MONTREAL — Business leaders continue to grapple with fallout from the rift between the Canadian and Indian governments, saying the suspension of free trade talks helps no one.
Thesouringrelationship marks a major hurdle to boosting bilateral trade beyond last year’s $20.9 billion in goods and services and deters Indian students from studying in Canada, commercial groups say.
“Stopping any trade discussion or trade negotiation doesn’t make sense. How will that help us as a country?” asked Satish Thakkar, chairman of the Canada India Foundation. Canada halted trade treaty talks on Sept. 1.
“This is the biggest fall in Canada-India relations since the 1970s.”
They rapidly deteriorated after Prime Minister Justin Trudeau told Parliament on Sept. 18 that New Delhi may have been involved in the killing of Canadian citizen Hardeep Singh Nijjar, a Sikh independence activist who was shot dead in June outside the gurdwara he led in Surrey, B.C.
In response, the Indian government suspended visa services for Canadian citizens — partially restored last month — and revoked diplomatic immunity from Canadian diplomats, prompting two-thirds of them to leave the country.
The trade potential between Canada and India — the world’s most populous nation and fastest growing large economy — remain largely unrealized, observers say. India remains Canada’s eighth-largest trading partner, well behind the U.S. and China.
Negotiations on the would-be Comprehensive Economic Partnership Agreement launched in 2010 before foundering in 2017. They resumed in 2022, with the goal of reaching a deal this year.
The Asia Pacific Foundation of Canada says the treaty could increase two-way trade by up to $8.8 billion by 2035 and result in a Canadian GDP gain of up to $5.9 billion. Canada’s mineral, agriculture, chemicals and wood product sectors could all see sizable export boosts.
“There is a lot of complementarity between what Canada has and India needs,” said Victor Thomas, CEO of the Canada-India Business Council. “IT services, for example — a huge growth in very specific talent that, again, complements our economy that India can provide.
Of the 32,115 international tech workers who migrated to Canada between April 2022 and March 2023, nearly half — 15,097 — came from India, a July report from the Technology Councils of North America and Canada’s Tech Network found.
“This relationship is extremely important,” Thomas said. “But businesses like predictability and stability.”
The frayed relations mean “uncertainty prevails,” sowing doubt among some Indian
