Mark Carney’s victory for the Liberal Party in Monday’s federal election has set the stage for a possible reset in Canada-India relations. A former governor of the Bank of Canada and the Bank of England, Carney ran on a platform of trade diversification and pledged to rebuild ties with New Delhi after a period of diplomatic strain under Justin Trudeau.

During his campaign, Carney said Canada would seek new markets and named India as a priority. “We will diversify our trading relationships with like-minded countries,” Carney told voters. “If I serve as prime minister, I will work to restore a relationship with India based on shared values and mutual benefit.”

Bilateral ties hit a low point in 2023 after Ottawa accused agents of the Indian government of involvement in the June killing of Hardeep Singh Nijjar, a Canadian citizen, in Surrey, British Columbia. Canada expelled six Indian diplomats in October 2024 after New Delhi dismissed the allegations. Both sides froze a long-negotiated Comprehensive Economic Partnership Agreement, recalling high-level envoys and suspending official exchanges.

Canada’s Indo-Canadian community, now nearly 2.8 million strong, played a prominent role in this election. The community includes more than 427,000 students and a substantial cohort of temporary workers, fueling Canada’s labour market needs. Under Trudeau, immigration from India continued at record levels; experts expect Carney’s government to maintain intake for skilled professionals and students.

Trade experts note that services trade between Canada and India reached CAD 13.49 billion in 2023, with potential for growth in artificial intelligence, financial technology, green energy and education sectors. Observers say a revived CEPA could help both countries reduce dependence on markets in the United States and China.

Carney has framed his economic plan as a response to external tariff threats and uncertainty in U.S. policy. In a February interview with the Toronto Star, he contrasted his approach with former U.S. President Donald Trump’s, warning that “Donald Trump wants to break us so America can own us.” He argued that India must be part of Canada’s strategy to balance global trade risks.

Within hours of the election call, Prime Minister Narendra Modi posted congratulations on X, citing “shared democratic values, commitment to the rule of law and vibrant people-to-people ties.” Modi wrote that he looked forward to “unlocking greater opportunities” for the citizens of both countries.

With Carney in place, analysts say the next steps will include reopening CEPA talks, arranging reciprocal high-level visits and addressing security concerns raised by both governments. How quickly Canada and India move forward may hinge on Carney’s ability to translate campaign promises into diplomatic action.