INDIA-CANADA RELATIONS Study Materials

India-canada Relations

INDIA-CANADA RELATIONS

INTRODUCTION

• India and Canada have a longstanding diplomatic relationship based on shared democratic values, a multi- cultural, multi-ethnic, and multireligious nature, and strong people-to-people contacts.

• India established diplomatic relations with Canada in 1947. The two countries share similarities in their federal structure, with many features inspired by India’s constitution.

• Initially, they focused on education and development, with India being the largest recipient of Canadian foreign aid during the Cold War. However, relations deteriorated after India conducted nuclear tests and the 1985 bombing of Air India Flight 182.

• In the 1990s, India’s economic liberalization expanded the relationship into trade and investment.

• Prime Minister of India’s visit to Canada in April 2015 elevated the bilateral relation to a Strategic Partnership.

• PM Justin Trudeau visited Delhi for the G20 Leaders’ Summit on 9-10 September 2023. He had a pull-aside meeting on the sidelines of the Summit.

India-Canada relations have deteriorated due to accusations of India’s involvement in the murder of Khalistani separatist Hardeep Singh Nijjar, escalating bilateral tensions and straining their traditionally

cooperative relationship, according to the Canadian Prime Minister.

Political Relations

India and Canada pursue bilateral relations through annual Foreign Office Consultations, Strategic Dialogue, Joint Working Groups on Counter-terrorism, Science & Technology Committee, Environment Forum, Energy Forum, Steering Committee on Mining and Earth Sciences, and Joint Working Group.

On the Ministerial level, India and Canada have a strategic partnership that is supported by Ministerial Dialogues on foreign policies, trade and investments, finance, and energy.

India and Canada have signed several agreements, including the Air Services Agreement, Extradition Treaty, Mutual Legal Assistance Treaty, Agreement on Patents, Cooperation in Agriculture, Science and Technology and Environment Cooperation, Nuclear Cooperation Agreement, Social Security Agreement, MOU on Cooperation in Energy, Cooperation in Mining and Earth Sciences, Cooperation in Higher Education, Cultural Cooperation, MOU on Cooperation in Intelligent Transport Systems, and MOU on Cooperation in ICTE.

Commercial relations

• In 2025, two-way merchandise trade between Canada and India reached $10.9 billion, comprising $3.9 billion in Canadian exports and $7.0 billion in imports from India. Canadian exports declined by 26.5% compared to 2024. Canada’s services exports to India reached $15.6 billion in 2024 (up 16.3% from 2023), driven primarily by education-related travel.

• Imports from India increased by 18.9%, driven by consumer goods, machinery, chemicals, and electronic equipment. Services imports from India totalled $3.8 billion (up 1.2% from 2023), with commercial services accounting for 86.8% of total imports.

• Over 600 Canadian companies have a presence in India, with over 1,000 actively pursuing business in the Indian market.

• Major exports include gems, jewellery, pharmaceutical products, and ready-made garments. India’s imports include pulses, newsprint, wood pulp, asbestos, potash, iron scrap, copper, minerals, and industrial chemicals.

• The India-Canada Comprehensive Economic Partnership Agreement (CEPA) negotiations were formally re- launched in March 2022 and the two countries had been keen on completing the negotiations by 2023-end.

• Nine rounds of talks had already taken place till July 2023, and negotiations on topics like goods, trade remedies and rules of origin were underway.

Investment

• India has been a key destination for Canadian investments from entities such as the Canadian Pension Plan Investment Board and asset management firm Brookfield in sectors ranging from infrastructure to start-ups.

• Canada’s direct equity investment in India has grown modestly, with cumulative Foreign Direct Investment (FDI) inflows totaling US$ 4.26 billion between April 2000 and September 2025

People-to-People Relations

• Canada is home to one of the world’s largest Indian Diasporas, with over 1.86 million people of Indian origin, making up 5% of the country’s 36.99 million population and 5.8% of the 32 million strong global Indian diaspora.

Recognising this, the Canadian government in the year 2019, announced April as Sikh Heritage Month.

• The Diaspora primarily resides in Toronto, Vancouver, Montreal, Calgary, Ottawa, and Winnipeg.

• The Canadian House of Commons has 19 Members of Parliament of Indian origin, and prominent Indo- Canadian organizations include the Canada India Business Council (CIBC), Canada India Foundation (CIF), and Indo-Canada Chamber of Commerce (ICCC).

• From 2013 to 2022, the number of Indians granted permanent residency increased by 260%, indicating a stronger bond between the two countries.

• A significant number of Indian immigrants have come to Canada as professionals, semi-professionals, skilled labourers, and entrepreneurs. Indian entrepreneurs have shown a growing interest in Canada’s Startup Visa (SUV) programme over the years.

Education

• India has been the top source country for international students in Canada since 2018.

• The Shastri Indo-Canadian Institute (SICI) was founded in 1968 to promote academic relations in the sphere of education.

• The Department of Earth Science and Polar Canada has launched a knowledge exchange and scientific research programme on Cold Climate (Arctic) Studies.

Tourism

• In 2025, Foreign Tourist Arrivals (FTAs) in India from Canada stood at approximately 542,000, which made Canada one of the top five source markets for inbound tourism to India

Security and Defence

• India and Canada are closely involved in international forums like the UN, Commonwealth, and G-20, and have been expanding their defense ties through mutual ship visits, with robust cooperation on counter terrorism issues.

