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India-Canada Relations at an All-Time Low in 2023, Whose Gain, Whose Loss?

The deteriorating India-Canada relations are a cause for concern for both nations.




Discover the current state of India-Canada relations, as this article delves into the reasons behind their all-time low and the potential implications for both nations.

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The bilateral relations between India and Canada have been at the center of global attention in recent years due to a series of events that have strained diplomatic ties between the two nations. Historically, India and Canada have maintained cordial relations characterized by cultural exchanges, trade partnerships, and a shared commitment to democratic values. However, recent developments have caused a significant deterioration in these relations, raising questions about the consequences and implications for both countries.

The Strains in India-Canada Relations:

Khalistan Issue Between India-Canada:

One of the primary factors contributing to the decline in India-Canada relations is the Khalistan issue. Canada has long been seen as a hub for Khalistani separatist activities, and India has repeatedly expressed its concerns about the Canadian government’s perceived tolerance of such activities on its soil. This has led to a significant strain, with India accusing Canada of providing a platform for anti-India elements.

The Khalistan issue between India and Canada is a complex and sensitive topic that involves the history, politics, and identity of the Sikh community. The Khalistan movement is a separatist movement that seeks to create an independent Sikh homeland in the northern Indian state of Punjab, where most Sikhs live. The movement emerged in the 20th century, partly inspired by the Sikh Empire of the early 1800s and the partition of India in 1947, which left Sikhs as a minority in a Hindu-majority nation.

The movement gained momentum in the 1970s and 1980s when some Sikhs felt discriminated against and oppressed by the Indian government, especially after the controversial Operation Blue Star in 1984, which involved a military assault on the Golden Temple, the holiest shrine of Sikhism. The operation resulted in hundreds of civilian casualties and sparked a violent backlash from Sikh militants, who assassinated Prime Minister Indira Gandhi later that year. The assassination triggered anti-Sikh riots across India, killing thousands of Sikhs and displacing many more.

The Khalistan movement has supporters among the Sikh diaspora in Canada, which is home to about half a million Sikhs, making it the second-largest Sikh population outside India. Some Canadian Sikhs have been accused of providing financial and political support to Khalistani groups in India, some of which are designated as terrorist organizations by the Indian government. The Indian government has also alleged that some Canadian politicians have sympathized with the Khalistan cause and have attended events that glorify Sikh militants or advocate for Sikh independence. These allegations have strained the diplomatic relations between India and Canada over the years, especially during the tenure of Prime Minister Justin Trudeau, who has been criticized by India for being soft on Khalistan.

The latest escalation of tensions between the two countries occurred in September 2023, when Trudeau accused India of being involved in the killing of Hardeep Singh Nijjar, a prominent Sikh leader and activist in Canada. Nijjar was shot dead outside a Sikh temple in Surrey, British Columbia, on June 18, 2023. He was a vocal supporter of the Khalistan movement and had been accused by India of being the mastermind behind several terrorist attacks in Punjab.

Trudeau claimed that there were “credible allegations” linking Indian government agents to Nijjar’s death and expelled two Indian diplomats from Canada. India denied any involvement in the killing and rejected Trudeau’s allegations as “absurd” and “baseless”. India also retaliated by expelling two Canadian diplomats from New Delhi.

The Khalistan issue between India and Canada is not likely to be resolved soon, as it involves deep-rooted historical grievances, religious sentiments, and national interests. Both countries have reasons to try to move on from the current diplomatic spat, as they share common values of democracy, pluralism, and multiculturalism, as well as economic and strategic interests. However, both sides also face domestic pressures from their respective constituencies, especially the Sikh community in Canada and the Hindu nationalist base in India. It remains to be seen how both countries will manage to balance their bilateral relations with their internal politics.

Human Rights Concerns between India-Canada:

Another issue that has strained the relations between the two countries is the human rights situation in India, Canadian leaders have been vocal in expressing their concerns, especially with regard to religious minorities, civil society activists, journalists, and protesters. Canada has expressed concern over the rising tide of hate and violence in India and urged the Indian government to respect its international obligations and commitments on human rights. Canada has also supported various civil liberties organizations that have called for Trudeau to act decisively on India’s human rights infringements.

India, on the other hand, has accused Canada of interfering in its internal affairs and undermining its sovereignty. India has also criticized Canada for its double standards and selective approach to human rights issues, pointing out that Canada has its own problems with racism, discrimination, and indigenous rights.

Trade Imbalances between India-Canada:

Trade between India and Canada has been lopsided, with India exporting more goods to Canada than it imports. This trade imbalance has led to frustration on both sides, with Canada pushing for greater market access in India, while India seeks to address trade barriers imposed by Canada.

