Prime Minister Mark Carney and India’s Prime Minister Narendra Modi have agreed to launch negotiations toward a new Comprehensive Economic Partnership Agreement (CEPA), signaling a major shift in the relationship between the two countries. A senior Canadian official confirmed that the two leaders reached this consensus during their bilateral meeting on the sidelines of the G20 Summit in Johannesburg.
The development comes at a time when Canada and India are cautiously rebuilding ties after years of diplomatic strain. Speaking to CTV News earlier in the day, Carney said that he considers India a reliable trading partner—adding that, like with any major global economy, friction can arise but mechanisms exist to address issues constructively. He emphasized that formalizing trade through a CEPA would open the door to more efficient, scalable, and protected economic engagement with one of the world’s fastest-growing markets.
Carney has made clear that rebuilding Canada’s relationship with India is a priority, especially amid uncertainty in global trade dynamics. Sunday’s meeting marks the second personal engagement between the two leaders in six months. The pair also participated in a trilateral announcement with Australia’s Prime Minister, unveiling a new tech and innovation partnership.
Tensions between Canada and India escalated sharply in 2023, after former prime minister Justin Trudeau publicly stated there were “credible allegations” linking Indian government agents to the killing of Canadian Sikh leader Hardeep Singh Nijjar. That was followed by accusations from Canadian authorities that Indian diplomats engaged in clandestine criminal activities in Canada, including involvement in homicides and extortion. The diplomatic fallout led both nations to expel six of each other’s diplomats, and Canada halted trade negotiations that same year.
Carney now says his government wants to stabilize and strengthen the commercial relationship, framing the potential CEPA as a tool that offers clarity, protections, and predictable rules for businesses in both countries. While he acknowledged Canada must remain vigilant against foreign interference, he stressed that engagement and transparency are key.
International Trade Minister Maninder Sidhu, who has just returned from a three-day mission to India focused on sectors such as critical minerals, clean energy, and agriculture, has also highlighted the importance of maintaining dialogue. Although pressed repeatedly in a CTV interview, Sidhu did not directly call India a “reliable partner,” saying instead that the relationship requires ongoing and open communication. He noted that Canada is pursuing economic opportunities while simultaneously ensuring public safety and working with Indian officials through law enforcement channels.
Sidhu hinted that the Carney government intends to pursue a fresh start rather than revive earlier suspended trade negotiations, framing the approach as part of a new mandate under a new prime minister.
For its part, India has expressed its own reservations. Last month, Indian High Commissioner Dinesh Patnaik told CTV Question Period that Canada is “not yet” considered a reliable supplier in areas like energy, but expressed hope that the relationship could evolve. Despite past disputes, he said India believes Canada has the potential to become a dependable long-term partner.
Recent signs of thawing relations include the agreement reached in October to allow diplomats to return to their postings, following Foreign Affairs Minister Anita Anand’s visit to New Delhi.
India remains Canada’s seventh-largest trading partner, with two-way trade reaching $30.9 billion in 2024. India is also Canada’s largest source of immigrants, including nearly 393,000 Indian students that year. With the initiation of new CEPA discussions, both countries now appear ready to explore a more stable and forward-looking partnership.