TORONTO (Diya TV) — The increasingly strained diplomatic relationship between Canada and India, fueled by tensions regarding the Khalistan separatist movement, is threatening to overshadow growing trade ties between the two countries. Business leaders are worried that the tension threatens decades of work to build closer economic ties.
In September 2023, Canadian Prime Minister Justin Trudeau accused India of involvement in the June murder of Hardeep Singh Nijjar, a Canadian citizen and Sikh activist, near a British Columbia temple. India called the accusations “absurd and motivated,” and both nations expelled top diplomats and India suspended Canadian visa services.
Victor Thomas, president and CEO of the Canada-India Business Council, pointed out that Canada has been working to increase trade with India, the world’s most populous nation and fastest-growing large economy. But the current tensions have put these efforts on hold. “Business likes stability and predictability,” Thomas said. “This is anything but.
Talks on an Early Progress Trade Agreement (EPTA), which is viewed as a stepping stone to a full trade agreement, have been suspended. Canada’s trade minister delayed a scheduled October trip to India, and India suspended trade negotiations owing to “certain political developments.”
Despite strained diplomatic relations, trade in key commodities such as Canadian lentils and potash continues as usual. Indian customers expect no break in these supplies, which are crucial to India’s agricultural industry. However, the bigger picture of economic relations is uncertain. Jonathon Azzopardi, Laval Tool & Mould Ltd.’s CEO, said meetings with Indian officials scheduled were canceled during the tensions.
“Canada needs India more than India needs Canada,” Azzopardi said, highlighting the precarious trade balancing act. As both countries make their way through this tough terrain, Canada-India trade is in the balance, with companies on both sides optimistic for a quick solution to revive and grow economic ties.
