India-Canada Relations

Context

India and Canada have taken a major step toward resetting bilateral relations with the signing of a landmark civil nuclear agreement and renewed commitment to conclude a Comprehensive Economic Partnership Agreement (CEPA). The agreements were finalised following bilateral talks between Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney at Hyderabad House, New Delhi.

This marks a significant diplomatic revival after relations had deteriorated in 2023.

What are the Key Highlights of  India and Canada High-level Engagements? 

• Energy:
  • On the sidelines of India Energy Week (IEW) 2026, both countries restarted the Canada–India Ministerial Energy Dialogue (CIMED). The dialogue will focus on ensuring diversified energy supplies such as LNG, LPG, and crude oil. Both sides also agreed to work together on hydrogen production, carbon capture technologies, and sustainable aviation fuels.
• Food Security:
  • Canada, which already supplies about 25% of India’s Muriate of Potash (MOP), reaffirmed that it will continue to be a reliable supplier. In an important policy step, Canada also announced that it will match any investment made by Indian partners in its natural resources sector.
• Critical Minerals & Clean Mobility:
  • Both countries agreed to create coordination frameworks for Advanced Chemistry Cell (ACC) manufacturing and research on next-generation batteries. Canada also reiterated its willingness to support India’s demand for Lithium, Cobalt, Graphite, and Rare Earth Elements (REEs), which are essential for India’s EV missions such as PM E-DRIVE. The first Canada–India Critical Minerals Annual Dialogue will be held in March 2026 in Toronto to help build transparent and resilient supply chains.
• Trade:
  • Both sides agreed to speed up negotiations for the Comprehensive Economic Partnership Agreement (CEPA), with the goal of increasing bilateral trade to USD 50 billion by 2030. The Canadian Prime Minister also proposed a visit to India in March 2026, during which a 10-year uranium supply agreement worth 2.8 billion Canadian dollars is expected to be finalized.

What are the Key Highlights of India-Canada Bilateral Relations? 

• Background:
  • India and Canada share a long-standing relationship based on common democratic values and multicultural societies. Indian migration to Canada began during the freedom struggle, when institutions such as the Swadesh Sevak Home in Vancouver supported efforts against British rule. Diplomatic relations between the two countries were established in 1947. India’s Constitution also drew inspiration from the Canadian federal model, particularly the concept of a strong Centre and residuary powers with the Centre. The relationship expanded further after India’s economic liberalisation in the 1990s, and in 2015 the ties were elevated to a Strategic Partnership.
• Strategic Importance:
  • India is an important partner in Canada’s Indo-Pacific Strategy, which reflects the growing economic and geopolitical alignment between the two countries.
• Trade:
  • In 2024, India became Canada’s 7th largest trading partner, with total bilateral trade reaching USD 30.9 billion. India also maintained a trade surplus in goods.
• Top Canadian exports to India:
  • Vegetables, mineral fuels and oils, wood pulp, fertilisers, paper and paperboard.
• Top Indian exports to Canada:
  • Pharmaceuticals, machinery, electronics, precious stones and metals, iron and steel products.
• Diaspora:
  • Canada hosts one of the largest Indian diasporas in the world, with more than 1.8 million people of Indian origin living there.
• Technology and Innovation Cooperation:
  • Cooperation in technology and innovation is supported by the Canada–India Science and Technology Cooperation Agreement (2005). This partnership is guided by the Joint Science and Technology Coordination Committee (JSTCC).
• Space Cooperation:
  • ISRO and the Canadian Space Agency (CSA) have signed Memorandums of Understanding, and ISRO’s commercial arm ANTRIX has launched several Canadian nanosatellites.
• Security Cooperation:
  • Security cooperation between the two countries is based on the Joint Working Group on Counter Terrorism established in 1997 and the Framework for Cooperation on Countering Terrorism signed in 2018. Legal cooperation is also supported through the Extradition Treaty (1987) and the Mutual Legal Assistance Treaty (1994).

What are the Major Challenges in India-Canada Relations? 

