India-Canada Relations Post-2025 Canadian Elections

Context:

The Liberal Party has been recently re-elected in Canada with Mark Carney as the new Prime Minister. This marks a potential turning point in India-Canada relations with India extending a formal congratulatory message, signaling a rare positive engagement after over two years of diplomatic tensions.

Context of Strained Bilateral Relations

India-Canada relations have been strained since mid-2023 after Canada alleged Indian involvement in the killing of Khalistani separatist Hardeep Singh Nijjar. This led to the expulsion of senior diplomats and suspension of CEPA talks. Tensions were heightened by Canada’s perceived tolerance of pro-Khalistan activities, including from the former NDP leader, which India saw as undermining its sovereignty.
The new Canadian Prime Minister, previously Governor of the Bank of Canada and the Bank of England, has emphasized pragmatic diplomacy and trade diversification, including closer ties with India. His delayed condemnation of the Pahalgam terror attack was noted positively in India, while the NDP leader’s resignation following electoral losses removed a key hurdle to improved ties.

The Role of Public Perception and Diaspora Influence

The Indian diaspora in Canada, numbering around 1.8 million, continues to serve as a socio-cultural and economic bridge between the two nations. However, its influence has been tested by recent diplomatic disruptions.
Public perception in both countries has deteriorated. A December 2024 Angus Reid Institute survey showed that only 24% of Canadians considered India a “friendly” nation, compared to 52% in 2023.
In India, a CNN-IBN poll found that 33% of respondents viewed Canada favorably, while another 33% expressed neutrality. Additionally, declining student mobility from India to Canada highlights reduced people-to-people exchanges.

Strategic and Economic Outlook

Under the current leadership, there is renewed hope for the resumption of CEPA negotiations. With a background in global financial institutions, the new Canadian government is expected to prioritize trade and climate cooperation—areas where convergence with India is possible.
Canada’s upcoming hosting of the G7 Summit in Alberta presents a potential opportunity for renewed India-Canada interaction, particularly if India is invited as a special guest.
The Indian Opposition, including Congress MP Jairam Ramesh, has welcomed the leadership change, recalling the Prime Minister’s prior commitments to global climate action and multilateral cooperation.

India-Canada Bilateral Relations:

Bilateral Trade (2023): Approx. $12 billion, with the trade balance favouring India.
India’s Ranking: 10th-largest trading partner for Canada in 2022.
Share in Canada’s Global Trade: Only 1.95%, indicating untapped potential.
Key Indian Exports: Pharmaceuticals, gems and jewellery, textiles, and machinery.
Key Canadian Exports: Pulses, timber, pulp and paper, and mining products.
FDI: Canada is the 18th largest investor in India, investing about $3.3 billion between April 2000 and March 2023 (source: Invest India).
CEPA Negotiations: Ongoing technical negotiations for a Comprehensive Economic Partnership Agreement, covering trade, services, investment, and facilitation.

Conclusion

The 2025 elections in Canada offer a chance to recalibrate bilateral relations with India. While shared democratic values, economic interests, and diaspora linkages remain strong foundations, restoring mutual trust will require sustained diplomatic efforts, issue-specific compartmentalisation, and long-term strategic planning.