Vikas Pandey,India editorand

Nadine Yousif,Senior Canada reporter

Prime Minister Mark Carney is in India for a pivotal trip aimed at repairing ties with the world's largest democracy, as both countries seek to reduce their trade reliance on the US.

Carney began his visit in Mumbai, where he is meeting with business leaders. He will then travel to New Delhi for talks with Prime Minister Narendra Modi.

The trip marks a remarkable turnaround in relations, which had collapsed when Canada accused India of carrying out an extrajudicial killing of a Canadian Sikh separatist on Canadian soil — an allegation India strongly denied.

Both sides now appear ready to move forward.

Here's what has changed, and what each country hopes to gain as Carney's trip gets underway.

Squeezed by US tariffs, Canada repairs ties with former foes

For Carney, this trip is strictly business, aligned with his broader goal of diversifying Canada's trade partners to reduce economic dependence on the US.

A big focus will be making progress on a comprehensive free trade agreement with India, which has been discussed on-and-off for the last 15 years.

The latest derailment in trade talks occurred after former Prime Minister Justin Trudeau made a bombshell public accusation against India in 2023, alleging it was involved in the killing of Hardeep Singh Nijjar, a Sikh separatist, who was gunned down in British Columbia. Four men were later charged in his death, and their case is still before the courts.

India has repeatedly denied any involvement.

Now faced with US tariffs, and under Carney's more "pragmatic" approach to foreign policy, Ottawa is repairing ties with Delhi.

Still, the allegations remain a point of contention for some members of Canada's Sikh community, who say they continue to be targeted by India through transnational repression, and have criticised Carney for prioritising economic interests over their safety.

It is a situation that will require "delicate handling", Vina Nadjibulla, vice-president of the Asia Pacific Foundation of Canada, told the BBC.

Asked repeatedly about these concerns, Canadian officials told reporters ahead of Carney's trip that the two countries are engaged in "robust" discussions on national security and foreign interference.

They added that Canada does not believe the Indian government is currently linked to any violent crimes or threats on Canadian soil, and that they "probably would not be taking this trip" if that were the case.

Not everyone is convinced. Sukh Dhaliwal, an MP from Carney's Liberal party, told Canadian media that the claim of India no longer being a threat is "disconnected from the reality".

Canada has made several diplomatic overtures to India since Carney took office last year, beginning with inviting Modi to the G7 summit in Kananaskis, Alberta last summer.

That was followed by a series of meetings between Foreign Minister Anita Anand and her Indian counterpart, S Jaishankar, as well as a visit to Ottawa last month by India's national security advisor, Ajit Doval.

Carney's itinerary in India offers some insight into his priorities.

He will stop only in Mumbai, India's financial hub, to meet with business leaders, and New Delhi, where he will sit down with Prime Minister Modi on Monday.

Unlike Trudeau, Carney will not be visiting cultural sites like the Taj Mahal. Nor will he travel to Punjab, the home state of many of India's Sikhs, which was a stop for both Trudeau and another former prime minister, Stephen Harper.

Those stops were often seen as nods to Canada's large Indo-Canadian and Sikh communities. Their omission signals that, this time, Canada's focus is squarely on trade.

On the agenda will be discussions around energy, technology, artificial intelligence and defence, Carney's office has said, as well as attracting top talent to Canada.

Carney and Modi are also likely to discuss tariff policies enacted by President Donald Trump, which have had an impact on both their economies.

Heading into the trip, Canada remains the only G7 country that has not reached a preferential trade agreement with India. Nadjibulla of the Asia Pacific Foundation of Canada said that fact "adds urgency" for Carney.

"There is a window of opportunity, and it needs to be seized," Nadjibulla said.

A win‑win for India as it looks for new energy sources

It was in 2024, not too long ago, that both countries were openly trading barbs, suspending visa services and expelling diplomats.

But a lot has changed since then.

India is now more open for business, which is evident from a flurry of free trade deals that it has signed recently.

Then there is Trump, who has targeted both India and Canada with steep tariffs.

In Carney's own words, the world is "in the midst of a rupture, not a transition" and "if you are not at the table, you are on the menu".

For India's Prime Minister Modi, a reset with Canada is a win-win situation.

Domestically, the visit will boost Modi's image as a leader who refused to come under pressure from Canada.

Ottawa has already said it believes India is not currently linked to violent crimes or threats on Canadian soil.

But more broadly, it is the trade potential between the two countries that will drive the outcome of this visit.

Until recently, India was paying close to 50% tariffs for exporting goods to the US and has also come under pressure from the Trump administration to stop buying oil from Russia.

Since then, Delhi has been trying to diversify its energy portfolio.

Carney's visit is quite important in this context. While a wider trade deal might take time to conclude, there are some straight wins in the energy sector that the two sides will most likely announce.

The Modi government has been bullish on civilian nuclear power and wants to build more reactors, but it needs a steady supply of uranium to sustain the plan.

The two countries are likely to sign a 10-year uranium supply agreement.

Other deals focusing on increasing supply of crude oil and gas from Canada are also on the cards.

For India, any partner that helps it diversify its energy imports portfolio and ensure a long-term supply of uranium, oil, gas and coal is considered valuable.

Canada fits this definition quite well and Modi will most likely roll out the red carpet for Carney.

It's clear that Trump's use of punitive tariffs as a geopolitical pressure tool has shaken many global leaders out of their comfort zones.

As Carney put it, the rules-based international order is no longer a certainty and middle powers need to find ways to sustain each other.

The speed at which India and Canada have mended their relationship show that both prime ministers are well aware of today's global realities.