India and Canada Renew Efforts to Rebuild Trade Ties After Diplomatic Rift

In a significant step toward restoring strained relations, India and Canada have resumed senior-level economic talks, aiming to rebuild trust and strengthen bilateral trade following last year’s diplomatic tensions.

India and Canada have taken meaningful steps this week to stabilise their trade relationship, holding their first high-level economic discussions since political friction disrupted bilateral engagement in 2024. According to India’s Ministry of Commerce and Industry, the renewed dialogue marks a cautious but positive shift in the partnership.

Maninder Sidhu, Canada’s Minister of Export Promotion, International Trade and Economic Development, visited New Delhi from 11–14 November at the invitation of India’s Commerce and Industry Minister, Piyush Goyal. The two leaders met during the 7th India-Canada Ministerial Dialogue on Trade and Investment, signalling a revival of communication after months of halted engagement.

The ministry highlighted that the talks followed directives from both prime ministers, given during their bilateral meeting at the G7 Summit in Kananaskis, Canada, and reinforced by the joint foreign ministers’ statement, “Renewing Momentum Towards a Stronger Partnership” issued on 13 October 2025. This statement emphasised that trade remains central to growth, resilience, and future cooperation.

During the talks, the ministers reaffirmed the strength of the India-Canada economic partnership and expressed commitment to deepening cooperation through open dialogue, mutual respect, and forward-looking initiatives.

A Relationship Recovering from a Diplomatic Low

India-Canada relations faced severe strain in recent years due to long-standing tensions surrounding the Khalistan separatist movement. Matters escalated following the June 2023 killing of Sikh activist Hardeep Singh Nijjar in British Columbia. The accusation by former Canadian Prime Minister Justin Trudeau—suggesting Indian involvement—was strongly denied by New Delhi, leading to reciprocal diplomatic expulsions and frozen trade negotiations. Fresh expulsions in 2024 pushed the relationship to one of its most challenging phases in decades.

Strong Trade Performance Despite Tensions

Despite the diplomatic strain, the Commerce Ministry reported solid growth in economic exchange. Bilateral trade in goods and services reached $23.66 billion in 2024, including nearly $8.98 billion in merchandise trade, marking a 10% year-on-year increase. Both ministers highlighted the resilience of the trade relationship and the essential role of private sector engagement in unlocking new opportunities.

They also acknowledged the expanding two-way investment flows—ranging from major Canadian institutional investments in India to the growing presence of Indian businesses in Canada—collectively supporting tens of thousands of jobs across both nations.

Deepening Cooperation in Emerging Sectors

The discussion placed strong emphasis on strategic emerging sectors. Both countries agreed to strengthen collaboration in:

Critical minerals, essential for clean energy transitions

Aerospace and dual-use industrial technologies

Advanced supply chain partnerships

Given Canada’s expertise in these areas and India’s fast-growing markets, the ministers expressed confidence in the potential for long-term cooperation.

The two leaders concluded by reaffirming their shared commitment to sustained dialogue, stronger people-to-people ties, and revitalised economic engagement that aligns with evolving global trade and supply chain dynamics.