Kananaskis/New Delhi, June 19 -- Prime Minister Narendra Modi and his Canadian counterpart Mark Carney have agreed on a range of "calibrated and constructive" steps to restore stability to bilateral ties, including the posting of envoys to each other's capitals, after a prolonged diplomatic spat over the killing of a Khalistani separatist. Prime Minister Narendra Modi and his Canadian counterpart Mark Carney also discussed opportunities for collaboration in clean energy, digital transformation, and artificial intelligence. (AP) Prime Minister Narendra Modi and his Canadian counterpart Mark Carney also discussed opportunities for collaboration in clean energy, digital transformation, and artificial intelligence. (AP) Modi described India's relations with Canada as "very important", while Carney pointed to the importance of bilateral ties based on "mutual respect and the rule of law", and said the two sides discussed opportunities to partner for economic growth. The Indian side had billed the meeting of the two leaders on the margins of the G7 Summit in Canada - the first contact between the top leadership of the two sides in more than 20 months - as an opportunity to reset relations sent into a tailspin after former Canadian prime minister Justin Trudeau alleged in September 2023 that Indian government agents were linked to the murder of Khalistani separatist Hardeep Singh Nijjar. India dismissed the accusation as absurd and accused the Trudeau government of giving space to extremist and radical elements that posed a threat to Indian diplomats and diplomatic facilities. The two sides paused talks on a trade deal, downgraded diplomatic ties and expelled dozens of each other's diplomats. India withdrew its high commissioner and five other diplomats from Canada last year after they were declared "persons of interest" in the probe into Nijjar's killing. "India-Canada relations are very important in many ways. Many Canadian companies have invested in India, Indian people have made very big investments on the soil of Canada," Modi said in remarks ahead of his first meeting with Carney, who was elected in April, early on Wednesday (Indian time). "India and Canada, which are dedicated to democratic values, must unitedly strengthen democracy and humanity by making optimum utilisation of our resources," he said. Carney said in a social media post the two leaders "reaffirmed the importance of Canada-India ties, based upon mutual respect and the rule of law, and discussed opportunities to partner for economic growth". Modi added in a social media post that the two leaders had an "excellent meeting" and were looking forward to working closely to "add momentum to the India-Canada friendship". Readouts issued by both sides indicated that the security-related issues that led to the downturn in relations were a key part of the discussions between the two leaders. While using nearly identical language, both readouts said Modi and Carney reaffirmed the importance of India-Canada ties based on shared democratic values, respect for rule of law and commitment to the principles of sovereignty and territorial integrity. "They underlined the need to pursue a constructive and balanced partnership grounded in mutual respect for concerns and sensitivities, strong people-to-people ties, and growing economic complementarities," the external affairs ministry said in its readout. "In this regard, both sides agreed to take calibrated and constructive steps to restore stability in the relationship, beginning with the early return of high commissioners to each other's capitals," it said. The Canadian readout said the designation of new envoys will be done to return to regular services for citizens and businesses in both countries. India's current envoy to Spain, Dinesh Patnaik, is widely tipped to be next high commissioner to Canada, people familiar with the matter said. As part of the process of resetting ties, the two leaders emphasised the importance of restarting senior ministerial and working-level engagements across various domains to "rebuild trust and bring momentum to the relationship", the Indian readout said. Modi and Carney also discussed opportunities for collaboration in clean energy, digital transformation, artificial intelligence, LNG, food security, critical minerals, higher education, mobility and supply chain resilience. Besides their shared interest in promoting a free and open Indo-Pacific, the leaders discussed the "importance of restarting the stalled negotiations on the Early Progress Trade Agreement with a view to paving the way for a Comprehensive Economic Partnership Agreement (CEPA)" and agreed to task their officials to engage on this matter....