India Canada Diplomatic Relations, Background, Recent Challenges

Diplomatic relations between India and Canada, though geographically distant yet culturally diverse, have seen evolution. They encompass economic cooperation, educational exchanges, and cultural connections, with a history of cooperation and occasional tensions. Recent allegations by Canadian Prime Minister Justin Trudeau, accusing India of violating Canada’s sovereignty due to the alleged involvement of Indian government agents in the killing of a Canadian citizen linked to the Khalistan Tiger Force, Hardeep Singh Nijjar, have escalated bilateral tensions, challenging the traditionally cooperative nature of their relationship.

Background of India-Canada Relations

Diplomatic relations between India and Canada date back to 1947. A significant milestone in this relationship occurred in April 2015 when the Prime Minister of India visited Canada, elevating bilateral ties to a strategic partnership. In recent times, both nations have been actively collaborating to strengthen cooperation across various sectors of shared significance.

India-Canada Bilateral Ties

Bilateral Mechanisms

Both countries engage in bilateral relations through various dialogue mechanisms, including ministerial-level dialogues such as Strategic, Trade, and Energy dialogues, Foreign Office Consultations, and sector-specific joint working groups (JWG).

Commercial Relations

India and Canada have been working to enhance their trade and economic relations. An annualized Trade Ministers dialogue was established to review economic ties, and negotiations for a Comprehensive Economic Partnership Agreement (CEPA) were ongoing, covering trade in goods, services, investment, and trade facilitation.

Nuclear Cooperation

While India and Canada faced a setback in their relations after India’s nuclear test in 1974, they signed a Nuclear Cooperation Agreement (NCA) in June 2010, which came into force in September 2013. A Joint Committee on Civil Nuclear Cooperation was formed as part of this agreement.

Science and Technology

Indo-Canadian Science and Technology collaboration primarily focuses on advancing Industrial R&D with the potential to generate new IPs, processes, prototypes, and products. An Action Plan for 2017-18 was jointly crafted, emphasizing cooperation in emerging fields like Artificial Intelligence, Nano-technology, and 3D printing.

The Department of Biotechnology, through the IC-IMPACTS program, conducts joint research ventures in healthcare, agri-biotech, and waste management. Additionally, the Department of Earth Science and Polar Canada has initiated a knowledge exchange program for scientific research in Cold Climate (Arctic) Studies. This bilateral effort aims to harness innovation and knowledge for mutual benefit.

Space

India and Canada have cooperated in the field of space since the 1990s, with collaboration in space science, earth observation, satellite launch services, and ground support for space missions. Memorandums of Understanding (MOUs) were signed in 1996 and 2003 between ISRO and the Canadian Space Agency.

Security and Defence

India and Canada collaborate in various international forums, including the UN, Commonwealth, and G-20. Defence ties have expanded with mutual ship visits and cooperation on counterterrorism issues, particularly through the Joint Working Group on Counter-Terrorism.

Agriculture

A bilateral MoU on agriculture cooperation was signed in 2009, leading to the creation of sub-groups on knowledge exchange in emerging technologies, animal development, agricultural marketing, and a separate Joint Working Group for Pulses.

Education

Education is a significant area of mutual interest, with India becoming the top source of foreign students studying in Canada. The MoU on Higher Education was renewed in February 2018.

People-to-People Ties

Canada hosts a substantial Indian diaspora, including Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs), constituting over 4% of its population. The Indian diaspora has made notable contributions to various sectors in Canada, including politics.

Cultural Exchanges

Canada was the Country of Focus at the 48th International Film Festival of India in 2017, and there is an India-Canada coproduction agreement in films. Diwali has been celebrated on Parliament Hill for several years.

Cooperation in COVID-19 Pandemic

During the COVID-19 pandemic, India and Canada collaborated on repatriation flights for Canadian nationals in India and the supply of essential medicines, including paracetamol and hydroxychloroquine.

Challenges in India-Canada Ties

Khalistan Separatism

Sikhs form a substantial segment of the Indian diaspora in Canada, accounting for slightly over 500,000 individuals, or less than one per cent of the country’s total population. The presence of Sikh separatist groups in Canada has emerged as an increasingly contentious issue in India-Canada relations. While Sikh militancy has waned significantly in India, apprehensions persist regarding the resurgence of the Khalistan movement.

Notably, the Sikh diaspora in Canada holds a considerable influence, particularly in the federal politics of British Columbia and Ontario provinces.

Canadian Statements on Indian Developments

Canadian statements regarding developments in India, particularly on issues related to rights and freedoms, have the potential to create diplomatic challenges.

Structural Challenges in India

India continues to grapple with structural impediments, including intricate labour laws, market protectionism, and bureaucratic regulations that pose challenges to its economic growth.

Recent India-Canada Rift

Trade negotiations between India and Canada have hit a roadblock amid escalating tensions following Canadian Prime Minister Justin Trudeau’s announcement of an investigation into “credible allegations” linking Indian officials to the murder of Khalistani terrorist Hardeep Singh Nijjar.

