- Nov 01, 2025
- Nakshatra Jagannath & Dr A Adityanjee
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Indo-Canada Reset 2025: The Lotus and the Maple Bloom Again
Background India-Canada relations have never been great since the time of the bombing on June 23rd, 1985, of the Air India flight 182 (Kanishka) with the deaths of 329 passengers over the Atlantic Ocean by Sikh-Canadian terrorists espousing the cause of a mythical, so-called Khalistan. Successive Canadian administrations, both liberal and conservative, have focused more on domestic vote-bank politics, garnering Sikh-Canadian votes at the expense of maintaining good relations with India. Canada’s membership in the G-7 and the “Five Eyes” Anglo-Saxon Alliance tinged successive Canadian administrations’ worldview with a sense of diplomatic arrogance and racial superiority. The deep dive into Indo-Canadian affairs began in 2019, during Trudeau’s week-long trip to India, ostensibly to boost international trade but involving extra-territorial electioneering by way of selective photo-ops at the Golden Temple, Amritsar, and other Sikh shrines, sometimes in the company of shady characters and terror suspects. Following the national elections of 2019, Trudeau’s coalition government survived on the parliamentary support of Pro-Khalistan Jagmeet Singh and his New Democratic Party (NDP). The policy formulations of the Trudeau administration necessitated appeasement of the Pro-Khalistan Sikh-Canadian lobby for its own survival. The Historic Low of 2023: The year 2023 marked a historic low for India-Canada relations, driven by the anti-India campaign led by former Canadian Prime Minister Justin Trudeau, based on allegations of “credible intelligence” that were never shared. Trudeau's actions grew amid increasing differences in security and cooperation between the leadership of the two democracies. This ultimately resulted in recalling top diplomats, reducing consular services, limiting people-to-people interactions and opportunities, and obstructing the free-trade agreement envisioned in earlier years. The main disputes between the Modi-led Indian government and the Trudeau-led Canadian government stemmed from India’s stance on the Khalistan issue and Canada's harbouring of anti-India sentiments, alongside Canada's denial and accusations against India for the alleged murder of Sikh-Canadian citizen and proclaimed offender Hardeep Singh Nijjar in India, on Canadian soil. Despite Trudeau’s loud declaration in the Canadian parliament about having allegations of “credible intelligence”, his government failed to provide any concrete evidence to India for nearly two years. This not only led to murky arrest warrants being issued by Canada against top Indian officials, but also the Indian response of initiating a shutdown on consular services and the recall of top diplomats from their missions in Canada. This quickly grew into international news demanding public attention as the world saw two proud democratic nations with deep economic and people-to-people ties turn into hostile nations overnight. This was perhaps a classic case of diversionary foreign policy deployed by Trudeau to distract and divert the attention of Canadian citizens from internal problems like inflation and a steep real estate bubble. By blaming India, he attempted to stoke a nationalistic fervour across Canadian voters in the then-upcoming provincial elections to deflect attention from growing internal economic downturns and failures. In addition, to contain internal party dissent by MPs of the Liberal Party who called for the resignation of Trudeau. In addition, political considerations amidst heavy dependence of the Liberal Party on Jagmeet Singh led the New Democratic Party to ease out on the Khalistan front, allowing their free operations across Canada despite incriminating evidence from the Indian counterparts against such outfits and elements. Lastly, the Privy Council and CSIS report on Chinese interference in Canadian elections of 2019 and 2021, and the subsequent halt on the investigation by the Trudeau administration raised many eyebrows and his desperate attempts to blame India once again pointed fingers towards deploying diversionary foreign policy to divert and deflect attention of citizens from ongoing internal problems and the high tide of anti-incumbency against his regime. The Reset of 2025 The resignation of Trudeau, his subsequent disappearance from public spotlight, and the emergence of Mark Carney as the new leader of the Liberal Party and as the new and incumbent Prime Minister of Canada in March 2025 was a breather for citizens of both countries, the Indian Diaspora and Students in Canada, and trade houses as this leadership change envisioned a more pragmatic and sustainable approach to Indo-Canada ties. It is also noteworthy that the Canadian government soon realised that a prolonged increase in tensions with India would not bode well for Canada’s university education sector, tourism, services sector, and business sector. Canadian FDI in India accounts for less than 1 per cent of the total foreign direct investments India receives; however, Canada, on the other hand, had a lot to lose given that Indian students and professionals form the backbone of the Canadian education system and IT infrastructure. Regarding a seemingly long halt to the free-trade agreement, both countries were heading towards avoidable economic bitterness and mutual