By Rakesh Joshi. Executive Editor, Business India

Canada’s decision to ‘pause’ the trade talks with India has come as a setback to bilateral ties. The two nations had earlier this year said they aimed to seal an initial trade agreement this year itself. Indian businesses were looking for duty-free access for products like textiles and leather, besides easy visa norms for movement of professionals. Canada has interests in areas like dairy and agricultural products. The bilateral trade between the countries has risen to $8.16 billion in 2022-23 from $7 billion in 2021-22.

The development follows New Dehi’s hard stance on rising incidents of secessionist activities and Khalistan-supporters attacking Indian diplomatic missions in Canada. Canada has the largest Sikh population in the world after India and relations have been strained over increasing Khalistani activities.

The trade mission was tied up with the Justin Trudeau administration’s Indo-Pacific strategy, and India was described as an ‘ideal destination’ for a Team Canada Trade Mission. “Canada and India have a mutual interest in expanding our commercial relationship and growing people-to-people connections,” Canada had said.

Negotiations for a trade deal started 13 years ago in 2010. After a lull of almost five years, the talks restarted in 2022, with renegotiations on a Comprehensive Economic Partnership Agreement. Over half a dozen rounds of talks have been held between the countries on the trade pact so far. In March 2022, the two countries re-launched negotiations for an interim agreement – Early Progress Trade Agreement (EPTA). In such agreements, two countries significantly reduce or eliminate duties on the maximum number of goods traded between them.

India had last year served a demarche to the Canadian government, asking it to stop the so-called Khalistan referendum organised by a proscribed organisation in Ontario, insisting that the Canadian government act against those who promote terror and violence against the largest democracy in the world. Banned organisation Sikhs for Justice, headed by designated terrorist Gurpatwant Singh Pannun, held the Khalistan referendum on 10 September, at a gurdwara in British Columbia. Trudeau and his Liberal Party came under pressure from a section of their Sikh constituency. Ahead of the G20 Summit in Delhi, Trudeau’s government had last month requested a ‘pause’ on trade talks with India, though no reason was given.

“Canada will always defend freedom of expression, freedom of conscience, and freedom of peaceful protest, and it is important to us... at the same time we are always there to prevent violence and to push back against hatred,” Trudeau said. This ‘double talk’ had riled New Delhi.

Trudeau had even pointed indirectly to India for ‘interfering’ in its internal matters. “Diaspora Canadians make up a huge proportion of our country,” he told the media. “And they should be able to express themselves and make their choices without interference from any of the many countries that we know are involved in interference challenges”.