Canada and India rebuild trade ties after diplomatic collapse over assassination allegations

Overview

Sixteen months ago, Canada and India had no ambassadors in each other's capitals. Ottawa had accused New Delhi of orchestrating the assassination of a Canadian citizen on Canadian soil, and both countries expelled six of each other's diplomats in a single day. On March 2, 2026, Canadian Prime Minister Mark Carney and Indian Prime Minister Narendra Modi signed five agreements worth $5.5 billion, launched free trade negotiations, and set a target of increasing bilateral trade from $9 billion to $50 billion by 2030.

In This Story

3 Videos

5 People

Free trade agreement completed by year-end, trade surges toward $50 billion target

3 Context

Australia-China trade war and reset (2020-2024)

Key Indicators

$5.5B

Total deal value signed

Combined value of five memorandums of understanding spanning energy, minerals, technology, defense, and agriculture.

$2.6B

Cameco uranium contract

Nine-year agreement to supply 22 million pounds of uranium to India's nuclear program from 2027 through 2035.

~$9B → $50B

Trade target by 2030

Bilateral trade would need to grow roughly sixfold from current levels to hit the stated goal.

16 months

Duration without ambassadors

From October 2024 mutual diplomat expulsions to restoration of High Commissioners in mid-2025.

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People Involved

Mark Carney

Prime Minister of Canada (Leading Canada's trade diversification strategy)

Narendra Modi

Prime Minister of India (Co-architect of Canada-India reset)

Justin Trudeau

Former Prime Minister of Canada (Resigned as Liberal Party leader; no longer in office)

Hardeep Singh Nijjar

Sikh separatist leader and Canadian citizen (Deceased (killed June 18, 2023))

Subrahmanyam Jaishankar

India's External Affairs Minister (Active in diplomatic reset negotiations)

Organizations Involved

Cameco Corporation

Publicly traded uranium producer

Status: Signed $2.6 billion uranium supply deal with India

The world's largest publicly traded uranium company, headquartered in Saskatoon, Saskatchewan, and the second-largest uranium producer globally.

Royal Canadian Mounted Police (RCMP)

Federal law enforcement agency

Status: Leading the Nijjar murder investigation

Canada's national police force, which has charged four suspects in the Nijjar killing and publicly alleged a broader Indian government campaign of violence against Sikh activists on Canadian soil.

Timeline

Canada and India sign $5.5 billion in deals, launch free trade talks
Trade

Carney and Modi signed five MOUs at Hyderabad House covering energy, critical minerals, technology, defense, and agriculture. The centerpiece was a $2.6 billion Cameco uranium supply contract. Both leaders set a target of $50 billion in bilateral trade by 2030.
Today
Carney arrives in India for first bilateral visit by Canadian PM since 2018
Diplomatic

Carney began his visit in Mumbai with business engagements before traveling to New Delhi for government-level talks.
3 days ago
India passes the SHANTI Act, opening nuclear sector to private investment
Policy

India's parliament replaced its 1962 Atomic Energy Act, for the first time allowing private companies to build and operate nuclear power plants. The law underpinned India's demand for imported uranium.
December 1st, 2025
Canada and India agree to relaunch CEPA negotiations
Trade

After a Trade and Investment Ministerial Dialogue, both countries committed to reviving the stalled free trade talks that had been dormant since 2017.
November 23rd, 2025
Carney and Modi meet at G7 summit in Alberta
Diplomatic

The first bilateral meeting between the leaders took place at the G7 summit in Kananaskis. Both sides agreed to restore full diplomatic representation and resume dialogue.
June 17th, 2025
Mark Carney sworn in as Prime Minister of Canada
Political

The former central banker replaced Justin Trudeau, bringing a different approach to the India relationship: pragmatic compartmentalization rather than public confrontation.
March 14th, 2025
Trump imposes 25 percent tariffs on Canadian goods
Trade

The United States imposed sweeping tariffs on all Canadian imports, threatening an economy that sends roughly 75 percent of its exports south. The tariffs created urgent pressure for Canada to find alternative trade partners.
February 1st, 2025
Canada and India expel six diplomats each
Diplomatic

Canada expelled Indian High Commissioner Sanjay Kumar Verma and five other diplomats, declaring them persons of interest. India expelled six Canadian diplomats including the acting High Commissioner. Both countries were left without top-level representation.
October 14th, 2024
RCMP arrests three suspects in Nijjar murder
Legal

Karan Brar, Kamalpreet Singh, and Karanpreet Singh were arrested and charged with first-degree murder and conspiracy.
May 1st, 2024
Mutual diplomat expulsions begin
Diplomatic

Canada expelled one Indian diplomat; India expelled one Canadian diplomat in retaliation and suspended visa processing for Canadian nationals.
September 19th, 2023
Trudeau accuses India of links to Nijjar killing
Diplomatic

Prime Minister Trudeau told Parliament that Canadian intelligence had "credible allegations" linking Indian government agents to the assassination. India called the claims "absurd and motivated."
September 18th, 2023
Hardeep Singh Nijjar shot dead in Surrey, British Columbia
Incident

Nijjar, a Sikh separatist leader and Canadian citizen, was killed in the parking lot of the Guru Nanak Sikh Gurdwara. India had designated him a terrorist in 2020; Canada did not recognize that designation.
June 18th, 2023
Canada and India launch CEPA trade negotiations
Trade

Both countries formally begin negotiating a Comprehensive Economic Partnership Agreement in New Delhi. Ten rounds of talks follow through August 2017 before stalling.
November 16th, 2010

Scenarios

Free trade agreement completed by year-end, trade surges toward $50 billion target

Discussed by: Bloomberg, the Globe and Mail, and India's Business Today have cited the mutual economic pressures (American tariffs on Canada, Chinese mineral dominance facing India) as strong incentives for a rapid deal

Both governments face external pressure that makes a deal urgent: Canada needs markets beyond the United States, and India needs secure uranium and critical mineral supplies outside Chinese influence. If negotiators can resolve longstanding disagreements over agricultural market access, dairy tariffs, and intellectual property protections, a Comprehensive Economic Partnership Agreement could be finalized by late 2026. The Cameco uranium contract and critical minerals MOU would then serve as anchors for a much larger trade expansion. This scenario requires sustained political will and the Nijjar trial not producing revelations that force either government's hand.

