Mark Carney’s rise to power in Canada signifies a potential shift in the country’s strained ties with India. As he prepares to take over from Justin Trudeau, Carney has already expressed his desire to rebuild the relationship between the two nations. His background as a central banker and his deep understanding of global trade could help him take a pragmatic approach to diplomacy, something that had been sorely lacking in recent years. Under Trudeau, relations between India and Canada hit an all-time low. The breaking point came when Trudeau accused India of involvement in the killing of Khalistani separatist Hardeep Singh Nijjar. India outright rejected the claim, and both countries expelled diplomats in a diplomatic standoff. A planned trade agreement was put on hold, and the hostility only deepened. What had once been a promising relationship, with strong trade, education, and migration ties, turned into a cold and distant one. Carney’s leadership now presents an opportunity for both sides to reset the tone.
Carney has made it clear that he sees trade diversification as a key strategy for Canada, especially in light of US President Donald Trump’s aggressive stance on tariffs and trade policies. India, as one of the world’s fastest-growing economies, is an obvious partner. Carney’s past experience leading the Bank of Canada and the Bank of England, as well as his role in Brookfield Asset Management— which has significant investments in India’s real estate and infrastructure sectors—means he is no stranger to the importance of India to Canada’s economic future. India has fair enough reasons to welcome a thaw in relations. Canada remains one of the top destinations for Indian students and immigrants, and any improvement in diplomatic ties could ease concerns over visa restrictions and immigration policies. At a time when India is actively strengthening its global partnerships, a renewed relationship with Canada could be beneficial. However, New Delhi is unlikely to forget the tensions of the past year so easily. It will expect Ottawa to take meaningful steps to rebuild trust, including ensuring that Canada does not become a haven for separatist elements that threaten India’s sovereignty. This is where the real catch lies. It is not certain how long Carney will last in office, given that he is bound to call for general elections sooner than later. Nevertheless, India will have to recalibrate its Ottawa orientation in a manner that is not fixated on a particular leader, but rather permanent and long lasting.
Carney’s immediate challenge is not just foreign policy but also domestic politics. He will take charge of a deeply divided Liberal Party, and with the Conservatives leading in the polls, he must prove that he can hold the government together and win a general election. His biggest political opponent, Pierre Poilievre, has been critical of the Liberal government’s past failures and will seize any opportunity to attack Carney on economic and foreign policy matters. Meanwhile, the looming threat of Trump’s return to the White House adds another layer of uncertainty, with trade tensions between Canada and the US likely to intensify in coming weeks.
Carney’s entry into Canadian politics is historic, as he is the first person to take over as prime minister without prior electoral experience. But in many ways, his background as a financial leader could prove to be an asset. If he applies his pragmatic, problem-solving mindset to diplomacy, there is a real chance for Canada and India to move past their recent hostilities and work toward a stronger partnership. The road ahead is not easy, but the potential for renewed cooperation is certainly there.