The downward spiral in India-Canada ties

“Vasudhaiva Kutum-bakam” was the reverberating echo of the G20 meet of 2023 that emerged as one of the most active sessions of the gathering of the top 20, now 21 economies of the world.
The downward spiral in India-Canada ties

Himakshi Thakuriya


Maitreyee Dutta


“Vasudhaiva Kutum-bakam” was the reverberating echo of the G20 meet of 2023 that emerged as one of the most active sessions of the gathering of the top 20, now 21 economies of the world. However, barely a week after the conclusion of the G20, there has been a rapid meltdown in the diplomatic relations between two countries that share common democratic values. Canadian Prime Minister Justin Trudeau recently informed the lawmakers in Ottawa about credible intelligence alleging a link between the Indian Government’s involvement in the death of a Canadian citizen, Mr. Hardeep Singh Nijjar, who has already been designated as a terrorist by India for his anti-India activities in supporting pro-Khalistani initiatives. With India-Canada relations slipping into a downward spiral, it is the consequences and repercussions of souring tensions that bring an alarming aspect into focus. As far as the events made public, the trade talks between the two met a standstill as discussion on the EPTA (Early Progress Trade Agreement) was paused indefinitely, which was supposed to be a critical step towards the CEPA (Comprehensive Economic Partnership Agreement), which is an integral part of Canada’s Indo-Pacific Strategy. As per estimations, this could have bolstered a two-way trade of about $6.5 billion, propelling forward the GDP of both countries. For the diversification of its economy, India is an important partner in Canada’s Indo-Pacific strategy, especially due to India’s emergence as a critical economy in the region to act as a balance against aggressive attempts to emphasize anti-West sentiments and monopolise trade in the Indo-Pacific region.

Instead, this trade agreement is now slotted into cold storage indefinitely, and the surge in diplomatic tensions has resulted in the expulsion of diplomats from both sides. India has, for now, suspended VISA services for Canadians, citing “operational reasons”. This comes at a time when Canada, as of 2021, is the 4th largest source of tourists in India and is home to 5.26% of overseas Indians, as per MEA. India has also strictly called for a reduction in the number of staff in the Canadian High Commission in India to maintain parity between diplomat numbers in both countries. In light of the statements by Prime Minister Justin Trudeau, Canada has also updated its travel advisory, advising Canadians to exercise caution while visiting the Union Territory of Jammu and Kashmir, Indian states bordering Pakistan, and finally the North East Indian states of Assam and Manipur, which is sure to adversely affect tourism in these areas.

Apart from this, the chilling of ties also brings various other concerns. In the world of globalisation, the concept of isolation is a myth. India and Canada, too, despite the present situation, have shared a long diplomatic relationship since it was first established in 1947. Both India and Canada have longstanding bilateral relations built upon shared traditions of democracy, pluralism, and strong interpersonal connections. As far as economic ties are concerned, more than 600 Canadian companies have a growing presence in India, and more than 30 Indian companies are rapidly growing in Canada. One of the top 20 largest foreign investors in India, Canada too has a large stake in the booming Indian economy. As of March 2023, CPP Investments (the company that invests in the assets of the Canadian Pension Plan) had net assets worth Rs 1.3 lakh crore in the fiscal year in India. Canada also accounts for about 0.56% of total FDI in India. While bilateral trade has immense potential for growth, the present trade balance is in India’s favour as exports to Canada are higher than imports. India is a net exporter to Canada because of the huge Indian diaspora. Beyond this, MoUs have already been signed by ISRO and CSA regarding exploration and utilisation of outer space. In ISRO’s 100th launch through PSLV, Canada’s first LEO (Low Earth Orbit) satellite was also carried into orbit.

Another integral relationship between India and Canada is the exports and imports of the country. India imports mainly fertilisers and energy products like coal, coke, and briquettes from Canada. Furthermore, the growing demand in India for lentils greatly benefited Canadian farmers and gave a boost to their exports. As far as Indian exports are concerned, Canada majorly imports garments, consumer goods, engineering products, electronic items, and pharmaceutical products from India. The intensifying chaos may end up being the fulcrum of an economic destabilisation that would detrimentally affect both countries in the long run.

Apart from the economic angle, the human angle also needs to be paid attention to. Since 2018, Indians have been the largest source of international students in Canada. In 2022, there had been a 47% rise in Indians preferring Canada as the destination for higher education. As per the Economic Times, a total of 2,26,450 Indian students opted to study in Canada in 2022. It is the question of the future of the youth of the country that is a matter of concern, with the backdrop of worsening tensions skyrocketing as anti-India Khalistani elements aggravate the tenuous balance by advocating public threats to the Indian Hindu community in Canada, recently highlighted by the release of a hate speech video by pro-Khalistan organisation Sikhs for Justice. Hence, there is a concerning situation of security and prospective economic repercussions in sight despite the presence of a large Indian diaspora in Canada and a deep people-to-people connection as well as cultural empathy.

In the scenario of geopolitics, Canada is a strategic partner of the western powers and is a part of many important groupings like the G7, which includes the US, UK, France, Germany, Italy, and Japan, as well as the Five Eyes group, which includes Australia, the US, the UK, and New Zealand. Interestingly, all these countries share strategic partnerships with India too. India is a member of the QUAD, which includes the US, Japan, and Australia. India also shares other partnerships with these countries and others like France and Germany at bilateral levels, including economic and security-related matters since India, being a net security provider, focuses on multilateralism as well as free and fair trade in the Indo-Pacific.

It has become obvious that the degrading relations have begun affecting the various international groupings where the diplomatic reach of both countries has begun to call attention to the situation. Yet, in a highly volatile diplomatic situation like this, stakeholders engaging in open and inclusive dialogue can be the only possibility for a resolution. Matters of political extremism need to be addressed, keeping in mind the people who will be directly affected by the situation. Worsening situations like this may also escalate to non-deliberate or accidental violence. In such scenarios, diplomacy and dialogue can be possible approaches to tackling the situation. In a multicultural world, all nations have their part to play, and cooperation among nations is essential to having a stable world and reaching sustainable development as a whole. The solution thereby lies in the building of trust and support among countries at the governmental and also at the people-to-people level. Instead of deliberative mudslinging or haywire allegations, the need is to focus on solution-oriented diplomacy and engage actively in multilateral institutions to establish and regain balance in diplomatic relations.

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