NEW DELHI - India and Canada have agreed to restore stability in their relationship and reinstate high commissioners in each other's capitals, officials said Wednesday.

The two sides, in a significant move, have also agreed to resume stalled trade negotiations.

The development took place during a meeting between Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney on the sidelines of the Group of Seven Summit in Canada.

"The leaders 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. 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," a statement issued by India's foreign ministry Wednesday said.

"The leaders underscored the importance of restarting senior ministerial as well as working-level engagements across various domains to rebuild trust and bring momentum to the relationship," the statement said.

ALSO READ: G7 summit to focus on global economy, energy security

According to the ministry, the leaders also discussed the importance of restarting the stalled negotiations on the Early Progress Trade Agreement, to pave the way for a Comprehensive Economic Partnership Agreement.

This was the first in-person interaction between the two leaders since Carney assumed office following Canada's recent general elections.

New Delhi and Ottawa got engaged in a diplomatic row since September 2023 due to the murder of Hardeep Singh Nijjar, a Sikh separatist leader, near Vancouver in June that year.