India's Prime Minister Narendra Modi will visit Canada in December, with the two sides making "good progress" on a new trade agreement, Prime Minister Mark Carney said Tuesday, as bilateral friction thaws further.

Relations between India and Canada effectively collapsed following the 2023 killing near Vancouver of Hardeep Singh Nijjar, a prominent Sikh activist who campaigned for a breakaway state called Khalistan.

Canada's then-prime minister, Justin Trudeau, publicly accused India of involvement in the assassination, a charge denied by New Delhi. Both sides expelled a string of diplomats in 2024.

Carney, who replaced Trudeau last year, has pushed for a reset, arguing that Canada needs access to the enormous Indian market as part of its effort to diversify its trade relationships and reduce dependence on the United States.

Speaking to reporters at the United Nations on Tuesday, Carney said: "We are making good progress in our trade negotiations with India. It is an exceptionally important relationship on many, many levels."

Carney said he and Modi had targeted the middle of December to finalize a new trade deal, adding "I very much look forward to hosting him."

Carney has faced pressure over what critics call his softer stance toward Modi's government, which Trudeau said bore direct responsibility for the murder of a Canadian citizen on Canadian soil.

Carney visited India in March, saying Canada wanted a "strategic partnership" with "the fastest-growing major economy and a powerhouse of global commerce and technology."