Canada, India look to reset ties in counter to Trump's duties

Canada and India are taking steps to cool an escalation of diplomatic tensions that included harsh accusations and recriminations as both sides look to strengthen trade ties to counter US tariff threats.

The two countries are considering sending back envoys after tit-for-tat expulsions last year, according to people familiar with the matter, who asked not to be identified as the discussions are private.

Canada's intelligence chief Daniel Rogers also participated in an intelligence conclave hosted by India's National Security Adviser Ajit Doval last week in New Delhi. A meeting between Indian Prime Minister Narendra Modi and his Canadian counterpart on the sidelines of the Group of Seven summit in Alberta in June cannot be ruled out, the people said. India is an observer to the G-7.

The rift between Canada and India started in September 2023 when then-Prime Minister Justin Trudeau accused Indian officials of masterminding the assassination of prominent Sikh activist Hardeep Singh Nijjar, a Canadian citizen. Modi's government denied any involvement, calling the accusations "absurd." Nijjar was fatally shot in British Columbia in 2023.

Canada's new leader, Mark Carney, took office in March, presenting an opportunity to reset the relationship, a Canadian official said. Ottawa has been seeking better ties with New Delhi for months — contingent on respect for Canada's laws — and the approach has not changed since Trudeau left office, the official added.

The easing in tensions come as both India and Canada are being targeted by US President Donald Trump with higher tariffs and expect to see jolts to their economies when sweeping duties take effect on April 2. Many countries are looking to bolster ties with other trading partners to offset the possible slide in US trade.

"What Canada will be looking to do is to diversify our trading relationships with like-minded countries, and there are opportunities to rebuild the relationships with India," Carney told reporters on March 4, days before he won a race to succeed Trudeau as leader of Canada's Liberal Party.

To be sure, there are still frictions between the two countries. The Globe and Mail reported on Tuesday that Indian agents allegedly meddled to support the campaign of Pierre Poilievre to become Conservative leader in 2022. Carney and Poilievre are in a tight race for next month's election.

Poilievre has dismissed the media report, noting there was no evidence that he or his inner circle were aware of the alleged effort. The report also said India had attempted to cozy up to politicians of all parties. India's Ministry of External Affairs didn't immediately respond to a request for comment.

Criminal Gangs

A team of the Royal Canadian Mounted Police visited New Delhi to meet India's federal anti-terror and anti-money laundering officials in January, according to people familiar with the matter. The two sides discussed organized criminal gangs and the Sikh separatist movement, they said.

In October, Trudeau accused Indian diplomats of "supporting criminal activity against Canadians here on Canadian soil." The RCMP broadened the allegations against India and accused the country's diplomats of involvement in multiple homicides and extortion.

New Delhi refused to waive the officials' diplomatic immunity for questioning, leading Canada to expel India's high commissioner and five other officials. India responded by kicking out six Canadian diplomats, which were in addition to the 41 officials it ousted in 2023 over the Nijjar murder accusations.

Global Affairs Canada didn't immediately respond to requests for comment and the RCMP declined comment.

Although trade between Canada and India is small — amounting to $8.4 billion in the Indian fiscal year ended in March 2024 — Canada is a major supplier to India of potash, a fertilizer critical to the agricultural sector. It also supplies timber, paper and mining products. India supplies Canada with pharmaceuticals, gems and jewelry, textiles, and machinery.

Canadian pension funds, with a cumulative investment of $55 billion, have put money in Indian sectors including infrastructure, renewable energy and financial services. Talks toward a trade pact broke off in 2023 just before Trudeau's public allegations.

"The downturn in India-Canada relations was caused by the license that was given to the extremist and secessionist elements in that country," Randhir Jaiswal, spokesperson for India's Ministry of External Affairs, told reporters last week. "Our hope is that we can rebuild our ties based on mutual trust and sensitivity."