About the Author: Nishesh Sharma
Nishesh Sharma is a postgraduate student of Political Science at the University of Delhi, with academic interests in public policy, governance, and international relations. His work focuses particularly on comparative policy analysis and contemporary global issues.
By early 2026, however, the bilateral picture was more complex than narratives of a complete ‘breakdown’ suggest. The political transition in Ottawa, with Mark Carney replacing Trudeau as prime minister in 2025, created new political space to reconsider the costs of prolonged estrangement. Unlike his predecessor, Carney has avoided public attribution of responsibility to the Indian government in the Nijjar case, choosing instead a more restrained and process-driven posture that has lowered the rhetorical temperature between the two sides. The reconciliatory meeting between Indian Prime Minister Narendra Modi and his Canadian counterpart Mark Carney at the G7 summit in Kananaskis in June 2025, followed a decision to restore full diplomatic representation and resume visa services, signalled that both capitals now see value in rebuilding ties. The task in 2026 is to translate this tentative thaw into a more durable framework for engagement, without wishing away the underlying disputes.
The Legacy of the Nijjar Crisis
The crisis had three interlocking dimensions. First, it exposed sharp differences over the Khalistan question and the boundaries between legitimate political activism and violent extremism. For New Delhi, figures like Nijjar are part of a network that sustains separatist rhetoric. They target Indian diplomats and have inspired attacks on consular facilities on foreign soil. For Ottawa, Nijjar was a Canadian citizen whose killing raised grave concerns about foreign interference and transnational repression on Canadian soil. Beyond the immediate political fallout, such an act strikes at the core principles of sovereignty and non-intervention, challenging established norms of international law governing the use of force and state conduct abroad.
Second, the row highlighted how diaspora politics can distort foreign policy goals. Canadian federal and provincial politicians have long courted segments of the Sikh diaspora that are vocal on Punjab and Khalistan, seeing them as important electoral constituencies. New Delhi, in turn, reads this as permissive “vote-bank politics” that underrate India’s security concerns. Political gains at home, in Punjab and in key Canadian constituencies, encouraged escalation rather than restraint.
Third, the episode showed the limits of institutional insulation in the relationship. Trade, education and immigration had been the ballast in India–Canada ties, but they proved insufficient to prevent a free fall once the traditional realist security narrative took over. Trade negotiations on a Comprehensive Economic Partnership Agreement (CEPA) stalled, Canadian consular capacity in India shrank, and student and business mobility became collateral damage.
The 2025 Reset: Pragmatism Over Posturing
The shift in 2025 post the G7 meeting in (add place), was not due to either side agreeing on each other's narrative on the Nijjar issue. Canadian intelligence authorities continued to stress concerns about Indian involvement and broader patterns of transnational repression, while New Delhi rejected these accusations as politically motivated and unproven. What changed was the strategic calculus of both capitals.For Ottawa, a prolonged breakdown with India sat uneasily with its stated Indo-Pacific strategy, which casts India as a key partner in diversifying trade, reducing overdependence on China and contributing to regional security. For New Delhi, Canada matters in critical minerals, energy, agri-trade and as a major destination for Indian students and migrants. The opportunity costs of freezing ties were becoming harder to justify.
The Modi–Carney interaction at Kananaskis, and their joint participation in the commemoration of the 1985 Air India Flight 182 bombing established a symbolic bridge. The subsequent announcement that both sides would restore full diplomatic strength, re-open stalled channels and resume technical talks on trade and mobility reflected a pragmatic decision to separate unresolved security cases from broader state-to-state cooperation. This approach is consistent with India’s handling of other difficult relationships, notably with China, where deep political and economic engagement has continued despite unresolved security disputes, reflecting a preference for compartmentalisation over comprehensive disengagement.
4 Priorities for Rebuilding in 2026
The immediate challenge in 2026 is not to romanticise the reset but to sequence it carefully around four priorities.
First, stabilising the political channel. Regular leader and minister-level contact must become the norm rather than the exception. While the 2025 G7 interaction created an example for frank but structured dialogue, foreign and national security advisers now need a dedicated mechanism to address specific cases of concern, intelligence-sharing and red lines on violent activity. Without such a channel, the next crisis, whether a protest outside an embassy, an inflammatory referendum or an intelligence leak, could once again drive policy by headline.
Second, managing diaspora and extremism. No reset will be credible in New Delhi if attacks on Indian diplomatic and community targets in Canada are seen to continue with impunity. Conversely, any sign that Ottawa is willing to downplay justice in ongoing homicide investigations will invite domestic backlash and legal scrutiny at home. The way forward lies in law-based cooperation, faster responses to extradition and mutual legal assistance requests, shared criteria for proscribing violent organisations, and a clearer public distinction between peaceful political advocacy and incitement to violence.
Third, rebuilding the economic and knowledge pillars. Even at the height of the crisis, bilateral trade did not collapse, which underlines the underlying economic complementarity. Total trade in goods and services continued to climb, reaching approximately US $23.66 billion in 2024, with merchandise trade alone near US $8.98 billion, and goods trade in 2023 alone exceeding US $8 billion. For instance, Indian need for Canadian pulses, fertilisers and critical minerals, and Canada's interest in India’s market and skilled workforce. The resumption of visa services and restoration of consular staffing should be leveraged in 2026 to revive CEPA negotiations and to create fast-track channels for investment, while providing greater predictability for students and workers who move between the two countries.
Fourth, situating the relationship in a wider strategic framework. India and Canada are unlikely to converge fully on all regional questions, but they share interests in maritime security, resilient supply chains and rules-based trade in the Indo-Pacific. For Ottawa, working with India offers a safeguard against an overly China-centric approach to Asia, whereas for New Delhi, engaging with Canada adds depth to its network of middle-power partners in North America beyond the United States. Joint work on climate technology, critical minerals and digital governance would anchor the relationship in forward-looking domains, making it less vulnerable to single-issue shocks.
A Difficult but Necessary Maturity
Rebuilding India–Canada relations in 2026 will not mean erasing disagreement over the events of 2023 or fully aligning views on diaspora politics. Investigations in Canada and continuing Indian concerns about separatist mobilisation ensure that contention will remain part of the landscape. But the experience of the last two years has clarified the costs of letting a single, however serious, security dispute define the entirety of a historic relationship. For India, this episode is a reminder that its growing global role will invite closer scrutiny of its security methods abroad and raise complex questions about the cautious balance between counter-extremism and respect for other states’ sovereignty. For Canada, it has underlined that domestic political incentives cannot be the sole compass for dealing with a large, strategically important partner, especially when security and diaspora issues intersect. The emerging reset suggests that both sides are now more willing to accept these uncomfortable realities. If 2023–24 marked the nadir of India–Canada ties, 2026 will test whether New Delhi and Ottawa can move from reactive crisis management to a more mature, interest-driven engagement—one that accepts disagreement, manages friction and invests steadily in the broader economic and strategic partnership that both countries, for different reasons, find increasingly difficult to ignore.