Prime Minister Mark Carney has announced his intention to finalise a comprehensive trade agreement with India by the end of this year, signalling a renewed commitment to improving diplomatic ties between Canada and the South Asian nation. During a visit to Mumbai, where he addressed approximately 100 business leaders and investors, Carney expressed optimism about moving beyond a “challenging period” in Canada-India relations towards a more ambitious partnership with the world’s fifth-largest economy.
A New Chapter in Canada-India Relations
Carney’s remarks came as he highlighted the changing global landscape, characterised by a breakdown of the rules-based international order and increasing economic coercion from major powers. He noted that many countries, including India, are now seeking greater “strategic autonomy,” a term that resonates with India’s foreign policy approach of engaging with multiple global powers rather than aligning with a single bloc.
“Building true strategic autonomy requires diversification, not isolation,” Carney stated. He emphasised the potential for collaboration between Canada and India to not only mitigate risks but also enhance prosperity and sovereignty for both nations.
Navigating Foreign Policy Differences
The Prime Minister acknowledged the complexities of international relations, particularly the differing foreign policy stances of Canada and India. While India maintains a cordial relationship with Russia, which has included significant energy and arms trade, Canada has been actively supporting efforts to counter Russian aggression in Ukraine. Carney remarked on the necessity of pragmatic engagement with international partners, even when differences arise.
His approach, which he describes as “values-based realism,” seeks to recognise that national interests can diverge and that meaningful progress often occurs incrementally. “We are actively taking on the world as it is, not passively waiting for a world we wish to be,” he asserted.
Economic Opportunities and Strategic Partnerships
During his address, Carney laid out the economic advantages that Canada can offer, particularly in the energy sector. He mentioned plans to increase Canada’s liquefied natural gas (LNG) exports to Asia by 50 million tonnes in the coming years, alongside a competitive marginal effective tax rate for new investments, which is notably lower than that of the United States.
He highlighted the strong ties between the two nations, noting that around two million Canadians have Indian heritage, contributing significantly to sectors such as business, science, and government. Despite Canada’s exports to India currently representing less than 1% of total exports, Carney believes that the potential for growth is immense. “We can be India’s strategic partner in critical minerals for India’s manufacturing, clean tech, and nuclear industries,” he explained, while also underscoring the opportunity for India to assist Canada in reaching its clean energy goals.
A Vision for Future Collaboration
Carney’s visit marks a significant step in fostering a deeper alliance between Canada and India, particularly in areas such as artificial intelligence and the digital economy. Such collaboration aligns with Canada’s ambitions to advance its capabilities in AI and quantum technology while enhancing defence innovation.
As both nations navigate the challenges posed by a volatile global environment, their partnership could yield substantial benefits, positioning them as key players in the evolving geopolitical landscape.
Why it Matters
The proposed trade agreement between Canada and India not only represents an opportunity to strengthen economic ties but also serves as a crucial step in redefining international relationships in an increasingly complex world. By embracing a pragmatic approach and acknowledging differing values, Canada and India can forge a partnership that promotes mutual growth, stability, and resilience in the face of global challenges. The potential for collaboration in critical sectors can pave the way for a more prosperous future for both nations, ultimately benefiting their citizens and strengthening their roles on the global stage.
