India-Canada relations worsen; Can it impact trade relations?

The India-Canada relationship deteriorated on 19 September. The worsening India-Canada relations can impact trade between the two countries. What happened between India and Canada? What did Canadian Prime Minister Justin Trudeau and Indian Prime Minister Narendra Modi say about the worsening India-Canada relations?

Growing tensions between India and Canada

On 19 September, the two countries engaged in a row over the assassination of Hardeep Singh Nijjar. The India-Canada relationship hit new lows. It is important to note that such sensitive comments have the potential to impact trade relations. 

On 19 September, India expelled a Canadian diplomat hours after Canada expelled India’s top intelligence agent. Canada accused the Indian government agents of being involved in the murder of Khalistan Tiger Force chief Hardeep Singh Nijjar. Canadian Prime Minister Justin Trudeau called for an investigation into the matter.

Later on, India summoned the Canadian high commissioner to New Delhi. Cameron MacKay, Canadian high commissioner to New Delhi, was asked to leave India within five days.

Canadian Prime Minister Justin Trudeau accused the Indian government agents of having links to the assassination of Hardeep Singh Nijjar. 

Hardeep Singh Nijjar was killed in June outside a Sikh cultural center in Surrey, British Columbia, Canada. Canada blamed Indian government agents for his killing. India denied all the allegations. 

India said that “such unsubstantiated allegations can shift the focus from Khalistani terrorists and extremists.” 

Can worsening India-Canada relations impact trade?

It is important to note that the negotiations between India and Canada on the free trade agreement (FTA) have been put on hold because of the recent verbal spat and allegations.

A senior Indian government official said that the decision was taken due to political concerns. The official said that the negotiation would resume after solving the political issues.

The recent diplomatic tensions between India and Canada can impact trade. However, the two countries will not stop engaging in trade because economic ties are driven by commercial benefits. 

In recent months, Canadian farmers have benefited from India’s increasing demand for imported lentils. Indian software and pharmaceutical companies have also increased their market share in Canada. More than 600 Canadian companies have presence in India, which benefited the two countries. 

India and Canada would never want to harm their profits. The two countries aim to get economic benefits. The two countries have always kept politics and business away from each other.