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

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

Money Moves

Canada and India's fastest diplomatic turnaround in recent memory: $5.5 billion in deals and new free trade talks.

March 2nd, 2026: Canada and India sign $5.5 billion in deals, launch free trade talks

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.

The reversal was driven less by resolution than by realpolitik. American tariffs of 25 percent on Canadian goods made diversifying away from the United States an existential priority for Ottawa. India's ambitious plan to reach 100 gigawatts of nuclear capacity by 2047 created urgent demand for Canadian uranium.

The assassination case hasn't been resolved. The two governments have compartmentalized it—a murder trial proceeds under a publication ban while they pursue new trade and investment agreements.

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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

Organizations Involved

Timeline

November 2010 March 2026

13 events Latest: March 2nd, 2026 · 3 months ago Showing 8 of 13
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  1. Canada and India sign $5.5 billion in deals, launch free trade talks

    Latest 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.

  2. 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. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. Mutual diplomat expulsions begin

    Diplomatic

    Canada expelled one Indian diplomat; India expelled one Canadian diplomat in retaliation and suspended visa processing for Canadian nationals.

  10. 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."

  11. 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.

  12. 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.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

May 2020 - December 2024

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

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.

Then

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.

Now

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 this matters now

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.

July 2019 - March 2023

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

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.

Then

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.

Now

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 this matters now

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.

October 2018 - November 2025

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

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.

Then

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.

Now

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 this matters now

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.

Sources

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