Trade imbalances between India and Canada are a result of various factors, such as the size and structure of their economies, the level of market access, the trade policies and regulations, and the geopolitical situation. According to the latest data from OEC, Canada had a negative trade balance of C$214M with India in May 2023, meaning it imported more than it exported.

Canada’s main exports to India were fossil fuels, fertilizers, and wood pulp, while India’s main exports to Canada were consumer goods, garments, and engineering products. The trade volume between the two countries reached nearly C$12B in 2022, a 57% increase from the previous year, but still far below the potential of the two large and diverse markets.

The Comprehensive Economic Partnership Agreement (CEPA) between Canada and India, which has been under negotiation since 2010, could boost trade by as much as C$6.5B and increase GDP by up to C$5.9B for Canada by 2035. However, the CEPA talks have been stalled due to various issues, such as tariffs, intellectual property rights, labor standards, and environmental protection.

The recent escalation of diplomatic tensions between Canada and India over the killing of a Sikh separatist leader in British Columbia has also cast a shadow over the trade relations. Prime Minister Justin Trudeau accused India of having a role in the assassination, which India denied and called “absurd and motivated”. Both countries expelled each other’s diplomats and suspended visa services, creating uncertainty and anxiety for travelers, students, and businesses.

Experts say that the diplomatic rift is unlikely to have a major impact on trade and investment ties, as economic relations are driven by commercial considerations and not political ones. However, they also warn that the lack of trust and dialogue could hamper the resolution of trade disputes and the advancement of trade negotiations in the future.

Foreign Policy Differences between India-Canada:

India and Canada are two countries with different histories, cultures, and interests. Their foreign policy differences reflect their divergent perspectives on various issues, such as Kashmir, nuclear cooperation, trade, and human rights.

One of the main sources of tension between India and Canada is the issue of Kashmir, a disputed territory claimed by both India and Pakistan. Canada has supported a plebiscite and a ceasefire in Kashmir since 1948, while India considers it an integral part of its territory and opposes any external interference. Canada has also expressed concern over the human rights situation in Kashmir, especially after India revoked its special status in 2019.

Another point of contention is the nuclear cooperation between the two countries. Canada supplied India with a nuclear research reactor in 1956, but severed ties after India conducted its first nuclear test in 1974 using Canadian material. Canada imposed sanctions on India and Pakistan after their nuclear tests in 1998, but lifted them in 2001. In 2015, Canada and India signed a nuclear deal that allowed Canada to export uranium and nuclear technology to India for civilian purposes.

Trade is another area where India and Canada have different interests and expectations. India is Canada’s 10th largest trade partner, with bilateral trade amounting to over $13.7 billion in 2022. However, trade talks have been stalled since 2017 due to disagreements over market access, intellectual property rights, and labor standards. Canada has also canceled a planned trade mission to India after tensions escalated over the assassination of a Sikh separatist leader in Canada in June 2023. India accused Canada of harboring Sikh extremists who advocate for an independent state of Khalistan in Punjab.

Consequences and Implications:

India’s Losses:

Diplomatic Isolation: India risks finding itself diplomatically isolated in certain international forums if it continues to face opposition from Canada and its allies on various issues. This isolation can hinder India’s pursuit of its foreign policy objectives.

Trade Disruptions: The strained relations could lead to disruptions in bilateral trade and investment, negatively impacting India’s economic interests in the Canadian market.

Security Concerns: Canada’s perceived leniency towards Khalistani elements raises security concerns for India, potentially compromising its national security.

Canada’s Losses:

Trade Opportunities: Canada stands to lose opportunities in the vast Indian market if tensions persist. India is a major market for Canadian exports, and a deterioration in relations could harm Canadian businesses.

Diplomatic Influence: Canada may lose influence in South Asia if it continues to alienate India, a key player in the region. India’s growing global stature makes it an important diplomatic partner.

Strategic Alignment: A strained relationship with India could limit Canada’s ability to collaborate with India on global issues such as climate change, counterterrorism, and peacekeeping operations.


The deteriorating India-Canada relations are a cause for concern for both nations. While both countries have valid concerns and interests to protect, it is essential to find common ground through diplomatic channels. Improved communication, mutual respect for sovereignty, and a willingness to address each other’s concerns can pave the way for a more constructive relationship. Ultimately, the continuation of strained relations will result in losses for both India and Canada in terms of diplomatic influence, economic opportunities, and security. A concerted effort to rebuild trust and cooperation is in the best interest of both nations and the global community at large.

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