Ties between India and Canada have taken a turn for the worse again after the diplomatic tensions last year over the killing of Khalistani separatist Hardeep Singh Nijjar.
In the latest round of diplomatic tit-for-tat, both nations have expelled six diplomats each, a move that could adversely affect various spheres—from trade and investments to people-to-people relations.
While sources have told NDTV Profit the Indian government is not concerned about the potential impact on bilateral trade and investment, let's take a look at what's at stake for the two nations.
Also Read: Government Unfazed About Trade, Investments Hit Amid India-Canada Diplomatic Tensions, Sources Say
Investments
Canada is the ninth-largest foreign portfolio investor in India as of September, according to data from the National Securities Depository Ltd. Investors from the North American country hold Rs 1.98 lakh crore in Indian equity and Rs 36,000 crore in debt.
Despite tensions, Canada's investments into India have grown 32% year-on-year to Rs 2.34 lakh crore in September 2024.
Canadian public funds are one of the largest investors in India's infrastructure sector, like telecom, real estate, roads and highways.
Around 600 Canadian companies are present in India and more than 1,000 are pursuing business opportunities in the country, according to the Ministry of External Affairs.
Bilateral Trade
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.
Some of India's major exports to Canada are pharmaceutical products, electronic goods, jewellery, gems, precious stones, shrimps, engineering goods and auto parts.
The biggest imports are minerals, pulses, potash, newsprint, iron and aluminium scrap, industrial chemicals, and gemstones.
Also Read: Allegations Of Killing Hardeep Singh Nijjar Are 'Political Agenda' Of Trudeau Government, Says India
People-To-People Relations
With a diaspora of nearly 18 lakh and 1 lakh non-resident Indians, Canada is home to one of the largest Indian diasporas abroad, accounting for more than 3% of its total population, according to the MEA data.
Education is among Canada's top export sectors, making up for nearly one-fourth of its service exports and 1.2% of the gross domestic product in 2022, according to ICEF Monitor.
According to estimates, international students spent Canadian $37.3 billion in 2022, contributing nearly Canadian $30.9 billion to the country's economy.
Canada's foreign student population soared to a record high in 2023, with India sending the most number of students at 4.27 lakh to the country. This is over four times the next nationality—China—which sent 1.01 lakh students.
According to the ICEF Monitor estimates, spending by international students supported 3.61 lakh jobs in Canada.
With a lot at stake, people, especially families of those staying in Canada, and businesses in both countries will hope for the situation to cool down soon.
RECOMMENDED FOR YOU
Azim Premji-Linked Fund Exits Medplus Health Services For Rs 482 Crore; Kotak MF, Invesco Among Buyers
Nov 18, 2024
India’s Trade Deficit Rises To $27.14 Billion In October, Exceeds Estimates
Nov 14, 2024
Foreign Investors See Worst India Asset Value Rout At $85 Billion In October
Nov 11, 2024
Government Unfazed About Trade, Investments Hit Amid India-Canada Diplomatic Tensions, Sources Say
Oct 15, 2024
POPULAR