These tensions have already had an adverse impact on their economic relationship, with Canada advocating for a pause in free trade agreement negotiations with India.
Ahead of the Indo-Canadian tension, India has not only expelled a senior Canadian diplomat based in India but also paused negotiations for a comprehensive free trade agreement. Worsening diplomatic relations between Canada and India have raised apprehensions regarding the visa possibilities for the hundreds of thousands of immigrants, students, and workers who annually intend to travel to the North American nation.
India has halted discussions on a comprehensive free trade agreement (FTA) with Canada, a country deemed of limited strategic significance to India's commodity needs. According to two unnamed officials, the bilateral merchandise trade between the two nations in FY23 amounted to a modest $8 billion, with exports and imports nearly in equilibrium.
The concern arises numerous of incidents have come out of anti-india elements being enetertained in Canada and its govt. Nevertheless, due to India's ability to readily find alternative, more amicable suppliers for its critical commodities, it need not exclusively depend on Canada. This approach aligns with India's national interests, as per the undisclosed officials told Hindustan Times.
In the first four months of the current financial year (FY24), India saw a year-on-year decline of more than 20% in its exports to Canada, with the total amounting to $1.24 billion. During the same period, imports also decreased by 6.39% to $1.32 billion, as per official data. India's exports to Canada include pharmaceuticals, iron products, telecom equipment, garments, marine products, auto components, iron, and steel.
On September 16, it was reported that New Delhi suspended its free-trade negotiations with Canada due to concerns that Ottawa was supporting subversive elements engaged in anti-India activities on Canadian soil. This development occurred shortly after Prime Minister Narendra Modi had expressed serious concerns to his Canadian counterpart, Justin Trudeau, about these anti-India elements promoting secessionism during Trudeau's visit to India earlier in the same month.
Before the pause in negotiations, India and Canada were making significant progress in their discussions regarding a free trade agreement (FTA). The ninth round of negotiations, conducted virtually from July 12 to July 21, covered various aspects, including goods, trade remedies, rules of origin, origin procedures, services, institutional arrangements, and core provisions.
Additionally, the sixth ministerial dialogue on trade and investment (MDTI) took place on May 8 in Canada as part of these negotiations. India was actively working towards an interim Indo-Canada Early Progress Trade Agreement (EPTA), with the ultimate goal of establishing a Comprehensive Economic Partnership Agreement (CEPA) or a comprehensive FTA. Since the relaunch of FTA negotiations between India and Canada in March 2022, they had already conducted nine rounds of negotiations by July of the same year.
Official data indicates that Canadian Pension Funds have collectively invested over $55 billion in India, viewing it as an increasingly favorable destination for their investments. Furthermore, more than 600 Canadian companies have established a presence in India, and over 1,000 companies are actively pursuing business opportunities in the Indian market.
Not just trade but impact on Indian students as well
In light of the recent deterioration in relations between India and Canada, there is a growing sense of fear and anxiety among individuals aspiring to study abroad, educational consultants specializing in Canada, and those applying for Canadian Permanent Residency (PR). The strained diplomatic ties between both governments are causing concerns, particularly given India's substantial student population and Punjabi diaspora in Canada, and the significant reliance of Canadian educational institutions on international students, with 40 percent of them originating from India. This escalating diplomatic tension has cast a shadow of uncertainty over the prospects of those who aspire to pursue their education and establish themselves in Canada.
“I cleared my IELTS (International English Language Testing System) just last month, and now I’m researching various universities in Canada, as my ultimate dream is to settle there after my studies. However, I’m afraid the Canadian embassy may deny me a student visa,” expressed Vikramjit Singh Arora, a student from Jalandhar, as reported by Indian Express.
Meanwhile, Ashnoor Kaur, another student, says that her consultant told her that ‘study abroad’ opportunities won’t be impacted, as neither Canada nor India would want to halt this process. “I spoke to my consultant, who is assisting me in gaining admission to a Canadian college, and he assured me that there’s no need to worry,” Kaur said.
Diplomatic strains heighten visa concerns
Deteriorating Canada-India diplomatic relations have raised concerns regarding visa prospects for a large number of immigrants, students, and workers who annually travel to Canada. Companies with affiliations to Canadian universities and offices are apprehensive that visa applications, especially from states like Punjab and Haryana, may face heightened scrutiny and a more challenging path to obtaining immigrant visas.
These concerns emerged following the recent expulsion of diplomats by both Canada and India. Canadian Prime Minister Justin Trudeau suggested that individuals connected to the Indian government might have had involvement in the murder of Khalistan Tiger Force leader Hardeep Singh Nijjar in June. Canadian intelligence agencies are actively investigating this matter, which has led to a diplomatic dispute between the two countries. These tensions have already had an adverse impact on their economic relationship, with Canada advocating for a pause in free trade agreement negotiations with India.
“Immigration visas may get restricted since the Canadian government over the last few years has stressed that they prefer students to come in, acclimatize into the ecosystem and then settle down. Some of the Indian states will see more scrutiny now," said Akshay Chaturvedi, founder and chief executive of Leverage Edu, as reported by Live Mint.