India-Canada Political Tensions: The Potential Effect on Trade and Relations
The ongoing diplomatic dispute between India and Canada, stemming from allegations of Indian involvement in the death of a Canadian citizen and Khalistani terrorist, Hardeep Singh Nijjar, has raised concerns about its potential ramifications. As reported by PTI, experts warn that this dispute could lead to negative consequences for both nations, impacting trade relations, India’s standing as a democratic nation, and even its regional influence.
The Dispute
The diplomatic discord between India and Canada escalated when Canadian Prime Minister Justin Trudeau accused India of potential involvement in Nijjar’s death, which occurred in British Columbia on June 18. India swiftly denied the claims as “absurd” and “motivated,” resulting in the removal of ambassadors. Xavier Delgado, an Associate at the Canada Institute of the Wilson Institute, highlighted the escalating tensions in a recent blog post.
Impact on Trade
One of the immediate casualties of this dispute is trade relations between the two nations. Both countries have put trade talks on hold, including negotiations for the Early Progress Trade Agreement (EPTA), which was a crucial element of Canada’s Indo-Pacific Strategy. The EPTA was seen as a stepping stone towards a more comprehensive economic partnership agreement (CEPA) that would strengthen trade ties between the two countries. This halt in negotiations has strained a bilateral trade partnership valued at $17 billion. Delgado also pointed out that from 2012 to 2022, Canada witnessed significant growth in merchandise trade with India, particularly in Canadian energy product exports and Indian consumer goods imports.
Impact on Immigration:
The dispute’s repercussions extend beyond trade, potentially affecting immigration patterns. A reduction in the flow of Indian immigrants, who makeup nearly one in five of all recent immigrants to Canada, could have significant consequences. Canada recently reached a population milestone of 40 million people, primarily due to a surge in inbound migration following the COVID-19 pandemic. Rapid population growth, driven by immigration, has become a hallmark of Canada’s demographic landscape.
Regional Influence:
Delgado highlighted that strained relations with India could hinder Canada’s ability to join Indo-Pacific institutions. Regional allies might be hesitant to upset the Modi government, and India itself could potentially block Canadian membership in certain regional groups. India’s influence and power in the region are acknowledged by Ottawa, making it a key player in Indo-Pacific dynamics.
Mutual Losses:
While Canada stands to lose in terms of trade relations and its image as a trustworthy ally, India is not immune to the potential fallout from this dispute. The allegations against India could damage its reputation as a democratic nation committed to a rules-based global order. Moreover, it may jeopardize India’s perception as a reliable partner in the international competition against China.
Potential Impact on Intelligence Sharing:
Canada’s participation in the Five Eyes intelligence alliance, comprised of the United States, the United Kingdom, Australia, Canada, and New Zealand, could be affected. If Canada provides definitive proof of India’s involvement in Nijjar’s murder, it may lead to a re-evaluation of intelligence sharing and law enforcement cooperation with India by its Five Eyes partners.
Prime Minister Trudeau’s Stance:
Prime Minister Justin Trudeau emphasized that Canada is not seeking to provoke or cause problems with India. Instead, he urged India to take the matter seriously and cooperate with Canada to uncover the truth. However, this diplomatic tension underscores the challenges faced by both nations in managing their bilateral relations effectively.
The ongoing diplomatic dispute between India and Canada, stemming from allegations surrounding the death of Hardeep Singh Nijjar, has raised concerns about its potential impact on trade, international relations, and regional influence. While both nations have much to lose, including strained trade relations and reputational damage, they also face challenges in balancing their diplomatic interests. As the dispute continues, the world watches with a keen eye on the potential outcomes and the future of India-Canada relations.