Canada’s elections have unfolded at a time when its close ally has drifted away

Mark Carney will retain the office of Prime Minister of Canada as the Canadians have put a seal of approval on his candidature. He was declared the winner in Canada’s federal election, promising to fight against US President Donald Trump’s trade war and threats of annexation. While Carney’s Liberal Party has won the election by a slender margin, the result puts to rest various theories of instability in the system and the future of Canada itself. Canada has put overwhelming faith in Carney as they feel he is the person who can talk to Trump in his language. Canada’s elections have come at a critical moment on the world stage, with global trade tensions reshaping traditional alliances.

Notably, the ongoing influence of Trump-era tariffs continues to cloud Canada’s trade relationships — especially with the United States, its largest economic partner. The elections have brought to power a leadership that faces immediate pressure to redefine Canada’s external economic posture. The political establishment is now more aware than ever of the vulnerabilities exposed by US protectionism during Donald Trump’s second presidential term.

Tariffs on Canadian steel, aluminium, and other goods have left lasting scars on Canada’s perception of its reliance on American markets. This environment has prompted Canadian policymakers to look beyond the US for more resilient and diversified trade partnerships. India, with its massive economy and growing geopolitical clout, is naturally one of the foremost candidates.

For India, the elections signal an opportunity to deepen economic and strategic engagement with Canada’s new regime. Talks around a Comprehensive Economic Partnership Agreement (CEPA) between the two nations have been on and off for years. The post-election moment could inject new urgency into these discussions. Canada’s need for diversified markets aligns well with India’s ambitions to increase exports and attract investment.

However, for that to happen, Canada and India would have to develop a mechanism to mitigate distrust and both nations will have to take baby steps to build confidence and repair relations, which took a beating in the wake of terrorism directed at India from Canadian soil. The relations between the two countries were at their lowest ebb during Justin Trudeau’s regime, which Carney has tried to mend. Earlier this month, Canadian Prime Minister Mark Carney joined the Hindu community in celebrating Ram Navami. It signalled Carney’s resolve to mend fences with India. Beyond trade, there are shared interests in technology collaboration, education exchanges, green energy transitions, and the critical minerals sector — where India has a growing appetite and Canada boasts abundant resources. A friendlier, more trade-oriented Canadian Government could facilitate greater Indian investment in Canadian sectors and vice versa.

Additionally, Canada’s large and politically significant Indian diaspora one of the largest outside India — will continue to play a bridge-building role, especially if the new Government recognises and leverages this demographic strength.

However, challenges remain. Diplomatic ties have occasionally been strained over issues such as Sikh separatism and differing geopolitical alignments. Recent tensions involving Khalistan sympathisers have caused friction, and even a pro-trade Government would need to carefully navigate domestic political sensitivities. Moreover, Canada’s closer ties to the US — despite the tariffs — will not disappear overnight. India’s evolving ties with the US, including in areas like the QUAD security dialogue, could smooth some of these frictions but they will not eliminate them altogether.

Canada’s elections, set against the backdrop of lingering Trump-era trade disruptions, offer a pivotal opportunity for Ottawa to recalibrate its foreign and economic policies. For India, this could mean a more open and motivated partner willing to invest in a broader, more diversified bilateral relationship.

But success will depend on political will, strategic patience, and a willingness to address longstanding irritants with pragmatism. If handled wisely, the next few years could usher in a new era of India–Canada cooperation — less reliant on the ebb and flow of US politics, and more focused on shared growth and global influence.