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In First Major Test of His Davos Logic, Carney Visits India to Rebuild Trust

Two middle powers seek common ground after a prolonged diplomatic rupture

In his now-famous speech in Davos last month, Prime Minister Mark Carney warned that middle powers must band together or risk ending up “on the menu.”

His pitch rested on a simple proposition: middle powers, like Canada and India, which sit between a volatile United States and an assertive China, need one another. They should build enough connective tissue to avoid being isolated when the big players turn inward or hostile. It was a neat idea that will face its first serious test when Carney meets Prime Minister Narendra Modi on Monday, during his maiden official visit to India.

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The bilateral starting point is not promise but damage. The 2023 episode when then prime minister Justin Trudeau alleged Indian involvement in the killing of Sikh separatist Hardeep Singh Nijjar on Canadian soil tore through a relationship that was already fragile. Trade talks that had been presented as close to an initial agreement were quietly suspended. Political trust, already thin, snapped.

Carney inherited that landscape. In New Delhi, there is a settled view that Canada has been indulgent toward Sikh separatist outfits that violently target India, fundraise in Canada, and run noisy campaigns for the creation of Khalistan—an independent Sikh state—from a safe distance. In Ottawa, there is a firm belief that New Delhi overstates the terror threat and fails to accept the constraints of a liberal system on political campaigns. Each side questions the other’s good faith.

They have tried to bridge the gap with the understandings arrived at during the visit of the Indian national security adviser, Ajit Doval, to Canada earlier this month, when he met his Canadian counterpart, Nathalie Drouin. And on the eve of Carney’s visit to India, an unnamed senior government official said the Canadian government no longer believes India is still meddling in the country through foreign interference, transnational repression, or violence, though the official did not offer an explanation for how the government had arrived at the conclusion. Without retracting the official’s remarks, the Prime Minister’s Office later said the government will continue to combat transnational criminal acts on Canadian soil, noting that respect for the law is key to Canada’s efforts with India.

Mistrust still risks bleeding into every policy conversation, from visas to trade. If there was a deep, mutually beneficial economic relationship underneath, it might help carry the weight of these disputes. There is not. Bilateral trade in goods and services stood at just over $30 billion in 2024, a minuscule figure given the scale of both economies. India was only Canada’s seventh‑largest goods and services trading partner in 2024, according to Export Development Canada, and Canada sits well outside India’s top trading partners, including some European economies. Canada ranks seventeenth among India’s foreign investors, according to India’s Ministry for Commerce and Trade.

But the economic logic of co-operation exists. India is the fastest-growing large economy in the world and desperately needs energy, capital, and technology, while Canada is a resource-rich democracy that wants to diversify away from its dependence on the American market and from Chinese demand.

Dinesh Patnaik, India’s high commissioner to Canada, expects formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA) to begin in March and says a pact “could be signed” within a year of launching talks. The temptation, in both capitals, will be to overstate the outcome of Carney’s visit, to label a handful of deals as a corridor or a new phase. The more honest aspiration might be more limited. Two middle powers, both jolted by US president Donald Trump’s antics and by the brittleness of the global order they benefited from, are trying to see whether they can do business with each other without resolving their deepest disagreements. That is a narrow goal. Given recent history, it will still count as progress.

The deep track of co-operation between Ottawa and New Delhi runs through energy and minerals. The two countries recently relaunched their Ministerial Energy Dialogue. On uranium, current talks aim at a new supply deal of about $2.8 billion (US) over ten years. For India, it is a hedge. It spreads import dependence across more partners, preventing overreliance on any one supplier, like Russia. For Canada, it offers stable demand for its uranium sector and sends a political signal that it is willing to back India’s energy transition.

But India is one market among several at a time when Canada is also courting European and Asian buyers looking to diversify away from Russian fuel. Environmental concerns, provincial politics, and local opposition put a ceiling on how far and how fast uranium exports can grow. For India, nuclear power still accounts for only about 3 percent of electricity generation, with coal providing 70 to 75 percent and imported oil, including discounted Russian crude, meeting over 80 percent of its crude import mix. Canadian uranium is useful diversification for a civil nuclear program that remains a small share of the total energy mix. It will not change the energy system anchored in coal and cheap oil from Russia and the Gulf.

Liquefied natural gas is often described as the next pillar. Canada holds roughly 1.3 percent of globally proven gas reserves and is trying to build out LNG export capacity from its west coast, with projects like LNG Canada coming online only last year after delays and cost escalation. India is the world’s fourth‑largest LNG importer and will remain so, but it already has long-term supply contracts with Qatar, Russia, and others, and it imports 28–30 million tonnes annually from closer, cheaper suppliers. Geography and price are stubborn. Canadian gas must be liquefied, shipped across the Pacific, and then regasified in Indian terminals. Transport costs are high, and Indian buyers are price sensitive.

By way of an LNG deal with Canada, India gains flexibility against shocks in West Asia or Russia. For Canada, every piece of cargo sent to India is one less unit of dependence on the American market and one more point of entry into an Asian story that has mostly passed it by. But unless Canada is willing to accept thinner margins for strategic reasons, or India is willing to pay more for origin diversification, this will remain a niche rather than a mainstay.

Oil is more complicated. India buys discounted Russian crude, Gulf crude, and imports from Africa and North America. Canada exports most of its oil to the US. But even modest volumes of crude to India can create the habits of co-operation that make future scaling easier when infrastructure expands. A bilateral energy relationship between two democracies does not solve all vulnerabilities, but it does reduce exposure to the most aggressive forms of coercion from erratic leaders.

