From trade to immigration – what does anti-Trump Canadian PM Mark Carney mean for India - ‘shared democratic values’

Mark Carney, a former central banker, has led the Liberal Party to victory in the Canadian federal elections. This win could signal a reset in the strained India-Canada relationship.

Canada's Liberal Party has won a fourth consecutive election, giving a mandate to Carney after a campaign with a pledge to boost economic growth and stand up to US President Donald Trump in the global trade war.

In his victory speech before supporters in Ottawa, Carney stressed the importance of Canadian unity in the face of the threats coming from Washington under President Trump, who has even expressed interest in making Canada the 51st state of the US.

“We are over the shock of the American betrayal, but we should never forget the lessons,” Carnay said, reiterating his campaign remarks about the mutually beneficial system Canada and the US had shared since World War II had ended.

Impact on ties with India

The India-Canada relations have been strained in recent years, especially under the leadership of former Prime Minister Justin Trudeau, who resigned in January, paving the way for Mark Carney. Before the latest victory, Carney was sworn in as the 24th prime minister of Canada on March 14, 2025.

Prime Minister Narendra Modi was among the first global leaders to congratulate Carney for his win."India and Canada are bound by shared democratic values, a steadfast commitment to the rule of law, and vibrant people-to-people ties. I look forward to working with you to strengthen our partnership and unlock greater opportunities for our people,” Modi said in a post on X.

Carney, a political newcomer, had recently described himself as the ‘most useful in a crisis.’ In his campaign, he identified rebuilding ties with India as a priority, signalling a reset in relations between the two nations.

“What Canada will be looking to do is to diversify our trading relationships with like-minded countries, and there are opportunities to rebuild the relationship with India. There needs to be a shared sense of values around that commercial relationship, and if I am Prime Minister, I look forward to the opportunity to build that,” he had said, signalling a departure from the strained diplomatic relationship under Justin Trudeau’s leadership.

As things stand, India remains a key strategic partner in Carney’s plans for Canada’s global economic and political engagement, especially given his emphasis on diversifying trade and engaging with like-minded nations.

Strained relations with India

India-Canada relations have been strained since 2023 over allegations by then Trudeau government implicating ‘Indian agents’ in the killing of Hardeep Singh Nijjar, a Canadian citizen and a Khalistani terrorist, outside a gurdwara in Surrey, British Columbia, in June 2023.

In October 2024, ties nosedived further when Canada expelled six Indian diplomats. India denied any involvement in Nijjar's killing and condemned the accusations as baseless. Subsequently, both countries expelled top envoys, froze trade negotiations, and suspended official visits.

India has been accusing Canada of harbouring extremism in Canada's Sikh diaspora. Under these circumstances, Carney's victory is being watched closely. The win, experts say, has opened the door for a diplomatic reset, as Carney is seen as more forthcoming than his predecessor, Trudeau.

New Delhi views any support for Khalistani elements abroad as a threat to national security. Trudeau was seen as a leader unwilling to act on Indian concerns.

Exit Trudeau, Enter Carney

With Trudeau’s exit in January, there has been a hope that the influence of extremist Sikh elements in India-Canada relations will decline. The Union Ministry of External Affairs is already considering restoring the Indian High Commissioner to Canada, which would be a significant step in normalising diplomatic engagement, some reports have suggested.

As the election campaign ended last week, Carney described that relationship with India as ‘incredibly important.’

“There are strains on that relationship that we didn’t cause, to be clear, but there is a path forward to address those with mutual respect and to build out,” he said as quoted by Hindustan Times. Carney, however, didn't address the festering matter of Nijjar’s killing, but suggested differences which led to the cratering of ties could be resolved.

Immigration and Workforce

India is one of the largest sources of immigrants to Canada. The Indo-Canadian community has about 2.8 million temporary workers, students, or permanent residents.

The number of Indian students heading to Canada has dropped sharply, with many affected by the real estate crisis, stricter immigration rules, and tensions between New Delhi and Ottawa.

Data from the Bureau of Immigration shows that Canada saw the biggest fall, with numbers dropping by 41 per cent, from 233,532 in 2023 to 137,608 in 2024. While diplomatic relations worsened during Trudeau’s term, immigration numbers from India remained high.

Carney is expected to maintain this policy track, particularly for skilled professionals, tech workers, and students. India has also been a major contributor to Canada’s skilled workforce. Under Carney, immigration policies are expected to remain favourable, particularly for skilled professionals and students.

With his economic background, Carney is expected to support policies attracting top talent to bolster Canada’s workforce.

A more stable diplomatic relationship between Canada and India could increase the number of student and work visas and smoother processing of permanent residency applications. The anticipated reset in relations is also expected to see the return of cooperation in recognising Indian credentials.

The Trade Factor

The strained ties between India and Canada had stalled the Comprehensive Economic Partnership Agreement (CEPA). This trade deal, which had been under negotiation for years, was shelved following the Nijjar allegations and the political fallout. Carney's remarks indicate that the CEPA will be revived.

In 2023, bilateral trade between the two nations stood at 13.49 billion Canadian dollars. The two nations showed intentions previously to expand cooperation in Artificial Intelligence (AI), fintech, green energy and higher education. 

Partnerships in these areas might regain attention in Carney’s regime. Both India's and China's economies look to reduce dependence on China and the US.

Earlier, Carney made it clear that he intends to expand trade partnerships, particularly with countries that align with Canada’s economic goals. 

“What Canada will be looking to do is to diversify our trading relationships with like-minded countries, and there are opportunities to rebuild the relationship with India,” he said in one of the media interactions.