Bilateral trade between India and Canada stands at USD 30 billion in 2024.
   • More than 400 Canadian companies have a presence in India and more than 1,000 companies are actively pursuing business in the Indian market.
   • Canada and India are working toward a Comprehensive Economic Partnership Agreement and a Foreign Investment Promotion and Protection Agreement (FIPA) – with the aim to double the two-way trade to $70bn by 2030.
   • Canada remains India’s most reliable supplier of potash (fertilizer) and pulses (lentils), which are critical for India’s agricultural stability.

     

3. Investment: According to DPIIT, Canada is the 17th largest foreign investor in India. Its cumulative investment of ~$4bn from 2000 to 2025 represented 0.56% of the total FDI flows into India.
4. Security & Defence:
   • India & Canada have regularly engaged in dialogue & cooperation on global security issues, including counterterrorism, cybersecurity & regional stability.
   • The bedrock of the security relationship remains the Joint Working Group (JWG) on Counter-Terrorism (established in 1997).
   • Both the sides have also enhanced the security cooperation through another framework on ‘Countering Terrorism & Violent Extremism’ signed in 2018.
5. Energy sector:
   • With Canada’s vast natural resources & India’s expanding energy demand, the energy cooperation remains a key pillar of the bilateral relationship.
   • The partnership encompasses both – conventional & RE resources – with Canada pitching itself as a reliable supplier of oil, gas, LNG, LPG, Crude oil & Critical minerals.
   • India and Canada signed a Nuclear Cooperation Agreement (NCA) in 2010 for which a Joint Committee on Civil Nuclear Cooperation was constituted by both the countries. Uranium supply deal has been signed during PM Modi’s visit in 2015.
6. S&T and Space: ISRO and CSA (Canadian Space Agency) have signed MoUs for cooperation in the field of exploration and utilisation of outer space. ANTRIX, the Commercial arm of ISRO, has launched many Canadian Satellites.
7. Education Sector: Since 2018, India has been the largest source country for international students in Canada. This has helped Canadian universities and colleges to provide subsidised education to domestic students.
8. Indian Diaspora (The “Living Bridge”): Canada hosts one of the largest Indian diaspora in the world numbering 1.8 million (PIOs and NRIs) which account for more than 3% of its total population. The diaspora has done commendably well in every sector in Canada. In the field of politics, the present House of Common (total strength of 338) has 22 Members of Parliament of Indian-origin.

What are the challenges in the relations between the two countries?

1. Khalistani separatist factor:
   • It is the single most important challenge between India and Canada. The Canadian government’s Policy of balancing the Sikh assertions and its relations with India, has jeopardised the India-Canada Relations.
   • The attacks on Non-Sikh Indian Diaspora, Indian Consulates and Temples have further strained the India-Canada Relations.
2. Trade Challenges:
   • Structural impediments such as complex labour laws, market protectionism, and bureaucratic regulations have been roadblocks for Indo-Canadian trade relations.
   • Bilateral agreements, such as the Comprehensive Economic Partnership Agreement (CEPA) and Investment Promotion and Protection Agreements (BIPPA), have been in negotiation for long time and no progress has been reached by both the countries.
3. Foreign Interference Allegations Canada’s Public Inquiry into Foreign Interference concluded in 2025 that India had become “the second most active country” after China in engaging in electoral foreign interference in Canada, with intelligence suggesting proxy agents may have illicitly supported certain Canadian politicians.
4. Human Rights Disagreements Canada has been vocal about human rights concerns in India, particularly related to the treatment of religious minorities like Sikhs and Muslims, while India has expressed concerns over attacks on Hindu minorities and religious places in Canada.
5. Immigration Tensions Many Indians are returning from Canada due to high living costs and shrinking job opportunities. Indian applications for study permits saw a 40% decline in 2023, driven by diplomatic tensions, Canadian immigration policy changes, and economic concerns. Canada also announced plans to reduce student visas by 35% in 2024, with an additional 10% reduction in 2025.

What Should be the way forward?

1. Constructive and Sustained Engagement: India will have to build a constructive and sustained engagement with the Sikh diaspora, dispel the misinformation propagated by the Khalistani separatists and showcase the sense of contentment prevailing in Punjab.
2. Revive the Stalled Free Trade Agreement (CEPA): Economic interdependence is one of the best buffers against political friction. Both governments should restart CEPA negotiations with renewed political will, focusing on sectors where there is clear mutual benefit — technology, pharmaceuticals, critical minerals, clean energy, and agriculture. A stronger trade relationship creates stakeholders in both countries who have a vested interest in stable ties.
3. Dehypenation: India and Canada must dehypenate their political contestations over the Khalistan issue and their trade and investment relations. Both the countries must look to be back on the trade negotiations table back soon to finalise the Free Trade Agreement (FTA) between the two countries.
4. Civil Society and Track II Diplomacy: India and Canada must encourage civil society organisations and Track II diplomacy initiatives to foster people-to-people connections, dialogue, and conflict resolution efforts.
5. Media and Public Diplomacy: Promotion of responsible reporting to ensure that media coverage and public discourse accurately reflect the complexities of the relationship and the efforts being made to strengthen it.
6. Cooperate on Global Strategic Priorities Both nations share interests in a rules-based international order, Indo-Pacific stability, climate change, and democratic governance. They can align in multilateral forums like the G20, Commonwealth, and the UN on issues like climate finance, digital governance, and food security — even when bilateral politics is complicated.
7. Manage the China Factor Together Both India and Canada are increasingly wary of Chinese influence — in their economies, institutions, and political systems. This shared concern could be a significant convergence point. Collaborating on supply chain resilience, critical minerals (Canada is rich in them, India needs them), and technology standards could turn a geopolitical challenge into a bilateral opportunity.

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