After a prolonged period of severely strained relations, India and Canada are now pivoting toward rebuilding their bilateral partnership, with a focus on economic complementarities and shared strategic interests, according to a new analysis by India's former High Commissioner to Canada, Sanjay Kumar Verma, published in India Narrative.

Diplomatic Signals of a Reset

The visits of Canadian Foreign Minister Anita Anand and International Trade Minister Maninder Sidhu to India — preceded by security consultations between David Morrison and National Security Adviser (NSA) Ajit Doval — signal a determined effort to rebuild bilateral confidence. Notably, the report underscores that the objective should not be to simply restore the pre-rupture relationship, but to construct a more resilient partnership with structural safeguards against a repeat of the 2024 diplomatic crisis.

Economic Foundations: What Each Side Brings

The report identifies compelling economic incentives on both sides. India offers a large and expanding market, growing industrial capacity, and a maturing technology ecosystem — presenting Ottawa an opportunity to diversify its trade and investment base beyond its near-total dependence on the United States. Canada, in turn, brings strengths in energy, critical minerals, agriculture, aerospace, advanced technologies, education, and institutional investment. Both nations, the report argues, have strong reasons to diversify supply chains and strengthen economic resilience.

Political Framework: From G7 to CEPA

The political foundation for the current phase was laid during Prime Minister Mark Carney's visit to India from 27 February to 2 March 2026, following renewed engagement between Carney and Prime Minister Narendra Modi at the G7 summit in 2025. The two leaders supported the reconstitution of the India-Canada CEO Forum, a Finance Ministers' Economic and Financial Dialogue, deeper security cooperation, and regular trade and investment engagement — mechanisms designed to sustain cooperation even during periods of political disagreement.

In a telephone conversation on 13 October, Modi and Carney reaffirmed their commitment to concluding the Comprehensive Economic Partnership Agreement (CEPA) at the earliest opportunity. Modi's anticipated visit to Canada in December could provide a further opportunity to demonstrate that the reset is producing tangible results. According to the report, the political framework is now in place; implementation will ultimately determine its credibility.

Early-Warning Mechanism: Lesson from 2024

Drawing on the experience of the 2024 diplomatic fallout, the report highlights the need for a structured early-warning mechanism. Designated senior officials should be empowered to communicate emerging concerns promptly, assess implications, and escalate unresolved issues to national security advisers or foreign ministers. Regular reviews and agreed procedures for information-sharing, the report argues, could prevent misunderstandings from spiralling into wider crises — without eliminating disagreements entirely.

Khalistan Extremism: A Shared Security Concern

For India, the activities of pro-Khalistan extremist organisations operating from Canadian territory have long been a core concern. The report stresses that the legitimate question is whether Canadian territory is being used to facilitate intimidation, violence, or other unlawful activities directed against India's sovereignty and territorial integrity. Significantly, the report cites the Canadian Security Intelligence Service (CSIS) in its '2025 Public Report', which identified the continuing involvement of Canada-based Khalistani extremists in violent extremist activities as a national security threat to Canada itself — not merely to India. This framing repositions the Khalistan issue as a shared security challenge rather than a bilateral grievance.

As both capitals move toward institutionalising the reset, the depth and durability of the renewed partnership will hinge on whether economic commitments translate into signed deals and security cooperation becomes reciprocal and verifiable.