India ties a test for new Canadian PM Carney

Special to The Tribune

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Mark Carney’s landslide victory as the new Liberal leader and successor to Canadian Prime Minister Justin Trudeau is expected to bring a significant shift in the country’s political landscape, both domestically and internationally.

A career economist and a former Governor of the Bank of Canada, Carney’s immediate focus after taking charge would have to be on managing domestic challenges and foreign policy. A key concern is the retaliatory tariff announced by US President Donald Trump, which threatens to disrupt Canada's economy and job market. With federal elections approaching, political observers believe his leadership would have implications for the Liberal Party.

Observers, however, say it will have to be watched out whether Carney’s entry and Trudeau's exit would improve Canada’s strained ties with India. Some Liberal leaders believe though the party’s election may not mean immediate policy changes, Carney’s leadership and economic expertise could shape Canada's approach to India in various ways.

Relations between New Delhi and Toronto are currently at lowest ebb, deteriorating sharply after Trudeau accused Indian agents of being “actively involved” in the 2023 killing of pro-Khalistan activist Hardeep Singh Nijjar. This triggered a major standoff, with both countries expelling each other’s diplomats.

While Carney has not publicly commented on the Khalistan issue, his approach on the matter--in comparison with Trudeau--remains to be seen, say the observers. His real challenge, however, would be dealing with Khalistani sympathisers who had an influence even within the Liberal Party, they say.

A more “cooperative stance” on security issues is expected to improve relations between the two countries, but much will depend on how Carney navigates domestic political pressures, particularly from the Sikh and Indian diaspora.

Trade is another factor that could decide the relations between the two countries. With Carney being a career economist, he could opt to set aside contentious issues and resume talks on trade, which have been stalled since 2023 due to diplomatic tensions. He may prioritise trade and investment, given India's growing role in the global economy. Before being elected to the post, Carney had vowed to “rebuild” the India-Canada trade ties.

Another issue that concerns India is Canada's recent change in immigration and education policies. India is the largest source of international students in Canada, but the restrictions on student permits and changes to rules governing the issuance of work permits have put the future of thousands of Indian students at stake.

While Carney's approach on these issues remains unclear, analysts believe his focus on economic growth could lead to policies attracting high-skilled Indian professionals and students, which would benefit both nations.

While Carney has the potential to engineer a more constructive partnership with India by recasting trade and immigration policies, much will depend on how he addressed New Delhi’s concerns on the Khalistan movement in Canada, says a foreign policy expert.