• The Khalistan Issue:
  • A major concern is the gangster–terrorist network believed to be operating from Canadian soil, where Khalistani separatists are said to work with organised crime groups to carry out activities such as extortion, intimidation, and targeted killings in India. New Delhi considers Canada’s approach as “permissive vote-bank politics”, arguing that it allows extremists to use asylum loopholes and find safe haven there. India believes this poses a direct threat to its internal security, especially in Punjab. At the same time, both countries face difficulty in agreeing on how to distinguish between legitimate political activism and violent extremism, particularly when dealing with gangs that operate across borders.
• Trade & Economic Obstacles:
  • Efforts to finalise the Comprehensive Economic Partnership Agreement (CEPA) continue to face challenges due to high tariffs on Canadian agricultural exports and on Indian textiles and pharmaceuticals. There are also non-tariff barriers, such as India’s complex sanitary and phytosanitary (SPS) regulations and Canada’s strict regulatory standards for Indian electronics and chemical products.
• Digital Trade & Privacy:
  • Differences in data governance models and India’s data localization laws create difficulties for Canadian technology and AI companies that want to operate and integrate in the Indian market.
• Geopolitical Divergence:
  • Although both countries support the idea of the Indo-Pacific, their strategic priorities are often different. Canada’s Indo-Pacific strategy focuses more on de-risking and human rights, while India places greater emphasis on maritime security and balancing China’s influence in the region. At present, both countries are also moving closer to each other partly to reduce risks arising from trade uncertainty with the United States.

What Measures can Strengthen India-Canada Relations? 

• Diplomatic Recalibration:
  • A Bilateral Security and Sovereignty Dialogue should be established at the National Security Advisor level to address issues related to Khalistani extremism. This dialogue would include clear protocols for intelligence sharing and legal cooperation. A 2+2 Dialogue Mechanism should also be introduced to reduce strategic differences between the two countries on Indo-Pacific security, counter-terrorism, and maritime cooperation.
• Strengthening Human Capital:
  • Both countries should actively engage with the diaspora and promote Track-II diplomacy to strengthen people-to-people connections. This can include greater cultural exchanges and efforts that support dialogue and conflict resolution. Expanding joint film and arts co-productions can also help celebrate the “Living Bridge” created by the diaspora and counter negative political narratives.
• Intelligence Coordination:
  • The Joint Working Group on Counter-Terrorism should be revitalized to develop a shared database on organised crime networks and extremist funding. There should also be stronger use of the existing Extradition Treaty (1987) and the Mutual Legal Assistance Treaty (1994) so that criminals cannot use either country as a “safe haven.”
• Digital Public Infrastructure (DPI) Export:
  • Canada could act as a testing ground for India’s Digital Public Infrastructure in a G7 economy, which would help enable smooth and seamless cross-border payments.
• Professional Accreditation:
  • Both countries should move towards mutual recognition of professional qualifications such as those of doctors, engineers, and nurses. This would transform the issue of student migration into a skilled talent partnership and help reduce tensions related to visa caps.
• GIFT City Ecosystem:
  • Canadian research clusters could be encouraged to establish themselves in India, especially in areas like cold-chain technology and sustainable mining, which are important for achieving India’s Viksit Bharat@2047 goals.

FAQ’s

1. What security frameworks govern India–Canada cooperation?
Security cooperation between the two countries is guided by the Joint Working Group on Counter Terrorism established in 1997 and the Framework for Cooperation on Countering Terrorism signed in 2018. Legal cooperation is further supported through the Extradition Treaty (1987) and the Mutual Legal Assistance Treaty (1994).

2. Why is the Khalistan issue significant in bilateral relations?
India considers the activities of pro-Khalistan groups in Canada a serious national security concern, which has caused a major breakdown of trust between the two countries.

3. How important is trade between India and Canada?
Trade between the two countries is significant. In 2024, India became Canada’s 7th largest trading partner, with total bilateral trade reaching USD 30.9 billion, and India maintaining a trade surplus in goods.

4. Why is Canada strategically important for India?
Canada is strategically important for India because of its large energy resources, availability of critical minerals, strong technology base, and its role in the Indo-Pacific region, which supports India’s long-term growth and energy security.