India Canada Relations

India and Canada have long-standing bilateral relations based on shared democratic, pluralistic, and interpersonal values. India Canada relations are strengthened by an expanding network of bilateral agreements, official dialogues and memoranda of understanding.

However, India Canada relations have become sour recently due to allegations by the Canadian Prime Minister accusing involvement of India in the murder of Khalistani separatist Hardeep Singh Nijjar. As a result, bilateral tensions have risen, putting their traditionally cooperative relationship under strain.

Background of India Canada Relations

India and Canada have a long-standing bilateral relationship based on shared democratic values, two societies that are multi-ethnic, multicultural, and multireligious, and with strong people-to-people contacts. In recent years, both countries have worked to strengthen bilateral cooperation in a number of mutually beneficial areas.

• During the freedom struggle, many Indian migrants settled in Canada.
  • “Swadesh Sevak Home” in Vancouver was instrumental in mobilising the Indians against British rule.
• In 1947, India and Canada established diplomatic relations after the independence. Both India and Canada share similarity in federal structure, as many of the constitution features such as federation with a strong Centre and vesting of residuary powers in the Centre were inspired by the Canadian constitution.
• In the early years of their relationship, India and Canada focused on cooperation in areas such as development assistance and education. During the Cold War period, India was the largest recipient of Canadian foreign aid.
• However, India-Canada relations were at a crossroads when India conducted nuclear tests. It became low again when Sikh terrorists blew up Air India Flight 182 in 1985.
• In the 1990s, with the economic liberalization of India, the relationship began to expand into new areas, such as trade and investment.
• Strategic partnership: A significant moment in this relationship occurred in April 2015, when the Indian Prime Minister visited Canada, elevating bilateral ties to a strategic partnership.
• In recent years both countries have been cooperating with each other in various dimensions.

Pillars of India Canada Relations

India and Canada have a comprehensive strategic partnership that encompasses a wide range of areas from political to cultural.

Political Relations

• On the Ministerial level, India and Canada have a strategic partnership that is supported by Ministerial Dialogues on foreign policy, trade and investment, finance, and energy.
• Several agreements have been signed between India and Canada, including the Air Services Agreement, Extradition Treaty, Nuclear Cooperation Agreement, and Social Security Agreement etc.

Commercial Relations

• Bilateral trade: India was Canada's tenth-largest trading partner in 2022, making it a priority market for the country.
  • The trade balance favours India, bilateral trade between India and Canada is approximately $12 billion in 2023, but this does not reflect the true potential as only 1.95% of Canada's global trade is with India.
  • India exports pharmaceuticals, gems and jewellery, textiles, and machinery to Canada, while Canada exports pulses, timber, pulp and paper, and mining products to India.
• FDI: According to Invest India, Canada is the 18th largest foreign investor in India, having invested approximately $3,306 million between April 2000 and March 2023.
• Agreement: Both parties are in technical negotiations for a Comprehensive Economic Partnership Agreement (CEPA), which will cover trade in goods, services, investment, trade facilitation, and other areas.

Cultural Relations

• Diaspora: India and Canada have a number of educational and cultural exchange programs. There are over 1.3 million Canadians of Indian origin. This is a significant aspect for soft power diplomacy of India.
  • Canada has a sizable Indian diaspora, with Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs) accounting for more than 4% of the nation’s population.
    • Recognising this, the Canadian government in 2019, designated April as Sikh Heritage Month.
  • From 2013 to 2022, the number of Indians granted permanent residency increased by 260%, indicating a stronger bond between the two countries.
  • A sizable number of Indian immigrants have come to Canada as professionals, semi-professionals, skilled labourers, and entrepreneurs. Indian entrepreneurs have shown a growing interest in Canada's Startup Visa (SUV) programme over the years.
  • Canadian parliament has more than 15 indian-origin MPs, heading ministry portfolios in current cabinet.
    • New Democratic Party, which is one of the largest party in Canada is headed by an Indian-origin person.
• Education: India has also been the top source country for international students in Canada since 2018.
  • The Shastri Indo-Canadian Institute (SICI) was founded in 1968 to promote academic relations in the field of education.
  • The Department of Earth Science and Polar Canada has launched a knowledge exchange and scientific research programme on Cold Climate (Arctic) Studies.
• Tourism: Canada is India's fourth largest source of tourists. During 2021, Canada accounted for 5.3% (80,437) of all Foreign Tourist Arrivals (FTAs) in India.

Technological Cooperation

• Research and development: The primary goal of Indo-Canadian science and technology cooperation has been to promote industrial R&D that has the potential for application through the development of new intellectual property, processes, prototypes, or products.
  • IC-IMPACTS is a Canada-India Research Centre of Excellence dedicated to the development of research collaborations between Canada and India.
• Space: ISRO and CSA (Canadian Space Agency) have signed Memorandums of Understanding (MOUs) for cooperation in the field of space exploration and utilisation, as well as two Implementation Arrangements addressing satellite tracking and space astronomy.
  • ISRO's commercial arm, ANTRIX, has launched nine nanosatellites in collaboration with the University of Toronto's Institute of Aerospace Studies (UTIAS).
• Nuclear energy: The Nuclear Cooperation Agreement (NCA) was signed with Canada in June 2010,which resulted in the formation of a Joint Committee on Civil Nuclear Cooperation.
  • In 2015, India's Atomic Energy Regulatory Board (AERB) signed an agreement with the Canadian Nuclear Safety Commission (CNSC) to exchange experiences in nuclear safety and regulatory issues.

