Two years ago, India and Canada expelled each other's diplomats. This week, they signed $5.5 billion in deals and relaunched a trade agreement that had been stalled for sixteen years. The speed and completeness of the reversal is extraordinary — and it tells you more about 2026 geopolitics than it does about the bilateral relationship itself.

The Week's Events

Canadian Prime Minister Mark Carney arrived in New Delhi on March 2, 2026, for a two-day state visit — the first by a Canadian head of government since 2015. The visit produced a comprehensive package of agreements, collectively valued at approximately $5.5 billion Canadian dollars, that span nuclear energy, liquefied natural gas, critical minerals, clean technology, and financial services.

The centrepiece was a uranium supply agreement between Cameco Corporation — Canada's Saskatchewan-based nuclear fuel producer and one of the world's two largest uranium miners — and the Indian government. Under the deal, Cameco will supply 22 million pounds of uranium to India over the period 2027 to 2035, at a contract value of approximately C$2.6 billion. This is the first new uranium supply agreement between India and Canada since the Harper-era contract that expired in 2020.

The two governments also announced the relaunch of negotiations on the Comprehensive Economic Partnership Agreement (CEPA) — a bilateral free trade deal that has been under intermittent discussion since 2010 but has never been concluded. Both sides set a target of concluding the deal by the end of 2026, with a stated bilateral trade target of $50 billion by 2030, up from approximately $13 billion currently.

Canada's nine largest pension funds — including the Canada Pension Plan Investment Board, OMERS, and the Ontario Teachers' Pension Plan — attended the visit as part of a business delegation. Memoranda of understanding were signed for infrastructure investment in India across logistics, urban transport, and green energy. The total value of pension fund investment commitments made or signalled during the visit is estimated at approximately $2 billion over five years.

"More engagement in the last year than the last two decades combined." — PM Carney, New Delhi, March 2, 2026

How It Fell Apart: The Nijjar Crisis

The India-Canada relationship had been deteriorating for years before the September 2023 crisis, primarily over Canada's large and politically active Sikh diaspora and the Indian government's perception that Ottawa tolerated extremist elements within it. But the rupture came quickly.

On September 18, 2023, Prime Minister Justin Trudeau told the Canadian House of Commons that there were "credible allegations" of a potential link between agents of the Indian government and the killing of Hardeep Singh Nijjar — a Canadian citizen and Sikh activist who had been designated a terrorist by India — outside a Sikh temple in Surrey, British Columbia, on June 18, 2023. India denied the allegation emphatically and demanded that Canada provide evidence.

The exchange escalated rapidly. Canada expelled an Indian diplomat. India expelled a Canadian diplomat. Within weeks, both sides had reduced their diplomatic presence to minimal levels. India suspended visa services for Canadian citizens. Canadian warnings were issued against travel to parts of India. The CEPA talks, which had already been stalled for years, were formally suspended.

The bilateral trade relationship deteriorated sharply over the following twelve months. According to Statistics Canada and India's Ministry of Commerce, bilateral trade fell by approximately 18% in the year following the expulsions, as business confidence collapsed and the absence of diplomatic infrastructure made even routine commercial interactions difficult.

How It Came Back: The Carney Calculation

Justin Trudeau resigned as Liberal Party leader in January 2025 following a loss of parliamentary confidence. Mark Carney — the former Governor of the Bank of Canada and the Bank of England, and a figure with significant credibility in international financial markets — won the Liberal leadership contest and became Prime Minister in February 2025.

Carney's approach to India was explicitly pragmatic from the outset. In his first bilateral call with Prime Minister Modi in March 2025, Carney signalled an interest in resetting the relationship on the basis of mutual economic interest, without prejudging the outcome of the ongoing RCMP investigation into the Nijjar killing. High Commissioners were reinstated within weeks. The visa suspension was lifted. Back-channel diplomatic contacts resumed.

Two structural factors accelerated the process. First, the Trump administration's imposition of 25% tariffs on Canadian goods in February 2025 — and the subsequent threat of escalation — made Canada's economic relationship with the United States suddenly unreliable. Canada needed to diversify its trade and investment relationships with urgency. India, with 7% GDP growth and 1.4 billion consumers, was the most obvious large alternative market.

Second, India's nuclear energy ambitions had created a genuine and urgent demand for uranium supply that only a handful of countries could fulfil. Canada, with reserves of approximately 550,000 tonnes of uranium (roughly 9% of global reserves, concentrated in Saskatchewan's Athabasca Basin), was one of them. India's plans to expand nuclear power generation from 7.5 GW currently to 100 GW by 2047 required a reliable long-term uranium supply that did not depend on Kazakhstan or Russia — both of which carry geopolitical risk.

What Was Signed: A Deal-by-Deal Analysis

1. Uranium Supply Agreement — C$2.6 Billion

The Cameco-India uranium deal is the most strategically significant element of the package. The 22 million pound volume, delivered over eight years from 2027 to 2035, represents approximately 2.75 million pounds per year — sufficient to fuel several of India's planned Pressurised Heavy Water Reactors (PHWRs).

Canada holds approximately 9% of global uranium reserves and accounts for roughly 18% of global uranium production. Cameco's McArthur River mine in Saskatchewan is the world's largest high-grade uranium mine. The company had previously supplied India under a Harper-era agreement but the supply relationship lapsed with the expiration of that contract in 2020 and was not renewed during the Trudeau years.

