A renewed commitment between India and Canada aims to complete a comprehensive trade deal by 2026, shifting from political tensions to a focus on finance, energy security, and people-to-people ties, signalling a strategic reset between two middle powers.
One week after their finance ministers met in Toronto, India and Canada used a fresh round of official talks in New Delhi on 2 September to restate the central promise of their rapprochement: finish negotiations on a Comprehensive Economic Partnership Agreement before the end of 2026 and push bilateral trade to CAD 70 billion, or about INR 4.65 lakh crore, by 2030. The latest Foreign Office Consultations, led by India’s Secretary (East) Rudrendra Tandon and Canada’s deputy minister of foreign affairs Arun Thangaraj, suggest the reset is no longer resting on symbolism alone but is being carried forward through a series of working-level mechanisms. (canada.ca)
That matters because the relationship is still emerging from one of the sharpest downturns in its modern history. Canadian allegations that Indian government agents were involved in violence against Canadian citizens, including the 2023 killing of Hardeep Singh Nijjar in British Columbia, badly damaged trust and froze political engagement. The turnaround gathered pace after June 2025 and was formalised when Mark Carney travelled to India from 27 February to 2 March 2026, the first bilateral visit to India by a Canadian prime minister since 2018. A further meeting between Carney and Narendra Modi on the sidelines of the G7 summit in France on 16 June kept that momentum going, with both leaders again backing a year-end trade deal and wider institutional engagement. (pm.gc.ca)
The Toronto dialogue on 27 August gave the thaw practical content. François-Philippe Champagne and Nirmala Sitharaman agreed to make finance a new pillar of the relationship, covering payments modernisation, fintech, capital markets, financial stability and action against financial crime. The joint read-out said India was ready to open talks on a bilateral investment treaty “at the earliest”, while both sides also discussed the tax stability and certainty sought by Canadian pension funds and other long-term investors with exposure to India. Officials said they would encourage work on cross-border remittances and merchant payments, and revive plans to involve the National Payments Corporation of India and Payments Canada. Sitharaman said Carney and Modi had brought “fresh momentum” to the partnership; Ottawa has already agreed that the next economic and financial dialogue should take place in 2027. (canada.ca)
For Canada, the courtship of India is also being shaped by pressure much closer to home. The Toronto meeting took place two days after Champagne and colleagues set out dollar-for-dollar counter-tariffs against a wide range of US goods, underlining how urgently Ottawa wants to diversify beyond its dominant southern market. Champagne told reporters the two economies were “uniquely complementary” and argued that “Canada can provide energy security and food security to India. And India can provide to Canada scale, talent, and technology.” Canadian investment in India was already more than $110 billion in 2024, according to Canadian Press reporting, and trade minister Maninder Sidhu said he wanted to lock down an agreement with India before the end of this year. (ipolitics.ca)
The March agreements sketched out why both governments think the economics are real. Carney and Modi tied the reset to energy security, critical minerals and supply-chain resilience, and the visit produced a CAD 2.6 billion deal under which Cameco will supply nearly 22 million pounds of uranium to India from 2027 to 2035. The same package included memorandums on critical minerals and renewable energy, closer work on solar, wind, biofuels and hydropower, and a push to deepen commercial links in LNG and LPG. When the prime ministers met again in June, they said progress was continuing on LNG, LPG and metallurgical coal, while also agreeing to start negotiations on a General Security of Information Agreement, a sign that security cooperation is being rebuilt alongside trade. (pm.gc.ca)
The broader architecture has also been filling in through the year. In late March, Sidhu and India’s commerce minister Piyush Goyal said a first CEPA negotiating round had been completed. By May, the two governments had launched a Canada-India Trade and Investment Forum, which Ottawa described as a new platform to bring business leaders together, and said Canada would lead a Team Canada trade mission to India later in 2026. The leaders had already reconstituted the India-Canada CEO Forum in March, arguing that business recommendations should feed directly into the trade talks rather than wait until after a deal is done. (canada.ca)
People-to-people ties remain one of the strongest arguments for making the reset durable. Canada says more than 1.8 million Canadians are of Indian origin, and Carney’s March visit was used to launch a talent and innovation strategy built around 13 new university partnerships. Those plans included a Dalhousie University innovation campus with IIT Tirupati and IISER Tirupati, new University of Toronto and McGill centres of excellence in India, 300 funded Indian student researcher positions and more than 220 new Toronto scholarships for Indian students. Ottawa also said HCL Technologies would expand its Canadian workforce by 75% by 2030. That social and educational ballast gives the relationship a depth that pure trade diplomacy rarely enjoys. (pm.gc.ca)
None of this erases the political sensitivities that nearly derailed the partnership, and neither capital is pretending it does. What has changed is that New Delhi and Ottawa now appear determined to contain those disputes inside a denser web of dialogues on trade, finance, defence, migration, science and consular affairs. The test over the remaining months of 2026 is whether that machinery can produce a finished trade pact on schedule. If it does, the India-Canada reset will look less like a temporary thaw and more like a deliberate attempt by two middle powers to turn estrangement into managed interdependence. (canada.ca)
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