With the change of government in Ottawa in March 2025, India and Canada have begun cautiously nudging their bilateral relationship back on track after an unprecedented period of diplomatic chill between the two democracies.
This recalibration was reflected last week when India’s National Security Adviser Ajit Doval travelled to Ottawa to meet his counterpart, Nathalie Drouin. The two sides agreed on a preliminary security and law-enforcement workplan, including cooperation on counter-extremism and transnational crime. They also decided to establish liaison officers to strengthen institutional links and improve operational coordination.
This marks a significant development, given India’s longstanding concerns over extremist networks operating from Canadian territory. New Delhi has repeatedly flagged the activities of separatist groups, which it argues have flourished under Canada’s expansive free-speech protections.
According to India’s Ministry of External Affairs, the new framework will streamline bilateral communication and enable timely information sharing on issues of mutual concern, including the illegal flow of narcotics- particularly fentanyl precursors- and transnational organised crime networks, two issues which plague Punjab today.
Relations between the two countries had plummeted to an all-time low after then Prime Minister Justin Trudeau alleged in September 2023 that Indian agents were involved in the killing of a Sikh separatist leader in Canada. India firmly rejected the charge. What followed was a diplomatic freeze, marked by the expulsion of envoys, suspension of visas, and the halting of high-level exchanges.
It was only after the eminent economist and former central bank governor Mark Carney assumed office in March 2025 that bilateral ties began to stabilise. Since then, engagement has resumed in a measured and cautious manner. Carney’s upcoming visit to New Delhi, expected in the first week of March, will be the highest-level bilateral engagement in over two years. It signals a pragmatic reset anchored in shared strategic priorities- particularly trade, technology, and security.
As of September 2025, bilateral trade in goods stood at USD 7.34 billion, while services trade amounted to USD 10.43 billion. The visit is expected to kickstart formal negotiations on a Comprehensive Economic Partnership Agreement (CEPA), aimed at raising overall trade to USD 50 billion by 2030.
Several sectoral agreements are also expected, covering nuclear energy, oil and gas, environment, Artificial Intelligence, quantum computing, education, and cultural exchanges. Among the most significant is a proposed 10-year, USD 2.8-billion uranium supply deal that would strengthen India’s long-term energy security.
For Canada, closer economic engagement with India is part of a broader strategy to diversify its trade partnerships amid growing uncertainty in its relationship with Washington, given President Donald Trump’s aggressive posturing that included steep tariffs. Ottawa has set itself the ambitious target of doubling non-US exports over the next decade.
Underlying the bilateral relationship is a vast and influential Indian diaspora that has contributed significantly to Canada’s economy and society. With an estimated 1.8 million people of Indian origin- Sikhs forming the largest community- and over 400,000 Indian students enrolled in Canadian institutions, people-to-people ties remain a durable foundation for future engagement.
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