India and Canada have appointed new envoys, marking a substantial step toward normalizing their relations following a major diplomatic standoff.

India's Foreign Ministry said it will assign its current envoy to Spain, Dinesh Patnaik, to Canada — while Christopher Cooter will be Canada's new high commissioner to India.

Why did India-Canada relations become strained?

The rift stemmed from former Canadian Prime Minister Justin Trudeau's allegations that Indian agents were involved in the assassination of Sikh leader and activist Hardeep Singh Nijjar.

According to media reports, Nijjar was a prominent organizer in the Sikh community in Canada. He was also a proponent of the so-called Khalistan movement, which calls for a Sikh homeland by carving out an ethno-religious state in India's Punjab region.

The movement dates back to India and Pakistan's independence in 1947, when the idea was pushed forward in negotiations preceding the partition of the Punjab region between the two new countries.

India dismissed Trudeau's claims as "absurd" and politically motivated, leading to the reciprocal expulsions of top envoys. 

Roadmap to warmer ties

After a fractious period of several months, Indian Prime Minister Narendra Modi met with his Canadian counterpart Mark Carney in June during the G7 leaders' summit held in Kananaskis, Canada.

Both agreed to take "calibrated and constructive steps to restore stability in the relationship." 

"The appointment of a new high commissioner reflects Canada's step-by-step approach to deepening diplomatic engagement and advancing bilateral cooperation with India," said Canada's Minister of Foreign Affairs Anita Anand following the appointment.

Foreign policy experts and diplomats believe that the re-opening of high-level diplomatic dialogue signals hope for pragmatic engagement, paving the way for resumed trade talks and meaningful strategic alignment, especially vital in shifting global trade dynamics and regional security interests.

"When this crisis broke in 2023, and further escalated last year, both countries brought a mixture of outrage, hubris, and complacency to the table," David Mckinnon, a former senior Canadian diplomat, told DW.

"And each in its own way assumed its 'special' relationship with the USA would be to their advantage in resolving this issue."

Reducing US dependence, diversifying ties

The troubled period between India and Canada was marked by disrupted visa services, consulate closures, stalled trade and investment, travel caution advisories and damaged trust.

"Obviously, the return of Donald Trump as US President and his increasingly destructive role in the world have completely changed that calculation in Ottawa and Delhi," said Mckinnon, pointing out that it was time for both countries to align on economic and security-related matters.

"For somewhat different reasons, both countries need to diversify away from reliance on the US. For both, though, this imperative is urgent and immediate," he added.

Ajay Bisaria, a former high commissioner to Canada, said the new envoys will develop a roadmap for stabilization, normalization, and eventually elevation of the strained bilateral relationship.

"Cautious optimism permeates the air regarding the improvement of India-Canada diplomatic ties. Canada now appears to prioritize its national interests over diaspora politics in its foreign policy dealings, which may reduce the irritant factor," Bisaria, who co-chairs a Track II think tank initiative, told DW.

Nearly 800,000 Sikhs live in Canada, the largest community outside of Punjab, and the Sikh diaspora often stages activism and peaceful protests for Sikh causes.

"The political turbulence that was becoming an issue for Canadian investment in India has subsided," Bisaria added, pointing to how Canada continues to grapple with challenges from US volatility.

"In fact, Canadian institutional investment is projected to double from the current $100 billion (€85.9 billion) by 2030, as India emerges as a strategic diversification opportunity amidst the volatility in China and the US," said Bisaria.

Cautious diplomatic engineering

Moreover, Bisaria emphasized that the India-UK trade agreement, along with the potential India-US and India-EU deals, will provide a fresh template for the paused talks on an India-Canada interim trade agreement.

"Both sides may take stock of the upended trade order and the web of new bilateral deals they'll have in place this year. By next year, when the dust settles, they could resume conversations on the bilateral free trade agreement," he added. 

Some experts believe the future of the India-Canada relationship will depend on whether they can discuss security concerns without them becoming burdensome to bilateral ties.

Shanthie Mariet D'Souza, president of Mantraya, an independent research forum, told DW that a reset in relations could not have happened without Canada agreeing to address some of India's concerns.

New Delhi has repeatedly criticized Ottawa for being soft on supporters of the Khalistan movement, which is banned in India but has support among the Sikh diaspora, particularly in Canada.

"The new Canadian administration aims to improve its ties with India by moving past a difficult history that has negatively affected its reputation. It would have assured New Delhi that Canadian law would take a firm stance against trends that threaten India's security," said D'Souza.

She also believes that the Trump administration's unilateral tariff policy is playing a significant role in prompting India and Canada to seek partnerships and markets globally.

Both countries, she said, are focusing on restarting trade talks under the Early Progress Trade Agreement (EPTA), seen as a precursor toward the broader Comprehensive Economic Partnership Agreement (CEPA) with discussions covering areas like goods, services, clean energy, digital transformation, and supply chain resilience.

"Although this may not be sufficient for India to compensate for its faltering partnership with the US, New Delhi has little choice but to salvage what it can. A new multipolar world order is in the making. While this transition is unsettling, nations have no option but to adjust their policies accordingly," said D'Souza.

Edited by: Keith Walker