Both countries expelled their top diplomats on Monday
The diplomatic fallout between India and Canada has raised serious concerns over the impact on trade and immigration between the two countries. On Monday, both countries expelled their top diplomats, marking a new low in their relations. This development followed accusations made by Canadian officials, alleging that Indian government agents were involved in criminal activities within Canada. This has caused a strain on their diplomatic relationship, which experts fear could affect both trade and immigration.
Bilateral trade between India and Canada is substantial, with billions of dollars in exchange every year. Canada is also home to nearly 1.7 million people of Indian origin. The sudden breakdown in relations has raised uncertainties about how future interactions between the two countries will unfold. Although there have been no immediate economic retaliations, experts warn that trade ties could cool if the relationship remains strained.
Arif Lalani, a former Canadian diplomat, believes that businesses and citizens from both countries will face significant challenges due to the current uncertainty. Lalani, who now works as a senior advisor at StrategyCorp, a government consulting firm, told the BBC that people may hesitate to expand or invest further in trade with either country.
For over a decade, India and Canada have been negotiating a bilateral trade agreement, but these talks were paused in 2022, shortly before Canadian Prime Minister Justin Trudeau made public accusations against India. The fallout stems from Trudeau’s claim that there were “credible allegations” connecting Indian government agents to the murder of Hardeep Singh Nijjar, a Sikh separatist shot dead in Surrey, British Columbia, in June 2023. Although these allegations have not yet led to any economic sanctions, they have contributed to the growing diplomatic tension.
The trade relationship between the two nations remains strong, with bilateral trade valued at around $8 billion, according to recent data from India’s trade ministry. However, Lalani expressed concerns that businesspeople in both countries could start looking elsewhere for opportunities if tensions continue to rise.
The immigration front could also be affected. Canada has been a popular destination for Indian students, with India becoming the top source of international students for Canada since 2018. Additionally, Indian nationals represent about 4% of Canada’s population. Many are now worried that the strained relationship could impact their plans to study or work in Canada.
Karan Thukral, a Delhi-based immigration lawyer, highlighted the anxiety among his clients who are eager to move to Canada. Thukral noted that while immigration processing is still ongoing, he has advised his clients to prepare for potential delays due to the reduced number of diplomatic staff in both countries. He also mentioned that those with family ties in India are concerned about the possibility of India reinstating visa restrictions for Canadians, which could further strain ties and impact family connections.
Jeff Nankivell, president of the Asia Pacific Foundation of Canada, echoed these concerns. Nankivell pointed out that if India decides to restrict visa issuance for Canadian citizens again, it could have wider business implications. Such a move would not only affect tourism and trade but could also hinder investments between the two countries. According to Nankivell, the Indian government has already shown its willingness to suspend visas once, so it remains a possibility that they could take similar action in the future.
The tension between the two countries seems likely to continue, especially as Canadian law enforcement continues its investigation into the murder of Nijjar. Four Indian nationals have been arrested in connection with the murder, although it remains unclear how they are linked to the Indian government. The case has further complicated the diplomatic situation, and experts believe that the fallout could last for a long time as investigations unfold.
On Wednesday, Prime Minister Trudeau doubled down on his accusations against India, criticizing Delhi for its alleged interference in Canada’s sovereignty. However, Trudeau also emphasized that he does not wish to hurt the strong economic and social ties between the two countries. He pointed out that Canada and India are both democratic nations with deep people-to-people connections and a long history of trade relations. Despite this, the growing tension between the two countries is unavoidable.
In response, India expressed its displeasure with Trudeau’s behavior, accusing Canada of failing to provide evidence to back its claims. Earlier this week, India said it “reserves the right to take further steps” in retaliation, while Canada’s foreign minister Mélanie Joly stated that all options, including sanctions, are on the table.
As the diplomatic fallout continues to evolve, experts believe that both Canada and India will need to navigate carefully to avoid long-term damage to their trade and immigration ties. For now, businesses and citizens in both countries are left grappling with uncertainty, while leaders work to find a way forward.
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