Prime Minister Mark Carney’s Strategic Pivot to India Amid Global Trade Shifts

In a significant move to strengthen Canada’s international economic position, Prime Minister Mark Carney has embarked on a high-profile trade mission to India, beginning February 27, 2026. The visit, spanning Mumbai and New Delhi, aims to advance negotiations toward a Comprehensive Economic Partnership Agreement (CEPA) with an ambitious target of more than doubling bilateral trade to $70 billion by 2030. This initiative comes as Canada seeks to diversify its export markets and reduce vulnerability to potential U.S. trade pressures, particularly with the upcoming review of the United States-Mexico-Canada Agreement (USMCA).

Background: Resetting Canada-India Relations

Relations between Canada and India had faced challenges following diplomatic tensions in 2023 related to security concerns. However, under Prime Minister Carney’s leadership, both nations have worked to rebuild trust through enhanced security cooperation and dialogue. Recent statements from Canadian officials indicate confidence that certain past issues are no longer active, paving the way for renewed engagement. This thaw was further solidified during Carney’s meeting with Prime Minister Narendra Modi at the G20 summit in Johannesburg in November 2025, where formal CEPA negotiations were launched.

The current visit marks Carney’s first official trip to India as prime minister and represents a key step in operationalizing this reset. In Mumbai, Carney is engaging with business leaders, pension fund managers, industry executives, and innovators from both countries. These interactions focus on investment opportunities, particularly from Canadian pension funds, which manage substantial assets and have shown interest in India’s infrastructure and growth sectors.

Key Objectives of the India Trade Tour

The centerpiece of the discussions is the CEPA, which seeks to eliminate tariffs on the majority of goods, facilitate services trade, boost investment flows, and address areas such as agriculture, digital commerce, labor mobility, and sustainable development. Current bilateral trade stands at around $30-35 billion annually, making the $70 billion goal a substantial leap that could generate incremental growth of approximately $6-7 billion per year.

Canada brings strengths in energy resources (including oil, natural gas, uranium, and liquefied natural gas), critical minerals (lithium, cobalt, nickel), and agricultural products (pulses, wheat, canola). India, as the world’s fastest-growing major economy with a young population and rising demand, offers vast opportunities for these exports. In return, Canada gains access to India’s expanding manufacturing base, technology talent pool, and consumer market.

Additional cooperation pillars include technology and innovation through trilateral frameworks like the Australia-Canada-India partnership, defense industrial ties, and talent mobility programs to address labor shortages in tech sectors.

Broader Geopolitical and Economic Context

This pivot occurs against the backdrop of evolving North American trade dynamics. With potential tariff threats from the United States and the USMCA review underway, Canada is actively building alternative partnerships. The India deal, while not replacing U.S. trade (which totals around $700 billion annually), provides a meaningful diversification buffer. Similar efforts are extending to Australia and Japan during Carney’s broader Indo-Pacific tour through early March 2026.

Experts view this as part of a pragmatic foreign policy emphasizing economic outcomes, job creation, and sovereignty. For India, the partnership enhances its global standing, supports energy security, and attracts investment in key sectors aligned with its development goals.

Potential Impacts and Outlook

If successful, the CEPA could reshape supply chains in critical areas like batteries, renewables, and digital technologies, benefiting businesses and consumers in both nations. Interim announcements during the Chief Executives Forum on March 2 are anticipated, including investment commitments and sector-specific MOUs.

The visit underscores a shared interest among middle powers in fostering resilient, diversified economic networks amid global uncertainties.