A new beginning: Geopolitical shifts drive the reset in Indo-Canadian ties

A year after Indo-Canadian ties touched rock bottom, collateral damage from the murder of a pro-Khalistani activist, Canadian Foreign Minister Anita Anand’s visit signals a cautious turnaround. The exit of Justin Trudeau, whose dependence on Khalistani leaders to stay in power marred relations with India, and the accession of Mark Carney as Prime Minister in March this year significantly changed the dynamics of the relationship. For one, the poor performance of the pro-Khalistani party in the Canadian elections has removed a major political obstacle for closer Indo-Canadian relations. For another, as an economist and former central banker, Mr Carney was well aware of the need for smoother relations. The initial thaw, which began with a meeting between the two Prime Ministers on the sidelines of the G7 summit in Canada in June, has yielded a three-day visit by Ms Anand, the first to India by a Canadian foreign minister in over two years, and a warmly worded join statement that spoke of “respect for each other’s concerns and sensitivities”. Both countries’ high commissioners, expelled just a year ago, have resumed their responsibilities in the capitals.

 

For all the visible diplomatic affability, hard geopolitical realities have dictated the swiftness with which both sides have worked to revive relations. Both countries have been at the receiving end of tariffs imposed by American President Donald Trump, and they are hurting both economies. Both are in the throes of tough negotiations with Washington for a trade deal. The agreement to re-establish bilateral mechanisms on trade, investment, and cooperation on science and technology reflects the impulse for both countries to strengthen mutually reinforcing activities. Again, China’s recently imposed export controls on rare earths have added to both countries’ economic challenges for their automobile and electric vehicle industries. The announcement of an annual dialogue on critical minerals is designed to explore ways of collaborating on energy security, and will include cooperation in civil nuclear energy. Ministerial-level discussion on bilateral trade and investment has been put in place. In this context, it is significant that Ms Anand’s visit will include a trip to Mumbai to meet with chief executives of Indian corporations as a prelude to resuming the India-Canadian CEOs’ Forum in 2026. Also consequential is the setting up of a joint working group on higher education, one of the biggest casualties of the strained relations between the two countries. Last year, Indian student enrolment in Canada fell nearly 41 per cent as Ottawa hardened visa regulations, which significantly raised fees and compliance costs. 

 

Foreign Minister S Jaishankar referred to an “ambitious road map to advance cooperation”. Its success, however, will depend on how India can take advantage of the reset to take forward the initiative. It is notable that Ms Anand will also be visiting China on this trip to explore closer economic ties and energy cooperation, suggesting that India is not the only big economy on Canada’s radar as it looks to offset the impact of the US trade war. Meanwhile, the ongoing trial in a Manhattan court of the 2023 killing of Hardeep Singh Nijjar in British Columbia and the Indian government’s alleged role in it remain an inconvenient element in the relationship. How both countries choose to address the challenges stemming from this case will test the strength of these renewed ties.