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India and Canada thaw tensions as trade talks restart

The post India and Canada thaw tensions as trade talks restart appeared com. India and Canada are thawing a long chill in their relations. Indian Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney met on the sidelines of the G20 summit in South Africa to restart discussions on a CEPA. The decision marks a significant reversal after a two-year hiatus in trade talks. According to India’s Ministry of External Affairs, the two leaders decided that negotiations will soon be undertaken on a “high-ambition” agreement, which could potentially open markets and create new investment opportunities. Carney accepted Modi’s invitation to visit India early in the new year. Officials from both governments will begin technical discussions ahead of that visit. The two leaders hope to boost bilateral trade to $70 billion by 2030. Last year, trade was around C$31 billion (US$22 billion). Canada seeks stronger access to India’s rapidly growing economy, while India aims for deeper ties with a G7 partner. Diplomatic efforts restore trust after the rift India-Canada relations have been strained since a major diplomatic spat in 2023. Canada had accused India of complicity in the killing of a Sikh separatist leader, Hardeep Singh Nijjar, in its Vancouver area. The Canadian authorities offered what they described as credible evidence that agents linked to the Indian government were involved. India dismissed the accusations as baseless. The standoff led to wide diplomatic expulsions. Both countries recalled their top diplomats and suspended significant diplomatic, trade, and military ties. It would be nearly two years before the relationship thawed much further. The diplomatic channels largely froze along the way. Formal engagement stalled, including talks on trade and economic cooperation. Then came new developments in early 2025 under the leadership of new leaders in Canada. Mark Carney, who later became the Governor of the Bank of Canada, prioritized repairing relations with India. He pledged to start rebuilding trust.