The relationship between India and Canada has been strained in recent months. Leading to concerns about the impact on trade relations between the two countries. Recently, the India-Canada relationship has hit new lows. Both countries have expelled diplomats over accusations related to a Khalistani terrorist Hardeep Singh Nijjar. Experts believe commercial considerations rather than political issues drive economic ties between the two countries. Trade may not be impacted. The pause in talks on a proposed trade treaty with India by Canada in September 2023 has raised questions about the future of the trade relationship. Continue reading to know more about the conflict and its reasons.
Background Of India And Canada Trade Relations
Canada and India have longstanding bilateral relations built upon shared traditions of democracy, pluralism, and strong interpersonal connections. India is represented in Canada by a High Commission in Ottawa and by consulates in Toronto and Vancouver. Canada is home to one of the largest communities of Indian origin, with approximately 4% of Canadians being of Indian heritage (1.4 million people).
Trade relations between the two countries have been growing in recent years, with India being Canada’s 9th largest trading partner in 2022. Canada and India are working toward a Comprehensive Economic Partnership Agreement and a Foreign Investment Promotion and Protection Agreement (FIPA). And are committed to regularly holding Ministerial Dialogue on Trade and Investment to explore ways to deepen the commercial relationship.
However, the relationship between the two countries has become increasingly tense in recent months. In September 2023, Canada unexpectedly said it had paused talks on a proposed trade treaty with India, just three months after the two nations said they would begin negotiations. The move came after India criticized Canada for handling the ongoing farmer protests in the country, which have been ongoing since 2020.
The protests, which began in response to new agricultural laws passed by the Indian government, have been met with violence and repression by Indian authorities. Canada has been a vocal supporter of the protests. Prime Minister Justin Trudeau expressed concern about the situation and called for a peaceful resolution.
India has criticized Canada for interfering in its internal affairs and has accused the country of supporting separatist movements in the country. The tensions have led to concerns about the impact on trade relations between the two countries.
Impact On Trade Relations
While experts believe that economic ties between the two countries are driven by commercial considerations rather than political issues, moreover, the pause in talks on a proposed trade treaty with India by Canada in September 2023 has raised questions about the future of the trade relationship.
The pause in talks is a setback for both countries, as they had hoped to deepen their economic ties through a Comprehensive Economic Partnership Agreement and a Foreign Investment Promotion and Protection Agreement (FIPA). The pause in talks could delay the signing of these agreements. And could lead to a slowdown in trade between the two countries. PTI reported,
“On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.”
However, it is essential to note that trade relations between the two countries are not likely to be severely impacted by the tensions between the two countries. Economic ties between the two countries are driven by commercial considerations. Both countries have a mutual interest in expanding their commercial relationship and growing people-to-people connections.
What’s Next?
The relationship between India and Canada has become increasingly tense in recent months. Moreover, leading to concerns about the impact on trade relations between the two countries. The pause in talks on a proposed trade treaty with India by Canada in September 2023 has raised questions about the future of the trade relationship. Furthermore, experts believe that economic ties between the two countries are driven by commercial considerations rather than political issues. Both countries need to work towards resolving their differences and strengthening their economic ties for the benefit of both nations. Do you think the trade relations will face severe consequences? Do let us know your thoughts in the comment section below. Stay tuned for further updates.
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