Challenges to India-Canada Relations

While there have been efforts to strengthen India-Canada Relations, several challenges have also emerged. Some of the key challenges to India-Canada relations include:

• Trade barriers: Trade has been a contentious issue between India and Canada. Both countries have faced trade barriers and restrictions, such as tariffs and non-tariff barriers, which have hindered the growth of bilateral trade.
  • Recently, trade negotiations on the Free Trade Agreement between India and Canada have been paused again.
  • Canada has expressed concerns about India's restrictions on agricultural imports, particularly in areas like pulse crops (e.g., lentils and chickpeas).
• Human rights issues: Canada has been vocal about human rights concerns in India, particularly related to the treatment of religious minorities, such as Sikhs and Muslims. 
  • On the other hand, India has expressed concerns over attacks on Hindu minorities and religious places. These issues have led to diplomatic tensions and differences in their respective approaches to human rights.
• Visa and immigration issues: Changes in visa and immigration policies in Canada, have led to concerns in India. Recently, India has suspended visas for Canadians, further escalating the tensions.
• Geopolitical issues: On issues such as Afghanistan, Iran, China, Pakistan, and terrorism, India and Canada have opposing viewpoints and interests.
  • Disagreements over issues such as the political situation in Kashmir and the Khalistan movement in Canada have strained diplomatic relations. 
  • During the G20 meeting in New Delhi, India and Canada did not engage in bilateral discussions.
• Perceived lack of focus on India: The current Canadian government appeared to prioritise other regions, such as Asia and the Pacific, over its relationship with India. This may have been a concern for India, especially considering the emerging geopolitical importance of the Indo-Pacific region.

Khalistan Issue

The Khalistani separatist movement has been a source of tension between India and Canada for many years. The movement advocates for the creation of an independent Sikh state, known as Khalistan, separate from India.

• The Growing influence of Khalistani advocacy in Canada: In recent years, the Khalistani issue has become more prominent in Canada due to the presence of a vocal Sikh diaspora in Canada, advocating for the Khalistan cause. This is due in part to the rise of social media and the spread of Khalistani propaganda online. India has expressed concerns about the influence of Canada-based Khalistan sympathisers and has criticised Canada for not taking stronger action against them.
• September 2023 escalation: The tensions between India and Canada flared up again over the Khalistani issue. Canadian Prime Minister accused India of being involved in a Sikh seperatist's assassination, a claim that India vehemently denied.
  • G20 Summit: India and Canada met only on the sidelines of G20 Summit 2023 held in India. During the G20 summit, India held bilateral meetings with many world leaders but not with Canada.
  • Pause in Trade negotiations: India-Canada Free Trade Agreement talks have been again postponed due to the concerns about pro-Khalistan activities. 
  • Ambasaddor removal: Both India and Canada expelled the senior diplomats. Moreover in recent, India has ordered Canada to reduce its diplomats in the country.
  • Visa issue: As a result of absurd accusations and ongoing diplomatic tensions, India has suspended the processing of visas for Canadians wishing to visit India, both within India and in third-party countries.
  • Role of Five Eyes and US: The ‘Five Eyes’ is a intelligence-sharing network of Australia, Canada, New Zealand, the United Kingdom and the United States. In a recent interview, the US Ambassador to Canada stated that "shared intelligence among Five Eyes partners" helped to lead Canada to the assertions made by the Canadian Prime Minister.
• India's perspective:The ongoing issue has further deteriorated the diplomatic relations between India and Canada. India has stated that such unsubstantiated allegations seek to divert attention away from Khalistani terrorists and extremists who have sought refuge in Canada and continue to pose a threat to India's sovereignty and territorial integrity.

Measures Needed to Strengthen India-Canada Relations

Despite the challenges, India and Canada remain important partners. Strengthening India-Canada relations in the current dynamic global landscape requires a multifaceted approach.

• Diplomatic engagement: Both India and Canada need to build trust and confidence at the political level in order to overcome the challenges that have strained their relations in recent years.
  • This can be done through regular high-level dialogue and engagement through Track II diplomacy, as well as through increased cooperation on issues of common interest.
• Addressing the Khalistan issue: To effectively address the Khalistan issue, India must adapt its diplomatic approach. Both India and Canada should engage in open and inclusive dialogue to address the issue of the Khalistani separatism.
• Deepen economic cooperation: Both countries should work to reduce trade barriers, tariffs, and non-tariff barriers. India and Canada need to resume trade talks to negotiate a Comprehensive Economic Partnership Agreement (CEPA) between the two countries, as well as increase trade and investment flows.
• Investment: Infrastructure and transport are also potential areas for collaboration and investment. The ambitious ' smart cities' initiative in India provides opportunities for Canadian businesses.
• Strategic cooperation: There is a need to strengthen cooperation in key strategic areas such as the cooperation for a framework against terrorism, countering China in the Indo-Pacific region, and emphasising freedom of navigation and rule-based order.
• Environmental collaboration: India and Canada can collaborate on renewable energy projects and technology transfer, given both countries' commitments to sustainability and combating climate change.
• Promote people-to-people ties: Both India and Canada should involve cultural exchanges, educational programs, and other initiatives that would help to strengthen the mutual understanding and respect between the two peoples.

As the world’s most populous country, with the fifth-largest economy and second-largest military, India is still an invaluable partner to the West. Strengthening India-Canada relations will require commitment and concerted efforts from both governments. By addressing shared challenges and pursuing mutually beneficial opportunities, both countries can enhance their partnership and contribute to regional and global stability and prosperity.