Mark Carney, the frontrunner to replace Justin Trudeau as leader of the Liberal Party of Canada, has expressed his commitment to restoring and strengthening trade ties with India if he becomes the country’s next Prime Minister.

Speaking to the media in Calgary, Alberta, on Tuesday, Carney emphasised the need for Canada to diversify its trade partnerships, particularly with "like-minded countries." He highlighted the potential to "rebuild the relationship with India," acknowledging the importance of shared values in fostering a strong commercial partnership.

Carney, a former Governor of both the Bank of Canada and the Bank of England, is widely considered the favourite to lead the ruling Liberal Party. The leadership race will conclude on Sunday, but while Carney is expected to emerge as the new party leader, the timeline for him to assume the role of Prime Minister remains uncertain.

Prime Minister Justin Trudeau addressed the transition process during a press conference in Ottawa on Tuesday. "That will be up to a conversation between the new leader and myself to figure out how long a transition is needed," he said. Trudeau added, "It should happen reasonably quickly. But there’s a lot of things to do in a transition like this, particularly at this complicated time."

Carney’s familiarity with India’s economy comes from his tenure as chair of the board at Brookfield Asset Management, a position he held until January this year. Brookfield has made significant investments in India, managing approximately $30 billion worth of assets across multiple sectors, including real estate, infrastructure, renewable energy, private equity and special investments.

His statement about rebuilding trade ties with India was well received by Ritesh Malik, chair of the Canada-India Foundation (CIF). "Carney, as a seasoned economist and his experience with Brookfield, knows the economic importance of this relationship. I feel his top priority will be foreign policy with trade and commerce in mind, and everything from the current scenario would be only upwards for Canada-India," Malik stated. He also noted that Carney’s "global perspective and recognition of strategic geopolitical importance" could lead to a fresh approach in Canada-India relations, fostering stronger economic and strategic ties.

The relationship between Canada and India suffered a major setback following Prime Minister Trudeau’s remarks in the House of Commons on September 18, 2023. He stated that there were "credible allegations" linking Indian agents to the killing of pro-Khalistan activist Hardeep Singh Nijjar in Surrey, British Columbia, three months earlier. This statement significantly strained diplomatic ties between the two nations.

A month before Trudeau’s remarks, Canada had paused negotiations on the Early Progress Trade Agreement (EPTA), a deal that both countries had been optimistic about finalising in 2023. This breakdown in relations put a halt to ongoing trade discussions and created uncertainties in bilateral economic cooperation.

If Carney takes over as Prime Minister, he aims to mend these fractured ties and reinvigorate economic collaborations between Canada and India. He reiterated that trade relations must be built on mutual values and trust. His leadership could mark a shift in foreign policy priorities, focusing on economic diplomacy and trade diversification to bolster Canada’s global standing.

With his economic background and extensive experience in global finance, Carney’s potential leadership is seen as an opportunity to reshape Canada’s trade relations. Whether he can effectively rebuild trust and rekindle economic negotiations with India remains to be seen, but his commitment signals a possible new chapter in bilateral ties.