From India's perspective, the deal reduces dependence on Kazakhstan (currently the world's largest uranium producer at 43% of global supply) and on Russia's TVEL, which has historically supplied fuel for India's VVER-type reactors. Diversification of nuclear fuel supply is a stated priority of India's Department of Atomic Energy.

2. LNG Strategic Partnership

Canada and India signed a framework agreement for the supply of Canadian liquefied natural gas to India, with a focus on exports from British Columbia's West Coast LNG projects — particularly the LNG Canada terminal at Kitimat, which began exports in 2024. Canada has set a target of 50 million tonnes per year of LNG export capacity by 2030.

India is the world's fourth-largest LNG importer and its demand is expected to double by 2030, driven by industrial use, power generation, and city gas distribution networks. Canadian LNG, shipped via the Pacific route, can reach India in approximately 20 days — competitive with Middle Eastern and Australian suppliers.

3. Critical Minerals MoU

Canada and India signed a memorandum of understanding on critical minerals cooperation, targeting seven minerals identified as strategic priorities by both governments: lithium, cobalt, nickel, copper, graphite, manganese, and rare earth elements. Canada holds significant reserves of all seven, particularly in Quebec, Ontario, and the Northwest Territories.

For India, the deal addresses a structural dependency on China, which controls 60–80% of global processing capacity for most critical minerals. India's EV and clean energy transition depends on securing supply chains for battery materials that currently flow almost entirely through Chinese processing facilities. The Canada deal is part of a broader critical minerals diversification strategy that also includes agreements with Australia, the United States, and Argentina.

4. Pension Fund Investment

The presence of nine major Canadian pension funds — collectively managing approximately C$2.3 trillion in assets — at the Carney visit reflects a deliberate strategy by both governments to mobilise long-term institutional capital for India's infrastructure needs. Canadian pension funds have historically been among the most active international investors in Indian infrastructure, with significant positions in airports, toll roads, and renewable energy.

The MoUs signed during the visit are not binding investment commitments, but they signal intent. The Canada Pension Plan Investment Board (CPPIB) already has over $25 billion invested in India — its largest single-country emerging market exposure. The expanded framework is expected to facilitate additional investments in logistics, data centres, and green hydrogen infrastructure.

The Trade Picture: From $13 Billion to $50 Billion

Current India-Canada bilateral trade stands at approximately $13 billion — a relatively modest figure given the size of both economies. Canada's exports to India are led by fertilisers (potash), pulses, newsprint, and industrial machinery. India's exports to Canada are dominated by pharmaceutical products, gems and jewellery, and IT services.

The CEPA, if concluded, would dramatically expand this relationship. Modelling by the Confederation of Indian Industry (CII) and the Canadian Chamber of Commerce suggests that a comprehensive FTA could increase bilateral trade to $40–60 billion by 2030. The sectors with the largest growth potential are: energy and minerals ($20+ billion), IT and digital services ($8 billion), pharmaceuticals and life sciences ($5 billion), agri-food processing ($4 billion), and financial services ($3 billion).

The negotiating challenges are real. India's agricultural sector — historically the most sensitive area in any of India's FTA negotiations — is a significant sticking point, as Canadian dairy and grain exporters would want market access that Indian domestic politics makes difficult to concede. Canadian concerns about professional mobility for Indian workers, data localisation requirements, and intellectual property protection for Canadian pharmaceutical companies are also likely to create friction.

Sixteen years of inconclusive CEPA talks is a sober reminder that commercial logic and political will do not always translate into concluded deals.

"Pragmatism won. That is the real story of the India-Canada reset. Not friendship. Not forgiveness. A calculated bet by two countries that need each other more than they need to be right."

What's Still Unresolved

The Nijjar investigation has not been closed. The Royal Canadian Mounted Police (RCMP) investigation into the killing continues, and the Canadian judicial process is ongoing. Three Indian nationals — Kamalpreet Singh, Karanpreet Singh, and Karan Brar — were charged in connection with the murder in May 2024 and are facing trial. India has not acknowledged any state involvement.

Canadian public opinion toward India remains cold. A 2025 Nanos Research poll found that only 30% of Canadians held a favourable view of India — down from 52% in 2022. The Sikh diaspora, which numbers approximately 770,000 in Canada and is politically influential in Ontario and British Columbia, has been vocally critical of the reset. Several opposition members of Parliament walked out of the welcome ceremony for Carney upon his return from New Delhi.

The structural values gap between the two countries also persists. Canada has contributed approximately C$17.6 billion in financial and military assistance to Ukraine since 2022. India has maintained what it calls "strategic autonomy" — but which includes continued purchase of Russian crude and fertilisers, and abstention from UN resolutions condemning Russia's invasion. This divergence on the defining geopolitical conflict of the era is not easily reconciled.

The reset is real. The deal is done. The question is whether it survives the next political cycle in either country, and whether the CEPA can actually be concluded against the backdrop of unresolved tensions that have not disappeared — they have merely been set aside.

Sources: Globe and Mail (March 2–5, 2026); Al Jazeera (March 3, 2026); Ministry of External Affairs, Government of India (March 2, 2026); Cameco Corporation investor release (March 2, 2026); Statistics Canada; World Nuclear Association Uranium Database (2025); RBI Annual Report (2024); Nanos Research Canada-India Poll (Nov 2025); CII-Canada Trade Modelling Report (2025).