India and Canada began advancing negotiations on a long-pending trade agreement last year, as Carney moved to re-engage with New Delhi, restore diplomatic channels and stabilize ties between the two countries.

Carney said the two sides were aiming to conclude the deal by the end of the year.

“This is not merely the renewal of a relationship. It is the expansion of a valued partnership with new ambition, focus, and foresight,” Carney said.

Ties deteriorated after Canadian authorities alleged that India was involved in the killing of a Canadian Sikh activist near Vancouver in June 2023. New Delhi vehemently denied the allegations and accused former Canadian Prime Minister Justin Trudeau’s government of harboring Sikh extremists of the Khalistan movement. The movement, which aims to create an independent Sikh homeland, is banned in India.

The fallout saw both sides expel senior diplomats and suspend some visa services.

Relations improved last year in June when Carney invited Modi to the G7 summit in Alberta.

After the talks on Monday, Modi said India and Canada signed a nuclear agreement under which Canada will supply uranium to India. The two countries would also work to strengthen defense industries and enhance maritime domain awareness, he said.

Officials from both sides also exchanged a series of memoranda of understanding spanning areas including critical minerals, energy and cultural cooperation.

Carney is expected to leave for Australia and Japan later Monday, part of his effort to diversify trade away from the United States. He has set a goal for Canada to double its non-U.S. exports in the next decade, saying American tariffs are causing a chill in investment.

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