Nijjar trial evidence derails the diplomatic reset

Discussed by: Al Jazeera, Global News, and Canadian legal analysts have flagged the government's attempt to suppress evidence as a sign that intelligence material could implicate Indian officials more directly than public statements have acknowledged

Canada's Attorney General has already moved to suppress evidence from the Nijjar murder trial on national security grounds. If the court rejects that application, or if details leak, the proceedings could produce evidence directly linking senior Indian officials to the assassination. Sikh community organizations and opposition politicians are already pressing for accountability. A sufficiently damaging revelation could make the diplomatic reset politically untenable for Carney, forcing a reversal or pause in trade negotiations even as economic incentives push in the opposite direction.

CEPA talks stall on market access, deals remain limited to energy

Discussed by: Trade policy analysts at the Asia Pacific Foundation of Canada and India Briefing have noted that ten rounds of CEPA talks between 2010 and 2017 failed to produce an agreement, citing deep structural disagreements

Canada-India free trade negotiations have failed before. India's agricultural protections, dairy tariff regime, and pharmaceutical patent rules clashed with Canadian positions across a decade of prior talks. The year-end deadline is ambitious given that the terms of reference were only just signed. If negotiations bog down on the same issues that stalled them previously, the relationship may stabilize around energy deals and critical minerals cooperation without achieving the broader $50 billion trade target. This would still represent a significant improvement from the 2024 nadir but fall well short of the announced ambitions.

US tariff reduction removes Canada's urgency to diversify, India engagement slows

Discussed by: The Washington Post and The Conversation have framed Canada's India outreach as primarily a response to American tariffs, raising the question of what happens if that pressure eases

If the United States reduces or removes tariffs on Canadian goods, the economic urgency driving Canada's trade diversification would diminish significantly. With 75 percent of Canadian exports historically flowing south, the gravitational pull of the American market is strong. In this scenario, the political costs of managing the Nijjar fallout could outweigh the economic benefits of the India relationship, and the ambitious CEPA timeline could quietly slip without being formally abandoned.

Historical Context

Australia-China trade war and reset (2020-2024)

May 2020 - December 2024

What Happened

After Australia called for an investigation into COVID-19 origins, China imposed tariffs of up to 206 percent on Australian wine, 80 percent on barley, and unofficial bans on coal, beef, lobster, and other exports. The trade war cost Australia over AU$5 billion in lost revenue. Relations were frozen for roughly two years.

Outcome

Short Term

The election of Anthony Albanese in May 2022 created political space for re-engagement. China progressively lifted restrictions through 2023-2024 after high-level meetings resumed.

Long Term

Trade normalized, but Australia accelerated its own trade diversification and deepened security commitments through AUKUS. The episode became a template for how a change of government can enable a diplomatic reset.

Why It's Relevant Today

The mechanism is nearly identical: a new leader (Albanese/Carney) replaced the one who initiated the confrontation (Morrison/Trudeau), providing political cover to re-engage without appearing to capitulate. Both cases were also accelerated by external pressure from a third party.

Japan-South Korea trade dispute and reconciliation (2019-2023)

July 2019 - March 2023

What Happened

After South Korea's Supreme Court ordered Japanese companies to compensate wartime forced laborers, Japan restricted exports of three chemicals critical to South Korean semiconductor manufacturing and removed Seoul from its trusted trade partner list. The dispute threatened supply chains for Samsung and other major chipmakers.

Outcome

Short Term

South Korean President Yoon Suk-yeol, elected in 2022, proposed that a Korean foundation would compensate victims instead of Japanese companies, breaking the impasse. Japan restored trade preferences.

Long Term

The two countries resumed intelligence sharing, held their first summit in 12 years, and joined a trilateral summit with the United States at Camp David in August 2023.

Why It's Relevant Today

External security threats, including North Korea's missile tests and China's military expansion, made reconciliation strategically necessary despite unresolved historical grievances. For Canada and India, American tariffs and Chinese mineral dominance play an analogous role, pushing both countries to prioritize economic partnership over bilateral disputes.

US-Saudi Arabia tensions after the Khashoggi killing (2018-2025)

October 2018 - November 2025

What Happened

After journalist Jamal Khashoggi was murdered inside the Saudi consulate in Istanbul in October 2018, US intelligence concluded that Crown Prince Mohammed bin Salman ordered the killing. President Biden vowed to make Saudi Arabia a "pariah state" and released the intelligence assessment publicly upon taking office.

Outcome

Short Term

Biden visited Saudi Arabia in July 2022 after Russia's invasion of Ukraine made Saudi oil production capacity strategically critical, resulting in a widely criticized meeting with the Crown Prince.

Long Term

The relationship was fully restored under a subsequent administration, pivoting from oil-for-security to technology partnerships. The Khashoggi case was never resolved, only set aside.

Why It's Relevant Today

The closest parallel to Canada-India. In both cases, a killing attributed to a foreign government created a moral and diplomatic crisis. In both cases, strategic and economic imperatives eventually overrode demands for accountability. And in both cases, the underlying questions were compartmentalized rather than answered.