India, Oct. 8 -- India is exploring the possibility of having Canada's Prime Minister Mark Carney as the chief guest at the Republic Day celebrations next year against the backdrop of hectic efforts by the two countries to finalise a trade deal by the year-end, people familiar with the matter said.

The choice of the chief guest for the event on January 26 is determined by a combination of strategic, diplomatic and economic factors, and also signals the strength of bilateral relations. India and Canada have focused on enhancing economic ties and efforts to bolster multilateralism since Carney became PM last year and took steps to repair relations that hit their lowest point under his predecessor Justin Trudeau.

PM Narendra Modi is expect...