India–Canada Relations 2026: UPSC Notes on History, Conflicts & Way Forward

Why in News- Canadian Prime Minister Mark Carney arrives in Mumbai on Friday on his first official visit to India. This marks a significant moment for the bilateral relationship, which has gone through a series of ups and downs over the last two and a half years.

Historical Background

India and Canada established diplomatic relations in 1947, founded on shared democratic traditions, pluralism, and strong people-to-people ties. However, the bilateral relationship has historically oscillated between warmth and strain, largely shaped by the Khalistan issue.

Key Historical Milestones

• 1948: Canada supported a plebiscite on the Indian state of Kashmir, causing early friction.
• 1974: Canada suspended nuclear cooperation after India's Pokhran test, as India used Canadian-supplied CIRUS reactor technology.
• 1985: The Kanishka bombing by Babbar Khalsa, a Khalistani separatist outfit, killed 331 people — the deadliest aviation disaster until 9/11.
• 2006-2015: Conservative PM Stephen Harper ushered in a golden era with 19 high-level visits and the joint celebration of 2011 as the 'Year of India in Canada'.
• 2015: PM Modi's visit to Canada — the first bilateral PM-level visit since 1973 — elevated ties to a 'Strategic Partnership'.
• 2018: Trudeau's India visit drew controversy when convicted Khalistani militant Jaspal Atwal was invited to a reception; Trudeau was received only by a Minister of State, not PM Modi.
• 2023: Trudeau's Nijjar allegations triggered an unprecedented diplomatic rupture — both nations expelled diplomats, closed consulates, and recalled High Commissioners.
• 2025-2026: With Trudeau's resignation and Carney's ascent, both sides undertook significant diplomatic heavy-lifting to rebuild the relationship.

Areas of Cooperation

1. Trade and Economic Relations In 2024, two-way trade stood at USD 30.8 billion, making India Canada's 7th largest trading partner. At the 2024 G20 Summit, both agreed to negotiate a Comprehensive Economic Partnership Agreement (CEPA) targeting USD 70 billion by 2030. India exports medicines, machinery, steel, electronics, chemicals, and jewellery; imports pulses, potash fertilizers, and minerals. Canada is India's 17th largest investor, with cumulative FDI of USD 4.18 billion (2000-2025).

2. Security and Defence Cooperation runs through two frameworks — the Joint Working Group on Counter Terrorism (1997) and the Framework on Countering Terrorism and Violent Extremism (2018). A dedicated National Security Advisors (NSAs) channel was created to handle transnational crime, insulating broader ties from the Nijjar controversy. Canadian NSA Drouin met Indian NSA Doval in September 2025; Doval visited Canada in February 2026, reflecting deepening security engagement.

3. Energy Cooperation Canada's reserves of oil, gas, LNG, LPG, and critical minerals complement India's growing energy needs. Both signed a Nuclear Cooperation Agreement (NCA) in 2010, establishing a Joint Committee on Civil Nuclear Cooperation. A uranium supply deal was signed during PM Modi's 2015 visit.

4. Education India is the largest source of international students to Canada, with over 3.92 lakh students enrolled as of December 2024. This fosters joint research, institutional linkages, and student exchange, making education a key people-to-people bridge.

5. Science, Technology, and Space ISRO and the Canadian Space Agency (CSA) have signed MoUs for space cooperation, with ANTRIX having launched multiple Canadian satellites. In late 2025, India, Canada, and Australia launched a Trilateral Technology and Innovation Partnership on emerging technologies and supply chain diversification.

6. Geopolitical Alignment Canada's membership in the G7, Five Eyes (US, UK, Australia, New Zealand), and NATO makes it a valued partner for India's diplomatic outreach. Canada's Indo-Pacific Strategy designates India a 'critical partner' and China an 'increasingly disruptive global power,' reflecting broad strategic convergence.

Areas of Conflict

1. The Khalistan Issue The Khalistan separatist movement remains the single most destabilising factor in bilateral ties. Of Canada's approximately 8 lakh Sikhs, only around 1% (8,000-9,000) are estimated to be pro-Khalistan radicals. Yet this small group controls 12-15 gurdwaras and wields disproportionate political influence in Brampton (Ontario), Vancouver, and Surrey (British Columbia). Successive Canadian governments have been accused of tolerating separatist activities for electoral reasons.

2. The Nijjar Killing and Diplomatic Rupture (2023) In September 2023, PM Trudeau alleged Indian government involvement in the killing of Hardeep Singh Nijjar — a designated terrorist in India — in British Columbia. The MEA rejected the accusations as 'absurd and motivated.' Both sides expelled diplomats, suspended visa services, withdrew High Commissioners, and closed consulates — steps typically reserved for wartime adversaries. Canadian officials also publicly linked Home Minister Amit Shah to an alleged campaign against Sikh separatists, which India categorically denied.

3. Stalled Trade Agreements The diplomatic rupture froze CEPA negotiations. Canada accounts for nearly 1% of India's total trade, ~25% of its pulse imports, and ~5% of fertilizer imports — making the friction economically significant for both sides.

4. Attacks on Consulates and Diaspora Pro-Khalistan elements have vandalised Indian consulates and temples and targeted non-Sikh diaspora members. India has labelled Canada a 'safe haven for terrorists, extremists and organised crime' — language it otherwise reserves for Pakistan and Afghanistan.

Strategic Significance

The India-Canada relationship has acquired heightened strategic salience in the current global context:

1. Trump's Trade Disruptions: As the US disrupts global trade through tariff policies, both India and Canada are seeking alternative partnerships. With Canada itself facing US tariff threats, economic diversification has become urgent for Ottawa, making India a natural pivot.

