India and Canada have declared diplomatic war. This came about after a year of frosty exchanges and declining relations when Canadian government sought to investigate and even interrogate the Indian High Commissioner and five other diplomats, naming them ‘persons of interest’ for the killing of Hardeep Singh Nijjar, a Khalistani activist. India has called the charges ‘preposterous’, accusing Canadian Prime Minister Justin Trudeau of orchestrating the investigations for political gain with a pro-separatist Khalistani vote-bank, given his record-low ratings ahead of the 2025 general election.
India also accused what it called the Canadian ‘regime’ for providing space to ‘violent extremists and terrorists to ... intimidate Indian diplomats and community leaders...’, in the name of free speech. New Delhi and Ottawa have each expelled six diplomats. With the reduced staff strength in the High Commissions in both capitals and an outraged India reserving the right to further action, it would mean drastic cuts in visas and curtailed direct travel links.
Further, with the muddled Trudeau government now deciding to slash its immigrant intake by about 20 per cent from the next year so as to right-size its population, this is expected to affect Indians in a big way. India had about 319,000 students studying in Canada in 2023. Indians constitute more than 41 per cent of Canada’s international student population.
Though India’s trade ties with Canada aren’t anything write home about, with Indian exports at $4.42 billion and Canadian exports at just $2.21 billion, recent efforts to put the ties on an even keel will further suffer. Talks on a Comprehensive Economic Partnership Agreement (CEPA) will go into the deep freeze. Moreover, India and Canada were moving towards signing the Canada-India Energy pact for Indian access to Canadian oil, natural gas, and, uranium. This may get delayed.
The developments have also raised some concerns about a spill-over effect on bilateral business engagements is the face-off lingers for long. This includes Canadian pension fund investments worth $75 billion in India and the inflow of remittances into India. CPP Investments, among the largest of Canadian pension funds, had reported a surge in its investments in India to Canadian $28 billion in 2023-24. From 2013 to 2023, about 57 per cent of Canadian investments in India focussed on real estate, financial services and industrial transportation. The Canada Pension Plan Investment Board (CPPIB), the largest Canadian investor in India, has been trimming its stakes in Indian stocks over the
past year.
Nijjar, who was wanted by India, was shot dead in June 2023 in British Columbia. In a press conference, the Canadian police (RCMP) detailed their suspicions that the Indian diplomats were somehow involved with an Indian criminal network they believe is responsible for the killing, as well in the targeting of some in the Indian diaspora. The Canadian Ministry of Foreign Affairs has alleged political interference by India’s diplomats – something hitherto it had accused China of.
Making a clean breast
Diplomats believe that, with the die cast for worsening ties, New Delhi must consider carefully the impact of its next steps not only on Indian diplomacy but also India’s image. While it is imperative to defend India’s diplomats, it is equally important to make a clean breast of the allegation (if indeed it can be done) that Indian intelligence agencies have overstepped in operations in the case. The RCMP’s naming of Indian underworld gangster Lawrence Bishnoi must also be investigated.
This is important, as India’s adversaries are already trying to draw links between allegations against Indian intelligence and national security operations in Pakistan, the UAE, Qatar, Canada and the US. Even India’s close partners are looking askance. The US’ statement, that India should co-operate with Canada, must be seen as evidence of that. India’s dual policy towards the Nijjar case, which it outrightly rejects any connection to, and the Gurpatwant Singh Pannun case in the US – it sent a high-level inquiry team – also raises questions.
A retired diplomat, who had served in Ottawa, said that New Delhi must also respond to reports that link Canada’s allegations to India’s top leadership including National Security Adviser Ajit Doval and Home Minister Amit Shah. Above all, New Delhi must step up an international campaign to ensure accountability from Canada: to either present verifiable evidence, or to stop casting this shadow over India’s reputation and its diplomats.