In a critical development that could redefine one of the most consequential bilateral relationships in the Indo-Pacific-West corridor, Canada and India have formally agreed to reset their diplomatic relations. The move follows a high-stakes meeting between Canadian Prime Minister Mark Carney and Indian Prime Minister Narendra Modi on the sidelines of the 2025 G7 Summit held in Kananaskis, Alberta.
This reset marks the end of a diplomatic freeze that began in 2023 after the killing of Sikh separatist Hardeep Singh Nijjar in British Columbia. Canada’s accusations implicating Indian involvement in the incident sparked a swift and intense diplomatic crisis—resulting in mutual expulsions of diplomats, trade negotiations being halted, and visa services disrupted.
But following months of behind-the-scenes diplomacy and a change of leadership in Ottawa, both nations now appear ready to turn the page.
From Cold Shoulders to Constructive Talks
Mark Carney, a former central banker turned prime minister, made the restoration of Canada’s global credibility and strategic alliances a central theme of his foreign policy agenda. Meeting with Prime Minister Modi was a top priority for his administration, given India’s rising global profile and vast economic potential.
According to a senior Canadian official, the discussion was “pragmatic and forward-looking,” with both leaders demonstrating a desire to compartmentalize past disputes while focusing on tangible outcomes.
India welcomed Carney’s willingness to address sensitive issues, while Canada reaffirmed its commitment to balancing civil liberties with national security obligations.
Restoring the Architecture of Diplomacy
One of the immediate outcomes of the meeting was a mutual agreement to reappoint high commissioners and reopen full diplomatic missions. Visa and consular services—which were scaled down amid the diplomatic row—will return to normal by July 2025.
This is particularly significant for the Indian diaspora in Canada, which numbers over 1.4 million, as well as the more than 300,000 Indian students currently enrolled in Canadian institutions.
Canadian universities, immigration consultants, and trade chambers welcomed the announcement, calling it a “long-overdue course correction.”
Reviving Trade and Investment Talks
The economic consequences of the diplomatic chill were felt across both nations, particularly in trade and investment. The Comprehensive Economic Partnership Agreement (CEPA), once seen as a transformative deal, was shelved indefinitely during the crisis.
However, Carney and Modi agreed to relaunch CEPA negotiations in September 2025 with a leaner, sector-specific agenda focusing on clean technology, agri-food, digital infrastructure, and critical minerals.
India is also expected to ease some of the bureaucratic hurdles that Canadian investors have faced in the energy and insurance sectors. In return, Canada is likely to revisit its rules around high-skilled immigration pathways and expand cooperation on workforce development.
Security and the Khalistan Question
The most contentious topic during the meeting was the presence and activities of pro-Khalistan separatists in Canada, an issue India has raised repeatedly. While Canada continues to defend the right to free expression, Carney signaled a stricter approach to violent extremism and foreign-influenced political activism.
Canada plans to introduce new legal frameworks that distinguish between peaceful advocacy and incitement to violence. The countries will also launch a bilateral security dialogue to enhance intelligence sharing and counter-transnational extremist threats.
Modi appreciated what he termed a “realistic shift in approach,” calling it “an important beginning in restoring trust.”
Education, Mobility, and Youth Engagement
The warming of ties also opens the door for enhanced academic cooperation. Canadian universities are exploring dual-degree programs with Indian institutions, while Ottawa is considering expanding postgraduate work permits for Indian graduates.
Canada will also ease credential recognition for Indian professionals in healthcare, IT, and engineering sectors—an area where regulatory delays have long been a source of frustration.
Both leaders announced a “Canada-India Youth Mobility Framework” to foster exchange programs, internships, and entrepreneurship initiatives for students and young professionals.
Diaspora Diplomacy and Cultural Outreach
With the Indian diaspora playing a prominent role in Canadian society—and in some cases, in the political discourse—the two countries agreed to launch a “Bilateral Diaspora Forum” to address issues of integration, radicalization, and community diplomacy.
The forum will focus on promoting cultural ties, interfaith dialogue, and conflict resolution training. Canada also pledged to crack down on hate speech and politically motivated violence stemming from diaspora politics.
This represents a significant shift in how both countries manage the cultural and emotional bridge between their populations.
Regional and Global Stakes
The strategic significance of the reset extends beyond bilateral concerns. As members of key global forums such as the G20 and Indo-Pacific Economic Framework (IPEF), Canada and India have overlapping interests in supply chain resilience, digital regulation, and democratic governance.
Modi and Carney discussed China’s regional assertiveness, the Ukraine conflict, and the future of the multilateral system. Both leaders emphasized the need for “trusted partners” in a volatile global environment.
India invited Canada to participate in its Digital South initiative, while Canada reiterated support for India’s bid for a permanent seat on the UN Security Council.
Next Steps and Cautious Optimism
The diplomatic breakthrough will be tested in the coming months. Joint ministerial visits, CEPA negotiation relaunch, and renewed security cooperation are expected before the end of the year.
Challenges will remain—especially around diaspora activism and geopolitical pressures—but the consensus is that a strong foundation has been laid.
“Diplomacy is not about erasing disagreements, but managing them wisely,” said a Canadian diplomat. “This reset is not perfect, but it’s essential—and it’s happening.”
