After diplomatic spat over slain Khalistani separatist, India-Canada trade talks may be put in backburner

As relations between India and Canada turned southward following Ottawa’s allegation that New Delhi was behind the death of Hardeep Singh Nijjar, a Canadian citizen and chief of the banned Khalistan Tiger Force (KTF), negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between the two countries are unlikely to revive anytime soon. Talks on the trade pact had already been put on hold earlier this month.

“While a trade deal with Canada would have been beneficial for both countries, talks on this between New Delhi and Ottawa will possibly take a back seat given the current situation,” an analyst said. However, he added that it may not affect India in any big way at this juncture. “India has its hands full on this. It will now focus on the other ongoing negotiations,” he said.

India is in talks with several countries and blocs for bilateral and even regional trade deals. These include the Gulf Cooperation Council (GCC), European Union, Bangladesh and Israel. Last year India signed two major trade pacts, one with the UAE and the other with Australia. In the last five years, New Delhi has signed more than a dozen trade pacts.

Meanwhile, Canada’s economy contracted 0.2 per cent in the second quarter of this year. Many analysts have indicated that the country might be entering a recessionary phase. The country’s exports have been thinning with the rise in uncertainty in the global economy. Lower domestic consumption is also another factor that has led to the economic contraction. Even as Canada has trade pacts with 51 countries and regional blocs, its trade deficit has been rising.

“The loss (of the trade pact with India falling through for now) will be felt more in Canada than in India at this point with its economy facing a host of challenges,” the analyst pointed out.

Following the death of Nijjar, Canada asked an Indian diplomat to leave the country. Thereafter India today expelled a senior Canadian diplomat. The concerned diplomat has been asked to leave India within the next five days. The Ministry of External Affairs said that the decision reflects India’s growing concern at the interference of Canadian diplomats in our internal matters and their involvement in anti-India activities.

Also read: India-Canada ties touch new low after Khalistani separatists hold “referendum” in Surrey