The world’s renewable energy transition will rest on batteries, electric vehicles, solar panels, and wind turbines. Those technologies rely heavily on critical minerals, such as lithium, cobalt, nickel, and rare earths. Today, China dominates processing and often controls key mines. The US, the European Union, Japan, Australia, and India are all scrambling to reduce that dependence. Canada sits on significant reserves of many critical minerals and is seeking partners who can bring capital and offtake commitments. As things stand, India accounts for just around 2 percent of Canada’s critical minerals exports, and New Delhi has recently auctioned blocks, eased some rules, and openly framed critical minerals as a strategic resource, creating an opening for a potential partnership.

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On paper, the fit looks clean. On the ground, timelines are long and risks high. Environmental assessments, negotiations with Indigenous rights holders, and many other issues can drag out mining projects in Canada. India still lacks serious domestic refining and processing capacity. Without a clear plan for where ore will be turned into usable inputs, talk of a Canada–India critical minerals corridor sounds more like an aspiration than a near‑term prospect.

Technology is another area of possible co-operation. Canada has genuine strengths in AI and quantum research, with exports of commercial services to India, including information and communication technology and education, reaching $16.1 billion in 2024. India has scale, talent, and an increasingly assertive digital policy. Yet, beyond a handful of memoranda of understanding and pilot collaborations, the digital relationship remains thin relative to India’s ties with the US or Europe.

Joint work in quantum encryption and communications that helps both sides resist future surveillance capabilities of big powers and firms would be natural extensions of capabilities that already exist. Ottawa’s instinct is to stress safeguards, privacy, and regulation, while New Delhi stresses sovereignty, localization, and control. These do not make deep technology integration impossible, but they do complicate the picture.

Where the relationship is already dense is not energy or technology but people. That should be a glue but has instead become an irritant. Indians are the largest international student group in Canada’s post-secondary education system. This flow has grown so fast that critics have argued it has overwhelmed the immigration system and local housing markets, and abuses have followed. The Canadian government’s recent moves to tighten visa conditions, cap certain intakes, clamp down on dubious private colleges, and limit off‑campus work rights are partly a response to those problems, but they have been felt in India as a sudden closing of doors.

Temporary work permits provide a second channel. Canadian employers have come to depend on Indian workers in technology, health care, and services. That dependence cuts both ways. When Ottawa slows down processing or raises the bar, it affects household calculations in Indian states like Punjab, Gujarat, and Telangana.

Diaspora politics stretch that rope even further. Khalistan‑linked activism in Canada is small in numbers but loud in impact. Posters, referendums, and provocative slogans against Prime Minister Modi may fall within Canadian legal protections, but in India, they play on prime-time news and social media as evidence of Canadian perfidy. Security incidents, or even the perception of them, quickly become nationalist flashpoints.

The Nijjar case showed how fast this can escalate to accusations of state‑sponsored killing and retaliation through diplomatic expulsions. Every time the diaspora becomes front-page news, it makes the quiet work of trade, energy, and student policy that much harder.

India is reciprocating Carney’s view. Patnaik told Reuters that the two countries now move with “a sense of urgency” in a world where “the natural rules‑based order which gave a certainty to the world is not functioning.” But Canada is not central to its strategic map. The US, China, and Russia occupy the top tier, with the Gulf, Japan, and Europe in the rung just below. Canada is a secondary partner, valuable but not vital. It provides pension capital, a safety valve for students and workers, and some technology and energy options. It is also seen as easily influenced by domestic lobbies, quick to moralize and slow to take Indian security concerns seriously. That combination does not inspire confidence.

For Ottawa, India is both a massive opportunity and a reputational risk. It offers growth, a large market, and a way to justify an Indo‑Pacific policy that is more than words. It also raises questions at home about human rights, minorities, and democratic backsliding. The Liberal Party has to sell any India pivot not only to New Delhi but also to its core supporters, who are wary of appearing to endorse Modi’s domestic agenda. That political constraint has not gone away with Carney as prime minister. He is seen as serious, numerate, and less given to empty flourish than some of his predecessors. But he, too, cannot escape these structural tensions.

If the visit goes well, there will likely be movement on a longer-term uranium supply understanding, a clearer framework for student and worker mobility that addresses fraud without slamming doors, and agreements on energy, minerals, and artificial intelligence, along with smaller deals on nuclear energy, oil and gas, the environment, AI, quantum computing, education, and culture. None of this would be spectacular. It would, however, be real and sit well within a wider response to a more volatile global trade environment.

If it goes badly, it will probably not be because of uranium or LNG. It will be because something in diaspora politics or the security domain flares up again. In that sense, the real constraint on Canada–India co-operation is not a lack of areas where interests align. It is a lack of insulation from domestic agendas. Almost every positive initiative can be derailed by a political shock that pulls old grievances back to the surface.

All of this suggests a more modest reading of what Carney’s India visit can realistically achieve. It won’t be the launch of a new era. It will be a test of whether two countries that have serious unresolved disputes can still build limited, interest‑driven co-operation in specific sectors.

Ottawa and New Delhi should not pretend that they fully share each other’s values or that their political irritants have disappeared. This is a functional model of co-operation. It must recognize that the two countries will continue to disagree on human rights language, diaspora politics, and the boundaries of security policy. At the same time, it will show that in the hard world of trade, energy, minerals—and geopolitics—sentiment matters less than reliability.

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The Walrus, as a registered charity, is thriving amid dark times in the media industry because we’re engaging more and more readers who have a stake in their country’s future.

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