Mark Carney, a former central banker, has led the Liberal Party to victory in the Canadian federal elections – a win that could signal a reset in the strained India-Canada relationship.
Canada’s Liberal Party has won a fourth consecutive election, giving a mandate to Carney after a campaign with a pledge to boost economic growth and stand up to US President Donald Trump in the global trade war.
In his victory speech before supporters in Ottawa, Carney stressed the importance of Canadian unity in the face of the threats coming from Washington under President Trump, who has even expressed interest in making Canada as 51st state of the US.
“We are over the shock of the American betrayal, but we should never forget the lessons,” Carnay said reiterating his campaign remarks about the mutually beneficial system Canada and the US had shared since World War II had ended.
Impact on ties with India
The India-Canada relations have been strained in recent years, especially under the leadership of former Prime Minister Justin Trudeau, who resigned in January, paving the way for Mark Carney. Before the latest victory, Carney sworn in as the 24th prime minister of Canada on March 14, 2025.
Carney, a political newcomer, had recently described himself as the “most useful in a crisis.” In his campaign, he identified rebuilding ties with India as a priority, signalling a reset in relations between the two nations.
“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 signaling a departure from the strained diplomatic relationship under Justin Trudeau’s leadership.
As things stand. India remains a key strategic partner in Carney’s plans for Canada’s global economic and political engagement especially given his emphasis on diversifying trade and engaging with like-minded nations.
Strained relations with India
India-Canada relations have been strained since 2023 over allegations by then 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.
In October 2024, ties nosedived further when Canada expelled six Indian diplomats. India denied any involvement in Nijjar’s killing and condemned the accusations as baseless. Subsequently, both countries expelled top envoys, froze trade negotiations, and suspended official visits.
India has been accusing Canada of harbouring extremism in Canada’s Sikh diaspora. Under these circumstances, Carney’s victory is being watched closely. The win, experts say, has opened the door for a diplomatic reset, as Carney he is seen as a pragmatist and less ideological than his predecessor, Truddeau.
New Delhi views any support for Khalistani elements abroad as a threat to national security. Trudeau was seen as a leader unwilling to act on Indian concerns.
Immigration and Workforce
India is one of the largest sources of immigrants to Canada. There are about 2.8 million as temporary workers, students, or permanent residents in the Indo-Canadian community.
The number of Indian students heading to Canada has dropped sharply, with many affected by the real estate crisis, stricter immigration rules, and tensions between New Delhi and Ottawa.
Data from the Bureau of Immigration shows that Canada saw the biggest fall, with numbers dropping by 41 per cent, from 233,532 in 2023 to 137,608 in 2024. While diplomatic relations worsened during Trudeau’s term, immigration numbers from India remained high.
Carney is expected to maintain this policy track, particularly for skilled professionals, tech workers, and students India has also been a major contributor to Canada’s skilled workforce. Under Carney, immigration policies are expected to remain favorable, particularly for skilled professionals and students.
With his economic background, Carney is expected to support policies attracting top talent to bolster Canada’s workforce.
A more stable diplomatic relationship of Canada with India could lead to an increase in student and work visas, as well as smoother processing of permanent residency applications.
The anticipate reset in relations is also expected to see the return of cooperation in recognising Indian credentials
The Trade Factor
The strained ties between India and Canada had stalled Comprehensive Economic Partnership Agreement (CEPA). This trade deal, under negotiation for years, was shelved following the Nijjar allegations and the aftermath.
Carney’s remarks indicate that the CEPA will be revived.
We are over the shock of the American betrayal, but we should never forget the lessons.
In 2023, bilateral services trade stood at 13.49 billion Canadian dollar. The two nations showed intentions previously to expand cooperation in Artificial Inteligence, fintech, green energy and higher education.
Partnerships in these areas might regain attentions in Carney’s regime. Both, India and China economies look to reduce dependence on China and the US.
About The Author
