Carney’s India strategy promises many benefits

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Sanjay Ruparelia is the Jarislowsky Democracy Chair at Toronto Metropolitan University and a senior fellow of the Asia Pacific Foundation of Canada.

Mark Carney’s visit to India, the first since Justin Trudeau went in 2018, capped mounting efforts to recalibrate bilateral relations. The optics and substance of this trip could not be more different than the previous one: a large delegation of cabinet ministers and business executives on a tight itinerary, focused on seizing economic opportunities and deepening strategic ties, with the hope of reaching a Comprehensive Economic Partnership Agreement within a year.

Senior cabinet ministers and government officials have engaged repeatedly with India since Mr. Carney and Narendra Modi met at the G7 meeting in June, 2025. Still, it was hard to envisage such ambition a year ago. What are its prospects?

Carney says he raised foreign interference concerns in ‘frank’ talk with Modi

The potential benefits are clear. The $2.6-billion agreement to supply Canadian uranium to India’s civil nuclear industry underscored the significance of the energy sector as an export market for Canada. Des­pite massive new invest­ments in solar and wind, and a relatively small per capita carbon footprint, India still relies on coal for three-quarters of its elec­tri­city generation.

A series of memorandums also pledged co-operation in agri-food processing, artificial intelligence, critical minerals, space exploration and the life sciences. New university partnerships – to promote research, training and innovation through scholarships, faculty exchanges and joint programming – are noteworthy, too.

Our previous reliance on international students to compensate for inadequate government funding to postsecondary institutions was ill-conceived. The biggest source was India. The recent imposition of severe caps on new visas shuttered many programs and tarnished our reputation. Collaborative projects in the natural sciences and advanced technology can meet pressing challenges and revive trust. That said, navigating the future requires commensurate investments in the humanities and social sciences.

Carney secures $2.6-billion uranium supply deal with India, launches talks on trade deal

The prospects of Ottawa and New Delhi signing a comprehensive economic agreement are far better now, too. The modest level of bilateral trade, dominated by food and mineral oil exports to India, and pharmaceuticals, machinery and equipment to Canada, makes it feasible. And their mutual need to increase leverage vis-à-vis the U.S. creates urgent incentives.

Canada remains far more dependent on the U.S. market than India. Yet India’s dramatic shift regarding trade agreements shapes the prospects of a deal with Canada to a greater extent.

Mr. Modi promised millions of good jobs through rapid industrialization when he won office in 2014. Physical infrastructure expanded. Multinational companies, led by Apple and Foxconn, opened new plants. Yet the government’s Make in India campaign has faltered. Investment is sluggish. Employment and manufacturing flatlined over the last decade. Higher tariffs and regulatory barriers raised the cost of inputs, discouraged foreign companies seeking to diversify their supply chains and favoured domestic conglomerates. The punitive levies imposed by Donald Trump last summer hit labour-intensive sectors hard.

In response, recent budgets harmonized taxes, cut rates and rationalized labour codes. In January, India finalized a pact with the EU, almost 20 years after negotiations began. The agreement slashed tariffs on more than 95 per cent of EU exports over the coming decade. In exchange, Brussels granted preferential entry to more than 99 per cent of Indian exports.

In the short run, the deal will likely change little, given the high-level of intra-EU trade. Both sides protected sensitive agricultural sectors. And several issues might upend ratification. The introduction of carbon border taxes by the EU and imposition of its intellectual property regime worries industrial producers and the pharmaceutical industry in India. Nonetheless, the deal is the most ambitious the latter has ever reached, surpassing recent deals with Britain, Australia and New Zealand. Comparing these agreements will be instructive for negotiators in Ottawa.

Carney aiming to complete trade deal with India by year’s end

Finally, since Mr. Carney and Mr. Modi met in the summer, both governments say their law enforcement agencies and national security officials are co-operating to address respective concerns. In June, CSIS stated that Indian foreign interference remained a persistent threat, yet noted that some Khalistan groups were promoting violence abroad. In September, Ottawa designated the Bishnoi gang, accused of widespread intimidation, extortion and violence, a terrorist entity.

Yet last week, Sikh organizations, Liberal parliamentarians and former security officials rebuffed claims by a senior government official that India was no longer interfering. The criminal investigation into the murder of Hardeep Singh Nijjar remains unresolved. India has repeatedly denied any involvement. More than 50 per cent of Canadian survey respondents support economic negotiations with India. Yet almost 60 per cent held unfavourable views of the country and thus backed “cautious re-engagement.”

The dual track strategy of the Carney government has made genuine progress in securing co-operation and reviving ties. Yet it is hostage to events. What the courts reveal, and how both governments react, will be decisive.