Impact on Trade Discussions

Canada has recently suspended talks regarding a proposed treaty with India, just three months after both countries expressed their intent to finalize an initial agreement within the year. The Comprehensive Economic Partnership Agreement (CEPA) between Canada and India, if successful, could potentially boost bilateral trade by up to $6.5 billion. This growth could lead to a GDP increase of $3.8 billion to $5.9 billion for Canada by 2035.

Crucial Trade Items

Trade between the two nations has been on the rise, with the exchange of goods reaching $8 billion in 2022. India’s exports to Canada stand at $4 billion, while imports from Canada amount to $4 billion. Canadian farmers have benefited from India’s increasing demand for lentil imports, while Indian pharmaceutical and software companies have expanded their presence in Canada. Canada primarily imports energy products, including coal, coke, and briquettes, as well as fertilizers, while India exports consumer goods, garments, engineering products such as auto parts and aircraft equipment, and electronic items to Canada.

Investment Position

Canada ranks as India’s 17th largest foreign investor, injecting over $3.6 billion into the country since 2000. Canadian portfolio investors have also made substantial investments in Indian stock and debt markets. The Canadian Pension Plan (CPP) has significantly increased its investments in Indian markets, totalling about $15 billion, particularly in sectors like real estate, renewables, and the financial sector by the end of the last fiscal year in March 2023.

Corporate Engagement

More than 600 Canadian companies, including notable ones like Bombardier and SNC Lavalin, maintain a strong presence in India. Conversely, more than 30 Indian firms, including major IT companies like TCS, Infosys, and Wipro, have invested billions of dollars in Canada, generating thousands of jobs.

Indian Students in Canada

India has been the largest source country for international students in Canada since 2018. In 2022, their numbers surged by 47% to nearly 320,000, constituting approximately 40% of the total overseas student population. This influx benefits Canadian universities and colleges while providing subsidized education opportunities for domestic students.

Implications for Sikh community

The deteriorating relations could potentially impact the economic interests of thousands of Sikh families in Punjab, India’s Sikh-majority state in the north, as they have relatives in Canada who remit millions of dollars back home. The Sikh population in Canada has more than doubled in the past two decades, reaching 2.1% of the total population, according to the country’s 2021 census, largely due to migration from India in pursuit of higher education and job opportunities.

Way Forward for India-Canada Relations Amidst Challenges

Dialogue and Diplomacy

Both India and Canada should prioritize open and constructive diplomatic dialogue to address current tensions. Engaging in high-level talks can help in better understanding each other’s concerns and finding common ground on contentious issues.

Trade and Economic Cooperation

Both countries have much to gain from a strengthened economic partnership. Resuming trade negotiations and working towards the Comprehensive Economic Partnership Agreement (CEPA) can unlock significant economic benefits. Trade facilitation measures, sector-specific collaborations, and investment promotion efforts should be encouraged.

Counter Terrorism and Security Cooperation

Collaboration on counterterrorism efforts should be a shared priority. Intelligence sharing and cooperation in addressing potential threats from extremist groups should continue to be a focal point.

People-to-People Ties

The vibrant Indian diaspora in Canada and the growing number of Indian students studying in Canada present an opportunity for cultural exchange and strengthening ties. Cultural events, educational partnerships, and community engagement programs can enhance these connections.

Bilateral Agreements: Both countries should revisit and reaffirm existing bilateral agreements to ensure they reflect current priorities and challenges. This includes agreements related to science and technology cooperation, agriculture, and education.

Promoting Sikh Community Engagement

Acknowledging the concerns within the Sikh community, it’s essential to engage in constructive dialogue and create platforms for open discussions. Promoting intercultural understanding and addressing grievances can help alleviate tensions.

Respect for Sovereignty

Both countries should emphasize the importance of respecting each other’s sovereignty and not allowing domestic issues to overshadow the broader bilateral relationship.

Multilateral Engagement: Continue to collaborate in international forums such as the United Nations, G-20, and Commonwealth to address global challenges and contribute to global peace and development.

Civil Society and Track II Diplomacy

Encourage civil society organizations and Track II diplomacy initiatives to foster people-to-people connections, dialogue, and conflict resolution efforts.

Conflict Resolution Mechanisms: Establish clear mechanisms for addressing disputes and conflicts as they arise to prevent escalation and promote peaceful resolution.

Media and Public Diplomacy

Promote responsible reporting and public diplomacy efforts to ensure that media coverage and public discourse accurately reflect the complexities of the relationship and the efforts being made to strengthen it.

India-Canada Diplomatic Relations UPSC

India-Canada diplomatic relations, rooted in shared democratic values and strong people-to-people ties, encompass trade, defence, space, and education. Both nations are working towards a Comprehensive Economic Partnership Agreement (CEPA). Challenges include Sikh separatist groups in Canada, although Sikh militancy has waned in India. India’s structural challenges, like labour laws and market complexities, persist. Despite progress in economic relations, Canada remains a minor trading partner for India. Both countries should enhance their mutual understanding and explore India’s investment potential for a more prosperous relationship.

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