Carney working on trip to India and possible trade deal

OTTAWA — Prime Minister Mark Carney plans to make a potentially important visit to India in the next couple of months, government officials have confirmed, as Canada continues efforts to diversify trade, attract investment and mend international fences.  

While government officials emphasize that the trip hasn’t been finalized and wouldn’t necessarily mean any deals if it occurs, the intensity of the planning in Ottawa suggests that the two countries are trying to heal wounds and perhaps revive talks on the comprehensive trade deal that they almost signed under former prime ministers Stephen Harper and Justin Trudeau.  

Canada and India first launched talks on a comprehensive deal in 2010 that would have opened markets by reducing barriers on goods, services and investment. But after 10 rounds of negotiations, the two countries finally halted discussions more than a decade later amid tensions between the two governments.  

The time may now be right to get a deal over the finish line, as both countries may be more motivated.  

India has made free-trade deals a priority since being slapped in August with a 50 per cent tariff by U.S. President Donald Trump on exports entering the U.S. market. India and the European Union (EU) finalized a comprehensive trade deal Tuesday that the two sides described as “the mother of all deals.”  

The Canadian economy has also been hit by U.S. tariffs and the Carney government has made trade diversification perhaps its top priority. Canada signed a trade deal last week with China, another country that represents a huge opportunity for increased exports — and a difficult relationship in recent years.  

Fen  Hampson, an international affairs specialist at Carleton University in Ottawa, said Carney should prioritize getting a free-trade deal with India as quickly as possible.  

“To reap the dividends, now is the time to move into high gear.”  

The U.S. has in recent years been the destination for more than three-quarters of Canadian exports, but tariffs imposed earlier this year on key products, including steel, aluminum, automobiles and auto parts, softwood lumber and certain minerals, have been a big blow to those industries and the domestic economy.  

According to recent government data, China is the number two market for Canadian products, although that country buys only about 4 per cent of total exports. India ranks tenth with only 0.7 per cent of Canadian exports.  

Ottawa’s response to the U.S. tariffs has included a concentrated effort to expand and diversify trade, although the government is aware that it first needed to begin repairing relationships with China and India, the world’s two most populous countries and potentially important sources for export growth.  

The planned visit to India can be traced back to a conversation in June between Carney and Indian Prime Minister Narendra Modi on the sidelines of the G7 Summit in Kananaskis, Alta., when the two leaders agreed on the importance of “restarting” ministerial discussions.  

Since then, the two countries  appear already to have taken steps toward a better relationship and increased trade.  

Foreign Affairs Minister Anita Anand visited Delhi and Mumbai in October and Tim Hodgson, Canada’s minister of energy and natural resources, was in Goa Tuesday at the invitation of his Indian counterpart  Hardeep Singh Puri  to attend India Energy Week 2026. Hodgson’s visit marked the first time a Canadian cabinet minister had participated in the annual event.   

Energy, along with mining and agriculture, is a sector where the two countries would appear to have opportunities to expand trade.   

According to a press release Tuesday, Hodgson and Puri discussed the importance of energy security and supply diversity. Canada aims to become an “energy superpower” and hopes to increase exports of liquified natural gas (LNG), liquified petroleum gas (LPG) and crude oil to Asian markets, while India’s appetite for energy is climbing.   

Both Canada and India seem keen to boost trade through more open markets. Canada needs to fill in as much of the gap as possible from its reduced exports to the U.S. and Carney told reporters Tuesday that his government has signed 12 new trade deals over the last six months. India, meanwhile, concluded a comprehensive trade deal with the United Kingdom last year and the EU on Tuesday. India is also reportedly close to reaching a comprehensive trade deal with Australia.  

After more than a decade of trade talks, negotiations between Canada and India officially fell apart in 2023 amid tumbling relations between the two governments and an inability to find a compromise over some market access questions. Trudeau and  Modi had had a difficult relationship since the Canadian leader’s poorly received state visit to India in 2018.  

But the relationship erupted into a major rift in 2023 when Ottawa publicly accused the Modi government of being involved in the murder of Hardeep Singh Nijjar, a Canadian Sikh separatist, on Canadian soil. India denied the allegation as the two countries expelled each other’s diplomats.  

If the two countries can move forward with a comprehensive trade deal or significant sectoral accord, it may provide some relief for Canadian exporters and would mark a second major step in Carney’s efforts to diversify trade.  

Carney and Chinese President  Xi Jinping agreed to a trade deal last week that  was essentially a swap of much lower tariffs on Chinese-made electric vehicles (EVs) being allowed into Canada for lowering tariffs on Canadian agricultural and seafood exports to China.  

Trump initially said the deal was a good step for Canada but then later criticized it and threatened 100 per cent tariffs on all Canadian goods if Ottawa proceeded.  Carney said Canada  now has 12 new deals on four continents over the last six months.  

National Post

Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our daily newsletter, Posted, here.