Prime Minister Mark Carney speaks at the Canada-India Growth and Investment Forum in Mumbai on Saturday.Adrian Wyld/The Canadian Press
Prime Minister Mark Carney said he aims to wrap up a trade agreement with India by the end of the year.
A comprehensive deal with the country of 1.4 billion people would be more proof that Mr. Carney’s efforts to repair a diplomatic rupture with New Delhi had borne fruit.
Speaking to a crowd of about 100 business investors and executives in India’s financial capital of Mumbai Saturday, the Prime Minister said his visit marks the end of a “challenging period” in Canada-India relations and the beginning of a new, “more ambitious partnership” with the world’s fifth-biggest economy.
Canada and India are emerging from a two-way diplomatic freeze of more than two years triggered when former prime minister Justin Trudeau accused New Delhi of a role in the 2023 murder of a Canadian Sikh activist. In 2024, Canada expelled six Indian diplomats including its top envoy in Ottawa, blaming them for being part of a campaign of violence against Canadians.
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Canada’s U-turn on relations with India comes as Mr. Carney’s government is under pressure to clarify remarks from a senior official who told reporters in a background briefing last week that India is no longer involved in conducting foreign interference and transnational repression in Canada. The Globe and Mail is not identifying the official because they were not authorized to speak publicly on the matter.
Security experts immediately challenged this assertion, saying it’s not true. Liberal MPs Sukh Dhaliwal and Ruby Sahota also pushed back, with Ms. Sahota releasing a statement over the weekend saying that “any suggestion these threats have been resolved does not reflect the current security reality facing Canada.”
Foreign Affairs Minister Anita Anand declined to say whether she agreed that India has ceased meddling in Canada but said no country gets a free pass to conduct foreign interference in Canada. A public inquiry last year reported that India was the “second most active country engaging in electoral foreign interference in Canada” after China.
New Delhi’s current envoy to Canada, Dinesh Patnaik, however, told reporters in Mumbai Saturday that his country’s position is that India never interfered in Canadian politics or society. “It’s not a question of ‘it is no longer happening.’ It never happened,” Mr. Patnaik said. “It’s a problem Canada has to resolve itself. We are there to help you.”
Speaking to the business crowd Saturday, Mr. Carney said the breakdown of the rules-based international order has ushered in a “more volatile global era” where great powers are using economic coercion to bully smaller countries.
Mr. Carney said it’s understandable that nations are concluding that they need more independence and self-reliance, borrowing a term – “strategic autonomy” – that India uses to define its foreign policy.
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India’s foreign policy of “strategic autonomy” means engaging with competing powers to serve the national interests instead of aligning with any single global power bloc.
“Building true strategic autonomy requires diversification, not isolation,” the Prime Minister said.
“It creates enormous opportunities for India and Canada to work together, to limit risks, to increase prosperity, and to build sovereignty.”
Goldy Hyder, Business Council of Canada CEO, said he’s encouraged by how fast Canada and India want to move to conclude a trade deal.
The bilateral opportunities for infrastructure in particular are enormous in both countries, he said.
“Today, in India alone over 20 international airports are to be constructed as well as a couple of hundred domestic ones.”
In a nod to significant foreign-policy differences between India and Canada, Mr. Carney in his Mumbai speech said Ottawa can work with partners even if it sometimes disagrees with them.
India, for instance, has a friendly relationship – and robust energy and arms trade – with Russia. Mr. Modi played host to Russian President Vladimir Putin last December and praised their “deep and unbreakable relationship.”
By comparison, Canada has spent more than $25-billion in recent years to help its ally Ukraine fight off Russia’s full-scale invasion, which began in 2022.
The Prime Minister said his approach is values-based realism that is both pragmatic and principled, “recognizing that progress is often incremental, that interests of nations can diverge, and that not every partner will share all our values.”
“We are actively taking on the world as it is, not passively waiting for a world we wish to be,” said Mr. Carney.
He pitched the Mumbai audience on Canada’s energy riches as well as tax rates and red-tape reductions by his government.
The Prime Minister said Canada’s capacity to export liquefied natural gas to Asia is expected to increase by more than 50 million tonnes in the coming years.
He highlighted low taxes to Indian investors, saying he’s cut Canada’s “marginal effective tax rate for new investment” to 13 per cent.
“That’s 4.5 per cent lower than the United States and about half the G7 average.”
He said Canada and India are natural partners given that two million Canadians trace their roots to India, “including leaders in business, science and government.”
He played up the ability of Canadian-based companies to access the U.S. market, saying “beyond the threats and away from headlines, we retain the best trade deal with the United States: Our average tariff rate is less than 5 per cent and more than 85 per cent of our trade enters the U.S. tariff free.”
Canada is now behind its peers in terms of preferential trade access to India. The diplomatic deep freeze with New Delhi prompted Ottawa to shelve trade negotiations in 2023.
In the past four years, many of Canada’s trading rivals have struck deals with New Delhi that reduce the costs and barriers to selling goods and services to India – eliminating much of the tariffs the Indians charge on their imports.
This includes the 27-member European Union, New Zealand and Britain, as well as the four-country European Free Trade Association, which includes Norway and Switzerland. U.S. President Donald Trump this month struck an interim trade pact with India and an agreement to negotiate a more comprehensive deal later.