harm. With the Trump Administration’s repeated rhetoric of annexing Canada as the 51st state of the United States of America since Trump 2.0, Trudeau’s Canada soon found itself as the main clown in a circus it did not want to buy tickets to. Trudeau was repeatedly lampooned and trolled by Trump as the governor of the great 51st state of Canada. Trump 2.0 also dismantled the United States-Mexico-Canada Agreement (USMCA), previously negotiated and touted successor to the North American Free Trade Agreement (NAFTA). Reciprocal tariffs, threats of sanctions and open insults to Canadian leaders by Trump did not help the situation for Canada. Under diplomatic pressure, Canada was forced to extend an invitation to Prime Minister Modi to attend the G7 summit; this led to a warming of the bilateral relationship. With fallout with its key partner in North America, Canada soon saw itself on the verge of economic isolation and rushed to New Delhi to fix ties. The statement of Mark Carney on the ‘end of old ties with the USA’ and the visit of Canadian Foreign Minister Anita Anand this year, explains the clear pivot from the Trudeau days, amidst geopolitical realignment. The Road Ahead The visit of the Canadian Foreign Minister is the first high-level ministerial engagement between the two countries post-2023 and acts as a successor to the recent diplomatic rejuvenation. The visit centred around the cementing of age-old ties and shifting the baton away from the dark chapter of 2023-24 with renewed commitment to trade, overall economic growth, and security. Although the Comprehensive Economic Partnership Agreement (CEPA) is still on hold, the ongoing dialogues on increasing trade and cooperation in areas such as energy and LNG reflect the pragmatic and futuristic approach to trade. The plausibility of the Canadian Prime Minister’s visit to New Delhi for the AI summit in 2026, in addition to an agreed ministerial-level dialogue on energy, reflects a true commitment to a reset of ties at the topmost level. The Foreign Minister’s visit to Mumbai and interaction with investors also reflects that a more pragmatic people-to-people relationship is on the horizon. This can also be seen as Canada and India shifting their trade dependence away from the US and China, respectively. To corroborate the same, Indo-Canada talks on minerals; a near-China monopoly could be a landmark if Canadian mineral reserves and Indian Industrial demand are able to strike an amiable and sustainable deal soon. The Maple and The Lotus together: Much to the dismay of the POTUS? Amidst the recent imposition of steep tariffs by the USA on Canada, the subsequent counter-tariffs by Canada on the USA’s steel and allied industries, and the unsettling agreement, Canada has planned to double non-USA exports in the coming future, and this could be a deal-breaker for Indo-Canada ties if aligned in a positive, pragmatic, and structured manner. In 2024, India was Canada’s 7th largest trade partner; this could go up the ladder, and the bilateral trade of goods and services, amounting to about $30 billion, could multiply rapidly. The recent statement of Canadian Prime Minister Mark Carney in October 2025, ‘Don’t need America anymore’ and that ‘the new budget would aim to build a strong economy, lower cost of living, provide better opportunities to Canadians, and protect community and borders’ is a path breaker. This is indeed an official breakaway of Canada from American dependency and strongly implies how Canada is swiftly moving away, given concerns over sovereignty. India and Canada, however, have a couple of issues to resolve, be it the Khalistani row or the non-issuance of visas to members of the Indian Armed Forces and Police Personnel who have served in Kashmir, Punjab, and the North-Eastern parts of India. The former got a remote mention in the joint statement recently emphasised on ‘furthering security cooperation’, but the latter remains a looming question. How fair would it be if India did not issue visas to Canadian citizens who have faced charges of sexual assault while on UN peacekeeping duty? A question, perhaps, Canada must reflect upon. Another looming question is how the Maple ‘manage’ the Khalistani row and sentiment against furthering trade talks with India over ‘security’. Perhaps, a question only time can answer, given political considerations could often drive 180-degree pivots. Also, Canada must acknowledge the deepening concerns the Khalistani-factor has had on its political fabric and network, and it must de-link its domestic politics from foreign policy. Despite all these unresolved questions, India and Canada could write a historic-high chapter as opposed to the historic-low of 2023, if economic, strategic and diplomatic interests are aligned in a structured and amiable manner and security issues are resolved and not temporarily side-stepped. Reset is always welcome, but India must move ahead pragmatically. Canada must earn India’s trust this time; the days of assumed trust are long over. The Canadian political and security establishment needs to smell coffee and read the tea leaves! Canada may have to say goodbye to the Five Eyes Anglo-Saxon Alliance for its own long-term health. The demand of the changing geopolitical order with the emergence of multipolarity is perhaps seeing the blooming of Maple and the Lotus together again, much to the dismay of the POTUS this time.- Oct 31, 2025
- Viren S Doshi
