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February 20, 2026The $50 Billion Reset: Navigating the New Geopolitics of Indo-Canadian Ties
In 2018, the Indo-Canadian relationship was labelled a “strategic partnership” with unrealised potential, limited by political tensions during the Trudeau era and insufficient institutional depth. In a CPPR blog that year, I questioned whether the relationship truly qualified as strategic, noting the lack of institutional support despite shared democratic values. Seven years later, as Canadian PM Mark Carney prepares to visit India in March 2026, the relationship is being renewed amid shifting geopolitics and economic interests.
A Tale of Two Visits
Justin Trudeau’s 2018 visit to India was widely criticised as a “photo-op disaster,” with an emphasis on optics over substance and domestic politics. Inviting a convicted extremist to an official dinner furthered the view that electoral interests took precedence over strategic priorities.
PM Modi’s June 2025 visit to Canada marked a shift from the Trudeau era, emphasising energy security and technology collaboration. This visit followed years of diplomatic tension, including diplomat expulsions and suspended visa services. Modi’s return at Carney’s invitation signalled a shared commitment to rebuilding economic ties.
The Anita Anand Thaw
In my 2018 analysis, I argued that four pillars defined the relationship: Diaspora, Trade & Industry, Energy, and Defence. However, none of that mattered as the relationship nosedived in 2023 following Justin Trudeau’s allegations against the Government of India.
Canadian Foreign Minister Anita Anand’s October 2025 visit to India was pivotal. The joint statement, during her visit, outlined steps to renew momentum: normalising security dialogue, restarting energy cooperation, forming a critical minerals partnership, relaunching CEO and science forums, and deploying specialised expertise in consulates, signalling a serious commitment to rebuilding ties.
Diplomacy in Motion: The CEPA Countdown
High-level meetings at the G7 (June 2025) and G20 (November 2025) helped revive bilateral ties and shape India’s current strategy.
The pursuit of a Comprehensive Economic Partnership Agreement (CEPA) remains central, with leaders targeting $50 billion in trade by 2030. ACITI (Australia-Canada-India Technology and Innovation), launched at the G20 Summit, is now a key initiative focused on green energy and critical technologies. Australia and Canada, as major suppliers of uranium and critical minerals, and India, as a leading energy consumer and technology innovator, are key partners. ACITI integrates these strengths and serves as a multilateral extension of Indo-Canadian ties.
A C$2.8 billion, 10-year uranium deal is anticipated, positioning Canada as a key energy partner in India’s carbon-neutral transition.
New priorities include energy security as a “Global Public Good.” India advocates “Energy Justice” for the Global South, while Canada joins as a partner in the International Solar Alliance and the Global Biofuels Alliance.
Digital infrastructure and data sovereignty are now priorities. India promotes “Responsible AI” and a “Democratic Tech Bloc” with Canadian support for India’s 2026 AI Summit.
The Agricultural Pivot
In 2018, I identified Trade (CEPA) as a foundational pillar. By 2024-25, the relationship had shifted from stagnation to indispensability, particularly in agriculture, which remains central to Indo-Canadian trade. In 2024, Canada exported nearly C$1 billion in vegetables and roots to India. India extended duty-free access for Canadian yellow peas and continued exporting Basmati rice, spices, and processed foods to Canada.
The Cotton Protocol: According to the United Nations COMTRADE database, India exported $7.16 million in cotton to Canada in 2024. While Canada does not produce cotton commercially, there is significant potential for growth in finished garment exports. The recent US-Bangladesh trade agreement, which eliminates tariffs on Bangladeshi textiles made from American cotton and synthetic fibres, challenges the competitiveness of Indian textile exports. To address this, India should prioritise securing trade advantages in the upcoming CEPA negotiations and request duty-free access for Indian textiles made from Indian cotton. This “Cotton Protocol” could help achieve the $50 billion trade target. India exported US$235.53 million in garments to Canada, making garments a key export. The average Canadian MFN tariff on apparel is 16–18%. If this tariff, for example, 17%, is removed, Indian garments would become more competitive in the Canadian market. Since the “Cotton Protocol” applies only to garments made from Indian cotton, India gains a unique vertical-integration advantage over Bangladesh. A zero-tariff Cotton Protocol could realistically increase India’s garment exports to Canada by up to US$200 million, assuming a price elasticity of demand of 1.3.
From “Port Calls” to Industrial Bases
In 2018, I expressed scepticism regarding the strength of Indo-Canadian defence ties. At that time, there had been no major joint exercises beyond the 2017 INS Teg and HMCS Winnipeg encounter. In 2016, Canada’s defence exports to India accounted for only 0.09% of its total exports. I contended that a left-leaning Liberal government would face challenges in establishing a robust strategic defence partnership.
The Aerospace Market: In 2018, I highlighted Bombardier’s sales to SpiceJet. In 2024, we read about the Adanis talking to Bombardier to explore “transformative partnerships,” but a deal was never reached. Then, in 2026, we see Adani Defence & Aerospace sign a landmark MOU with Brazil’s Embraer, another global aerospace leader.
Canadian aerospace firms, like Bombardier and CAE, recognised for their expertise in areas such as avionics, flight simulation, and specialised mission aircraft, can capitalise on the “Make in India” initiative through multiple avenues and can even become key players in the MRO (Maintenance, Repair, and Overhaul) and AOG (Aircraft on Ground) markets in India. By establishing manufacturing operations in India, Canadian firms can transition from a seller-buyer relationship to a co-production model, thereby integrating more deeply into India’s defence industrial ecosystem.
Canada’s Arctic concerns over China’s “Polar Silk Road” align with India’s Indian Ocean priorities. The MAHASAAGAR (Maritime Association for Holistic Advancement and Sustainable Growth in the Region) initiative and Indo-Pacific cooperation with Australia offer a platform for trilateral maritime security.
A “Carney Reset”
Now, the question is whether new frameworks like ACITI and CEPA will endure domestic political pressures. The revived partnership must balance old mistrust with the promise of a $50 billion future. The shift from “Bhangra Diplomacy” to “Energy Justice” and “Defence Industrialisation” shows both nations’ maturation as powers that can “still exert influence over global politics” (WEF, 2026).
Geopolitically, a coalition between Canada and Australia (classified by the WEF as ‘middle powers’) and India (middle/major power) can act as a stabiliser in a world fractured by US-China trade wars and the unpredictability of “Trumpian” tariffs.
Integrating Canada’s technology with India’s manufacturing is key. Meeting the $50 billion trade goal would establish the partnership as a leader for stability in the Indo-Pacific.
Perhaps Mark Carney, as an economist-PM, is the reset India-Canada ties needed.
This blog by J Paul, Programme Officer at Centre for Public Policy Research is AI-assisted and Human-edited.
Views expressed by the author are personal and need not reflect or represent the views of the Centre for Public Policy Research.
J Paul Zachariah is Programme Officer (Chairman’s Office) at CPPR. He works with the Chairman on the strategic development of CPPR and building partnerships. Paul is a blogger and writes for CPPR blog on topics like international relations and security.
