Government Unfazed About Trade, Investments Hit Amid India-Canada Diplomatic Tensions, Sources Say

The Indian government is not concerned about the potential impact on bilateral trade and investments amid rising tensions with Canada, according to sources from the Commerce Ministry. The investments from Canada, particularly from public pension funds, are expected to continue through indirect channels, the sources said.

India remains a healthy market to invest, and money will find its way through as most of these funds route money to India via Singapore, Mauritius or the Middle East, they added.

India's trade with Canada is also not significant enough to be a cause for concern, the people added.

India and Canada's bilateral trade stood at approximately $19.4 billion in 2023, according to government data. The trade deficit was in favour of the North American country at $3.25 billion, largely on account of higher service exports. In terms of goods trade, India exported $5.56 billion and imported $3.8 billion.

The move followed Canada’s recent decision to expel six Indian diplomats. The move was linked to allegations of a "targeted campaign" against Canadian citizens by individuals connected to the Indian government. Canada's move came in as a response after India expelled six members of the Canadian high commission in New Delhi.

Ties between India and Canada have been strained since Canadian Prime Minister Justin Trudeau alleged in September last year that Indian agents may have been involved in the killing of Hardeep Singh Nijjar, who was shot dead in Surrey, British Columbia, in June. The Indian government has firmly rejected these claims as "absurd."