Technological Cooperation

Research and development: Indo-Canadian science and technology cooperation aims to promote industrial research and development through the creation of new intellectual property, processes, prototypes, or products.

IC-IMPACTS, a Canada-India Research Centre of Excellence, is dedicated to fostering research collaborations between Canada and India.

Space: ISRO and CSA have signed Memorandums of Understanding for cooperation in space exploration and two Implementation Arrangements for satellite tracking and space astronomy.

ISRO’s commercial arm, ANTRIX, has launched nine nanosatellites in partnership with UTIAS at the University of Toronto.

Nuclear energy: In 2010, Canada signed the Nuclear Cooperation Agreement, establishing a Joint Committee on Civil Nuclear Cooperation.

In 2015, India’s Atomic Energy Regulatory Board (AERB) and the Canadian Nuclear Safety Commission signed an agreement to exchange experiences in nuclear safety and regulatory matters.

RECENT TENSIONS BETWEEN INDIA & CANADA

Tensions between Canada and India escalated after Canadian Prime Minister Justin Trudeau announced “credible allegations” of the Indian government being behind the killing of Canadian citizen Hardeep Singh Nijjar, the Khalistan Tiger Force (KTF) chief and a designated terrorist in India.

Canada cancelled a trade delegation visit to Delhi, put FTA talks on pause, and may affect $55 billion investment in India from Canadian Pension Funds. India’s response to the allegations has been a full-blown diplomatic war, with the Ministry of External Affairs stating that many people wanted for Khalistani separatist violence in India received “safe haven” in Canada despite multiple representations by India for their extradition.

India has also suspended visa services across Canada and will not accept Canadian applications at any other mission worldwide.

INDIAN MIGRANTS & IMMIGRANTS IN CANADA

India is a prime origin country for immigrants to Canada, with most holding the Overseas Citizenship of India (OCI), a life-time Indian visa or semi-dual-citizenship.

Canadians are home to over 1.86 million people of Indian origin, making up 5% of the country’s 36.99 million population and 5.8% of the 32 million strong global Indian diaspora.

In 2022, over 40% of 549,260 total study permits to international students were issued to Indians. These immigrants constitute a substantial share of India’s human capital abroad, reducing large-scale brain drain in the country.

Remittances to India are mainly from migrant workers in West Asia/the Gulf countries, with PRs and diaspora members in developed countries like Canada being the source of investments.

Visitors from India comprise Canada’s fourth-largest international air travel market.

CHALLENGES IN INDIA CANADA RELATIONS

Trade barriers: India and Canada have been grappling with trade issues, including trade barriers and restrictions like tariffs and non-tariff barriers, which have hindered bilateral trade growth. Recently, negotiations on the Free Trade Agreement between the two countries have been halted due to Canada’s concerns about India’s restrictions on agricultural imports, particularly in pulse crops.

Human Rights Concerns: Canada has raised human rights concerns in India, particularly regarding the treatment of religious minorities like Sikhs and Muslims, while India has raised concerns over attacks on Hindu minorities and religious places, resulting in diplomatic tensions and differences in their approaches to human rights.

Visa and immigration issues: India has suspended Canadian visas due to changes in visa and immigration policies, escalating tensions between the two nations.Political Disagreements: India and Canada have differing views on Afghanistan, Iran, China, Pakistan, and terrorism. Disagreements over Kashmir and the Khalistan movement in Canada have strained diplomatic relations. During the G20 meeting in New Delhi, India and Canada did not engage in bilateral discussions.

Perceived lack of focus on India: The Canadian government’s prioritization of Asia and the Pacific over its relationship with India may have been a concern for India, given the growing geopolitical significance of the Indo-Pacific region.

WAY FORWARD

Diplomatic engagement: India and Canada are crucial partners in the global arena, but strengthening their relations requires a multifaceted approach. To overcome political challenges, they need to build trust and confidence through regular high-level dialogue and increased cooperation on common interests.

Address Khalistan issue: Addressing the Khalistan issue requires adapting India’s diplomatic approach and engaging in open dialogue.

Improving Economic relations: Economic cooperation should be strengthened by minimizing trade barriers, tariffs, and non-tariff barriers, and negotiating a Comprehensive Economic Partnership Agreement. Infrastructure and transport can be areas for collaboration and investment, with the ‘Smart Cities’ initiative in India providing opportunities for Canadian businesses.

Strategic cooperation: Strategic cooperation is needed in key areas like terrorism, countering China in the Indo- Pacific region, and promoting freedom of navigation and rule-based order.

Environmental collaboration: Environmental collaboration can be achieved through renewable energy projects and technology transfer.

Improving People-to-People ties: People-to-People ties can be promoted through cultural exchanges and educational programs. This approach will help strengthen India-Canada relations and promote mutual understanding and respect between the two nations.

CONCLUSION

India, the world’s most populous country, is a crucial West partner. Strengthening India-Canada relations requires significant commitments and efforts from both governments. Addressing challenges and pursuing mutually beneficial opportunities can enhance partnership, contribute to regional and global stability and prosperity.