Why both India & Canada stand to lose from this dispute
India's image as a democratic country committed to rules-based order could take a hit, according to an expert.
A diplomatic row erupted between India and Canada earlier this week following Canadian Prime Minister Justin Trudeau's allegations of «potential» involvement of Indian agents in the killing of Khalistani extremist Hardeep Singh Nijjar, a Canadian citizen, in British Columbia on June 18.
India has rejected the allegations as «absurd» and «motivated» and expelled a senior Canadian diplomat in a tit-for-tat move to Ottawa's expulsion of an Indian official over the case.
In a blog posted by the Wilson Institute on Friday, Canada Institute Associate Xavier Delgado said, «Trade will likely be the first major casualty of the fallout, with negotiations for the EPTA (Early Progress Trade Agreement) being put on hold.»
«Both countries declared that they would pause trade talks with each other earlier this month and Canadian Trade Minister Mary Ng has indefinitely postponed a trade mission to New Delhi that had been planned for October,» he wrote.
The negotiations were a notable part of Canada's Indo-Pacific Strategy, which listed the EPTA as a critical step towards a larger comprehensive economic partnership agreement (CEPA) that would bolster trade ties between the two countries, he said.
The stalled trade talks have put a $17 billion bilateral trade relationship under strain.
Canadian merchandise trade with India grew from approximately $3.87 billion in 2012 to $10.18 billion in 2022, with major increases in the export of Canadian energy products and import of Indian consumer goods, according to Delgado.
«A reduction in the flow of Indian immigrants, which constitute almost one in five of all recent immigrants to
