What's at stake for India and Canada as ties between the two countries nosedive?

People-to-people connections, trade, and economic ties between India and Canada have suffered as tensions rise after Prime Minister Justin Trudeau said authorities were investigating “credible allegations” linking New Delhi’s agents to the murder of Sikh separatist leader Hardeep Singh Nijjar. New Delhi, on Tuesday, dismissed the allegations as “absurd”, and asked Canada instead to crack down on anti-India elements operating in its territory. Some experts believe that the recent events will have little impact on bilateral relations because the two countries do not compete in similar product categories. “The trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava told news agency PTI. **Also Read: Who was Hardeep Singh Nijjar, the Khalistani terrorist at centre of India-Canada standoff?** According to Sharad Kumar Saraf, chairman of Mumbai-based Technocraft Industries, “The bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” reports ABP. However, he stated that the current icy ties are cause for concern. India and Canada halted free trade agreement negotiations before of the G20 leaders’ summit. Furthermore, Canada’s trade minister Mary Ng postponed her October trade tour to India last week, ABP quoted a senior official as saying. Let’s look at what is at stake for both countries: How are trade talks affected? Canada said this month it had paused talks on the proposed treaty with India, just three months after both said they aimed to seal an initial pact this year. Industry estimates show the Comprehensive Economic Partnership Agreement (CEPA) between Canada and India could boost two-way trade by as much as $6.5 billion, yielding a GDP gain of $3.8 billion to $5.9 billion for Canada by 2035. What are the key items of trade? Steady growth has seen goods trade rising to $8 billion in 2022, with Indian exports to Canada touching $4 billion and imports from Canada also worth $4 billion. [caption id=“attachment_13145412” align=“alignnone” width=“640”] Canada is India’s 17th largest foreign investor, pouring in more than $3.6 billion (Rs 29,964,240 crore) since 2000. Reuters[/caption] India’s growing demand for imported lentils has benefited Canadian farmers, while Indian pharmaceutical and software companies have expanded their presence in the Canadian market. Major imports from Canada include energy products such as coal, coke and briquettes, besides fertilizers, while India exports consumer goods, garments, engineering products such as auto parts, aircraft equipment, and electronic items. What is the investment position? Canada is India’s 17th largest foreign investor, pouring in more than $3.6 billion (Rs 29,964,240 crore) since 2000, while Canadian portfolio investors have invested billions of dollars in Indian stock and debt markets. **Also Read: Diplomats expelled, trade talks on hold: How India-Canada ties have plunged to new lows** The Canadian pension fund, CPP, has increased its investment in Indian markets to about $15 billion (Rs 1.24 lakh crore), in areas such as real estate, renewables, and the financial sector by the end of last fiscal year in March 2023. How have corporates benefited? More than 600 Canadian companies, including Bombardier and SNC Lavalin, have a strong presence in India, while more than 30 Indian companies, such as infotech majors TCS, Infosys, Wipro have invested billions of dollars in Canada, creating thousands of jobs. [caption id=“attachment_13145052” align=“alignnone” width=“640”] Mourners carry the casket of Sikh community leader and temple president Hardeep Singh Nijjar during Antim Darshan, the first part of a day-long funeral service for him, in Surrey, British Columbia. AP[/caption] What is the role of Indian students in Canada? Since 2018, India has been the largest source country for international students in Canada. In 2022, their number rose 47 per cent to nearly 320,000, accounting for about 40 per cent of total overseas students, the Canadian Bureau of International Education says, which also helps universities and colleges provide a subsidised education to domestic students. What are the implications for Sikhs? Many analysts say the worsening ties could affect the economic interests of thousands of Sikh families in India’s Sikh-majority state of Punjab in the north, since they have relatives in Canada, who remit millions of dollars back home. The share of Canada’s Sikh population has more than doubled in 20 years, to 2.1 per cent, according to the country’s 2021 census, as large number of Sikhs have migrated from India in search of higher education and jobs. With inputs from Reuters