2. Countering China: Canada's Indo-Pacific Strategy explicitly identifies China as a disruptive power and India as a critical partner. Deeper India-Canada ties strengthen the broader democratic coalition in the Indo-Pacific.

3. Supply Chain Resilience: The India-Canada-Australia Trilateral Technology and Innovation Partnership, formed at the 2025 G20, aims to build trusted alternative supply chains, reducing dependence on Chinese manufacturing.

4. Energy Security: Canada's vast natural resources complement India's growing energy demand. Securing LNG and critical minerals from a democratic, rule-of-law partner aligns with India's energy diversification goals.

5. Intelligence and Security: Canada's membership in Five Eyes and NATO creates pathways for India to strengthen intelligence-sharing, particularly on terrorist financing and cross-border extremism.

Impact on Indian Diaspora

Canada hosts over 1.8 million Indo-Canadians and approximately 1 million NRIs — one of the largest Indian communities worldwide. The bilateral crisis had significant human consequences:

1. Visa Suspension: India suspended visa services for Canadian nationals in 2023, disrupting travel for thousands of families.

2. Student Mobility: The diplomatic freeze created anxiety among over 3.92 lakh Indian students (as of December 2024) around admissions, study permits, and post-study work opportunities.

3. Remittances: Canada ranks among India's top 10 remittance sources. Of India's total USD 125 billion in remittances received in 2023, Canada contributed approximately 0.6%. Diplomatic uncertainty dampens both remittance flows and investment decisions.

4. Community Polarisation: The Nijjar controversy sharpened divisions between pro-India and pro-Khalistan factions within the Sikh diaspora, affecting community cohesion and safety.

5. Investment Uncertainty: Canadian pension funds — CPPIB and CDPQ — have cumulatively invested over USD 75 billion in India, with stakes in Kotak Mahindra Bank, Paytm, Zomato, and Infosys. Diplomatic instability creates risk for these large-scale investments.

The gradual recovery since 2025 has restored visa services and renewed student pathways. Ahead of Carney's visit, Canada moved to revoke the citizenship of Tahawwur Rana — a Pakistani-Canadian convicted in connection with the 2008 Mumbai attacks — signalling concrete goodwill toward India.

Way Forward

The Carney visit provides a critical inflection point. Sustaining the momentum will require structural changes, not merely diplomatic gestures:

1. Finalise CEPA: Both nations should prioritise concluding the Comprehensive Economic Partnership Agreement (CEPA), targeting the USD 70 billion trade goal by 2030, while addressing structural impediments like complex regulatory frameworks.

2. Institutionalise the NSA Framework: The bilateral mechanism on transnational crimes under National Security Advisors (NSAs) should be made permanent and result-oriented, effectively delinking the Nijjar investigation from broader political and economic ties.

3. Dehyphenation Strategy: India and Canada must compartmentalise the Khalistan issue from trade, investment, and people-to-people relations — similar to how India manages partnerships where political disagreements coexist with cooperation.

4. Diaspora Engagement: India must proactively engage the broader Canadian Sikh community through constructive outreach, countering Khalistani misinformation and showcasing Punjab's development and integration into mainstream India.

5. Track II Diplomacy: Civil society organisations, think tanks, and academic institutions on both sides should be leveraged to build people-to-people understanding and defuse politically charged narratives.

6. Energy and Technology Partnerships: Fast-tracking LNG supply agreements, critical mineral deals, and joint technology ventures under the India-Canada-Australia Trilateral will create durable economic stakes that make future diplomatic ruptures less likely.

Responsible Media Engagement: Both governments should encourage media coverage that accurately reflects the complexity of bilateral ties and the efforts underway to strengthen them.

Conclusion

The India-Canada relationship is at a strategic crossroads. The arc from Trudeau's explosive 2023 allegations to Carney's 2026 New Delhi visit reflects both the fragility of bilateral ties and the resilience of shared interests. With the global trade order under strain and the Indo-Pacific emerging as the decisive geopolitical theatre, both nations have powerful incentives to move past their differences. The real challenge lies in building a relationship insulated from domestic political pressures and anchored in institutional depth — across trade, energy, technology, and security. Carney's visit is not a conclusion, but a beginning.

UPSC Syllabus- GS 2- Bilateral Relations

Source- IE

FAQs on India-Canada Relations​​ (UPSC 2026)

Q1. Why are India-Canada relations in news in 2026? Canadian Prime Minister Mark Carney visited India in late February 2026 for high-level talks with PM Narendra Modi — the first such visit after a prolonged diplomatic crisis triggered by former PM Justin Trudeau's 2023 allegations linking the Indian government to the killing of Khalistani separatist Hardeep Singh Nijjar in British Columbia. The visit signals a strategic reset in bilateral ties.

Q2. What caused the diplomatic crisis between India and Canada in 2023? In September 2023, PM Trudeau alleged Indian government involvement in the killing of Hardeep Singh Nijjar in Canada. India rejected the allegations as 'absurd and motivated.' Both sides expelled diplomats, withdrew High Commissioners, suspended visa services, and closed consulates — an unprecedented rupture in ties.

Q3. ​Is India-Canada relations important for UPSC 2026? Yes - it is highly relevant for both Prelims and Mains. For Prelims, expect questions on CEPA, Five Eyes, Khalistan, and bilateral trade data. For Mains (GS2), it covers international relations, diaspora diplomacy, India's Indo-Pacific strategy, and counter-terrorism frameworks. It is also relevant for Essay and Interview stages.