By Mohammed Amaan Khan
The realm of international relations is a complex web of affairs and intriguing interactions. In this dynamic environment, the article delves into the diplomatic relations between India and Canada, a relationship that has seen its fair share of ups and downs. Due to the Khalistan Movement controversy, this bond’s intricacies and multifaceted dimensions have recently come under the spotlight.
Turbulent past and ambiguous future
The roots of India-Canada trade relations can be traced back to India’s early years of independence and Canada’s emergence on the global stage. These two nations established diplomatic relations in 1947, founded on shared principles such as democracy, the rule of law, and pluralism. This relationship was further strengthened by personal connections between India’s Prime Minister Jawaharlal Nehru, and two Canadian Prime Ministers, Louis St. Laurent and Lester B. Pearson. This synergy occurred during India’s nation-building phase while Canada established itself as a significant international player.
However, the relationship experienced its first hiccup when Canada imposed nuclear sanctions on India during the 1970s, leaving a diplomatic scar that took years to heal. From 1998 to 2002, the relations remained relatively stagnant, earning the unfortunate label of being “stillborn.”
Despite these initial setbacks, the relationship gradually transformed. Canada became home to a substantial Indian immigrant population, serving as a natural bridge for trade and cultural exchange. Recent reports by Al Jazeera indicate that bilateral trade has surged beyond $6 billion annually, with Indian investments exceeding $4 billion in Canada. Canada now stands as India’s 18th largest foreign investor, with investments totalling approximately $3,306 million since the turn of the century.
The fiscal year 2022-23 brought a significant shift in India’s trade dynamics, with the trade balance tilting India’s favour. Canada is one of the few countries with which India enjoys a trade surplus, highlighting the robustness of their trade relationship. According to the Indian Express, India’s exports to Canada this fiscal year reached an impressive $4,109.74 million, surpassing its imports from Canada, totalling $4,051.29 million. This trade surplus amounted to a substantial $58.45 million, underscoring the depth of their economic ties.
India’s significance as a trading partner is further highlighted by its ninth spot on Canada’s list of largest trading partners in 2022. The bilateral trade between the two nations reached a substantial $8.16 billion in the fiscal year 2022-23, reflecting the depth of their economic engagement. Even during the initial months of the 2023 fiscal year, India’s exports to Canada remained resilient, amounting to $1.24 billion between April and July, despite imports exceeding $1.32 billion.
The trade relationship between these countries spans a spectrum of goods, with India primarily exporting pharmaceuticals, iron and steel products, and telecom instruments to Canada. In turn, Canada supplies India with coal, fertilisers, and pulses. One intriguing aspect of this trade relationship is India’s import of masoor dal (red lentils) from Canada, crucial in stabilising domestic supplies.
Canada hosts a significant Indian diaspora, with nearly 1.6 million Persons of Indian Origin and 700,000 non-resident Indians, enriching the cultural fabric and contributing to the economic and social bonds between the two nations.
Khalistani controversy
The controversy surrounding Khalistani leaders has again taken centre stage, ignited by Canadian Prime Minister Justin Trudeau’s remarks. He asserted the presence of “credible claims” linking agents of the Indian government to the assassination of Sikh separatist leader Hardeep Singh Nijjar, which occurred in Canada in June 2023. These allegations were swiftly labelled as “absurd” by the Indian Government, causing ripples in the diplomatic waters. These events have tested India’s concerns about these leaders finding refuge in Canada and strained the resilience of the bilateral relationship.
Canada faces the challenge of balancing its commitment to human rights and political asylum with safeguarding India’s security interests. The Khalistani leaders’ controversy, rooted in separatism and acts of terrorism, intensifies the heat in an already complicated relationship.
In a recent interview, Shashi Tharoor, a member of Lok Sabha, delved into the intricacies of the Indo-Canadian relationship. He emphasised the frustrations stemming from the belief that these are not mere speculations but involve individuals with a documented history of instigating destruction and chaos.
Tharoor pointed out a novel and somewhat troubling phenomenon: citizens who have migrated to Canada and obtained Canadian citizenship harbour intentions that may have adverse consequences for their countries of origin.
These developments raise fundamental questions: Why are Canadian citizens actively advocating for a separatist agenda while living in a distant corner of the world? And, even more perplexing, why does Canada allow them to harbour these intentions openly?
Future of Indo-Canadian trade
Canada has abruptly paused negotiations for a proposed trade treaty with India just three months after both nations agreed to finalise an initial agreement within the year. These trade deliberations focused on a comprehensive economic partnership agreement, have been unfolding intermittently since 2010, with a more formal relaunch of negotiations occurring just last year.
The catalyst for this sudden suspension was Indian Prime Minister Narendra Modi’s concerns over Sikh protests in Canada, voiced during a G20 summit in New Delhi. This decision sheds light on the volatile nature of modern trade diplomacy, as international negotiations can be subject to abrupt shifts in response to evolving circumstances.
One critical aspect of this development is the potential impact on India’s access to Canadian potash, an essential agricultural nutrient. Any disruption in this supply chain could affect India’s food security.
In another concerning turn of events, New Delhi has issued a safety advisory related to “anti-India” activities in Canada, raising concerns about the prospects for Indian students pursuing higher education there. A downturn in the enrollment of Indian students could affect Canada’s education sector.
These developments cast a shadow over the future trajectory of Indo-Canadian relations, potentially impacting the cross-border trade ties that were being nurtured. The interplay between geopolitics and economic partnerships on the global stage underscores the complexities of diplomacy and its potential impact on trade relations.
In conclusion, this relationship is navigating through a web of challenges, striving to unlock its full potential while wrestling with the complexities of diplomacy. The world will watch closely as both nations endeavour to find common ground in pursuing mutual economic benefits and diplomatic stability.
Mohammed Amaan Khan is a research intern at the Centre for Development Policy and Practice, Hyderabad. He has graduated with honours from Symbiosis School of Economics, earning a BSc in Economics.
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