Mark Carney and Narendra Modi target Canada-India trade deal by year-end

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Canada’s Prime Minister Mark Carney and his Indian counterpart Narendra Modi have agreed to accelerate trade talks, aiming to seal an agreement by the end of the year as both countries seek to hedge their reliance on an unpredictable US administration.

The leaders met in New Delhi on Monday, where Carney announced the Comprehensive Economic Partnership Agreement that he said was aimed at doubling two-way trade to C$70bn ($51bn) by the end of the decade.

The agreement comes as Canada has sought to double non-US trade to C$300bn over a decade to counter President Donald Trump’s tariffs. Trade talks between the sides had started in 2010 but stalled amid a diplomatic falling-out after the murder of a Sikh-Canadian activist in Vancouver in 2023.

“This ambitious agreement will reduce barriers, increase certainty and unlock opportunity for exporters, investors and workers in both our countries,” Carney said.

“In the last decade, India has become the world’s fastest-growing major economy,” he added. “The most ambitious projects in clean energy, the digital economy and the next generation of AI talent are all here. Canada shares this ambition.”

Modi said the countries’ “next level partnership” would boost trade, defence, technology, energy and food security, and hailed the visit an “important milestone” in bilateral relations.

Carney landed in Mumbai on Friday, part of a regional tour that will include Australia and Japan, and followed his address to the World Economic Forum in Davos, where he called for a middle-power alliance to counter US disruption and boost trade.

He also visited China in January, where both sides agreed to slash levies on Canadian canola seed imports and Chinese electric vehicles.

Carney’s rapprochement with New Delhi follows an extraordinary diplomatic break-up after Ottawa accused the Indian government of involvement in the murder of Hardeep Singh Nijjar, a Canadian citizen and Sikh activist, on Canadian soil.

India has denied any involvement, but the fallout led to the suspension of trade talks and expulsions of diplomats, including India’s high commissioner.

Bilateral engagement has improved, with Carney meeting Modi on the sidelines of the G7 summit in India last year. Bilateral trade in goods was worth almost C$9bn in 2024, much of it in food and mineral oils from Canada and pharmaceuticals, machinery and equipment from India.

Canada’s services exports to India amounted to about C$13bn in 2024, the largest portion of which was travel by Indian students.

The two sides this week signed agreements to co-operate on critical minerals and clean energy, according to a Canadian statement. Cameco, Canada’s largest uranium producer, also agreed to a C$2.6bn deal to supply India’s nuclear energy industry, another priority of Modi’s.

Victor Thomas, president of the Canada-India Business Council, said energy and food were “very low-hanging fruit that we can pluck and trade”. He added that India was forecast to have huge growth in energy demand.

Carney met Tata Group chair Natarajan Chandrasekaran in Mumbai over the weekend. He was also accompanied by representatives from Canada’s public pension funds.

The Canada-India partnership has “historically underperformed, and has been in serious trouble over the last decade”, said C Raja Mohan, a visiting professor at the Institute of South Asian Studies in Singapore.

He added that the visit “completes the rebuilding of ties with the colonial cousins”.

Canada is home to almost one million Sikhs, the largest community outside India, some of whom have called for an independent homeland called Khalistan to be carved out of India’s Punjab region.

India views the Khalistan movement as terrorists and has accused Ottawa of harbouring violent extremists.

Carney’s predecessors Steven Harper and Justin Trudeau visited Punjab on past trips to India, but the prime minister has avoided it this week.

Canada’s foreign minister Anita Anand told reporters during the trip that “no country has a pass when it comes to domestic public safety”.