NEW DELHI, Feb 25, 2026 (BSS/AFP) - Canadian Prime Minister Mark Carney is due in India this week, seeking to boost trade and mend fractured ties on the first stop of his Asia-Pacific tour.

The two countries are aiming to reset their relations, which deteriorated following Canadian allegations that India was involved in the 2023 assassination of a Canadian Sikh leader -- claims New Delhi strongly denied.

Carney will begin his visit in Mumbai, India's financial hub, before travelling to New Delhi for talks with Prime Minister Narendra Modi.

Both countries face rapidly shifting global trade policies and uncertainty over US President Donald Trump's tariffs, adding urgency to efforts to diversify economic partnerships.

Carney's office said discussions will focus on "ambitious new partnerships in trade, energy, technology and artificial intelligence (AI), talent and culture, and defence".

Here is a closer look at what is expected to be on the agenda.

- Trade -

India, the world's fastest-growing major economy, is Canada's seventh-largest goods and services trading partner.

Annual two-way trade is more than $21 billion, according to Canadian government figures.

Last year, the countries agreed to resume negotiations on a proposed free-trade agreement aimed at taking bilateral trade to $50 billion by 2030.

"That means big new opportunities for Canadian workers and businesses," Carney said in November, after meeting Modi on the sidelines of a G20 summit in South Africa.

"India and Canada have great potential in strengthening trade and investment," Modi said at the time.

More than 600 Canadian companies are present in India, operating in sectors including information technology, banking, health sciences and financial services.

India's main exports to Canada include pharmaceuticals, gems, jewellery and precious stones, and seafood.

New Delhi, which is seeking to attract more overseas investments, says Canadian pension and wealth funds have already invested $73 billion in India.

The government has eased foreign investment rules, opening up sensitive sectors such as defence, energy and insurance.

- Energy and minerals -

Mining giant Canada holds large rare-earth metal reserves, and New Delhi is looking at ways to ease its dependence on China.

Ottawa also brings technical expertise in mining and resource development.

Energy-hungry India -- the world's most populous country, with 1.4 billion people -- hopes Canada can support its ambitious plan to expand nuclear power capacity from its current 8 to 100 gigawatts by 2047.

When Carney and Modi met in November, they reaffirmed civil nuclear cooperation, including potential long-term uranium supply agreements.

A multi-billion-dollar deal on extended uranium supplies is reportedly under discussion.

Ottawa is also keen to look for potential long-term alternatives to cut overdependence of its energy exports to the United States.

"India sees major collaboration potential with Canada in critical minerals, clean energy and emerging technologies," New Delhi's Commerce Minister Piyush Goyal said last year.

- Sikh separatists -

Canada has roughly 2.8 million people who are either Indian or of Indian origin.

Nearly 400,000 Indians attend universities in Canada, according to New Delhi, making up the largest group of international students in the country.

Canada is also home to the largest Sikh community outside India.

The community includes activists of a fringe separatist movement seeking an independent state for the religious minority carved out of Indian territory, which they call Khalistan.

Ottawa accused India of orchestrating the 2023 killing in Vancouver of Canadian citizen Hardeep Singh Nijjar, a prominent Khalistan campaigner, and targeting other Sikh activists connected to the movement.

India has repeatedly dismissed the allegations, which sent diplomatic relations into freefall, with both nations expelling a string of top diplomats in 2024.

Ties improved after Carney took office in March 2025, and envoys have since been restored.

The separatist campaign has been blamed for the assassination of an Indian prime minister and the bombing of a passenger jet.

It has been a bitter issue between India and several Western nations with large Sikh populations.