India-Canada Bilateral Relations
India and Canada have agreed to take "calibrated" and "constructive" measures to reset and stabilize their bilateral relationship. This includes resuming negotiations on an interim trade agreement after a two-year hiatus and appointing new high commissioners in each other's capitals.
Key Developments
- Indian Prime Minister Narendra Modi and Canadian Prime Minister Mike Carney met at the G7 Summit in Kananaskis, Alberta.
- Both leaders decided to restart senior ministerial and working-level engagements to "rebuild trust" and invigorate their relationship.
- Resumption of the Early Progress Trade Agreement (EPTA) negotiations is aimed at facilitating a Comprehensive Economic Partnership Agreement (CEPA).
Background and Issues
Relations between the two countries deteriorated following the June 2023 killing of Khalistani separatist Hardeep Singh Nijjar and subsequent diplomatic expulsions in October 2023.
Prime Minister Modi and Prime Minister Carney reaffirmed their commitment to the rule of law and the principles of sovereignty and territorial integrity.
Economic Engagement
- India's exports to Canada reached $4.2 billion in FY25, marking a 9.8% increase year-on-year. Key exports include medicines, garments, diamonds, chemicals, seafood, and more.
- Canada accounted for less than 1% of India's total exports, while imports from Canada dropped by 2% to $4.4 billion in FY25.
- Canada's exports to India primarily consist of pulses, crude oil, fertilizers, aircraft, diamonds, and coal.
Future Cooperation
- The leaders discussed enhancing cooperation in clean energy, digital transformation, artificial intelligence, and other sectors.
- They emphasized the importance of a free and open Indo-Pacific region.
The Modi-Carney meeting highlighted the mutual desire for a "constructive and balanced" partnership, underpinned by strong people-to-people ties and economic complementarities.
