Carney Says India Can Help Diversify Supply Chains Away From China

Before meeting with Indian Prime Minister Narendra Modi last weekend, Prime Minister Mark Carney said rebuilding ties with India will help diversify supply chains away from China in the field of renewable energy.

“India is one of the leading developers of clean technology, particularly in solar and wind,” Carney told reporters in South Africa on Nov. 23 as he was attending the G20 Summit in Johannesburg.

Carney added that if Canada is going to diversify away from China, which he said is the “dominant player” in solar and wind, India and South Korea are “really the two main opportunities, so that cooperation is quite valuable.”

Carney had said after meeting with Chinese leader Xi Jinping in late October, the first meeting between the countries’ leaders since 2017, that wind energy generation was a potential area of cooperation with China.

Carney’s comments on India and China were part of a response to a reporter’s question asking whether Canada is moving too fast in rebuilding ties with India given concerns from the Canadian Security Intelligence Service (CSIS).

CSIS Director Dan Rogers spoke about transnational repression from India and China in a Nov. 13 public address. He said the way his agency tackles the respective threats hasn’t changed with Ottawa’s re-engagement strategy.

Meanwhile Carney told reporters Ottawa has to “remain vigilant” regarding “any forms of foreign interference.”

Ottawa is currently rebuilding damaged ties with India amid a push to diversify trade away from the United States.

Relations between Ottawa and New Delhi had collapsed in 2023 after Prime Minister Justin Trudeau accused India of having a hand in the assassination of pro-Khalistan activist Hardeep Singh Nijjar in B.C. India has denied the allegation.

Ottawa has emphasized that a law enforcement dialogue is continuing with India on such issues, as the two countries have normalized relations by reappointing high commissioners and also taken further steps to boost ties.

The two countries agreed to a new roadmap for their relations during Foreign Affairs Minister Anita Anand’s visit to India in mid-October. This was followed with a visit by International Trade Minister Maninder Sidhu in mid-November for a ministerial dialogue.

No formal trade talks between Canada and India had been announced following the two visits.

The two countries are now moving to that stage, according to Prime Minister’s Office (PMO). Carney met with Modi on Nov. 23 and the two have agreed to launch negotiations to reach a Comprehensive Economic Partnership Agreement (CEPA) which will cover goods, services, agriculture and agri-food, investment, digital trade, mobility, and sustainable development.

The two leaders said the deal could help double bilateral trade to $70 billion by 2030.

“India and Canada have great potential in strengthening trade and investment linkages,” Modi said on X after the meeting,” adding that Canadian pension funds are showing a “keen interest in Indian companies.”

The Trudeau government had terminated trade talks with India in summer 2023 before making the accusation in the Nijjar case.

Carney said Canada’s commercial relationship has remained “quite strong” with India, notably regarding investments in the country, and the CEPA aims to “put that on a sound footing” by giving protections to Canadian and Indian businesses.

The prime minister said he considers India a reliable trading partner and that frictions are part of the course even with other partners deemed reliable such as the European Union.

Officials from Global Affairs Canada are currently updating the federal government’s Indo-Pacific Strategy of 2022 to reflect Carney’s approach. The new policy will be focused on boosting trade in the region in line with Carney’s goal of doubling non-U.S. exports over the next decade.