September 21, 2023

Canadian Prime Minister Justin Trudeau reiterated today, while speaking at a news conference at the United Nations General Assembly in New York, that he wants India to work with Canada to “ensure accountability and justice” in the killing of a Sikh.

"Canadian security agencies have been actively pursuing credible allegations of a potential link between agents of the Government of India and the killing of a Canadian citizen, Hardeep Singh Nijjar", in British Columbia, Canada, in June, Trudeau said earlier this week in a speech to the House of Commons.

“Allegations of Government of India's involvement in any act of violence in Canada are absurd and motivated,” India’s Ministry of External Affairs said in a statement. “Similar allegations were made by the Canadian Prime Minister to our Prime Minister (Narendra Modi), and were completely rejected.”

Nijjar, 45-year-old, migrated to Canada from India in 1997 and became a Canadian citizen in 2015. A plumbing contractor in Surrey, British Columbia, he was a leader of a movement demanding Khalistan, a separate nation for Sikhs in India. His extradition was reportedly sought by India for “sourcing finance to procure arms/ammunitions and training Sikh youth for carrying out terrorist activities in India,” The New York Times reported.

Analysts say that the escalating tension between Canada and India may be motivated by domestic political calculations of leaders in both countries. In Canada, Trudeau’s approval rating among likely voters has fallen to a low of 33%, down from 55% in May 2020. He faces a parliamentary election in 2025.  

There is discontent among Canadians over unaffordable housing and rising inflation. Also, Trudeau faces criticism over allegations that China interfered in the 2019 and 2021 parliamentary elections, in support of his Liberal Party. Analysts say that Trudeau is trying to deflect blame over the Chinese interference, as well as seeking to be transparent, by publicly alleging that India had a role in Nijjar’s killing.      

In India, Modi’s ruling Bharatiya Janata Party is likely to face a united opposition in next year’s parliamentary election. Results of recently held by-elections, especially in Uttar Pradesh, the most populated and hence a key electoral state, indicate that a united opposition will hurt Modi’s chances of being re-elected.

Many analysts “believe that Mr. Modi may be stoking Khalistan as a major threat as part of a tried-and-true political and electoral tactic in which he presents himself as the protector of India, particularly its Hindu majority,” according to The New York Times.

There is little support for Khalistan among India’s 26 million Sikhs, in the northern state of Punjab. However, rising violent attacks on Sikhs could expand support for the movement.

There is a risk that Khalistan supporters, based on their past actions, will resort to violence against Indian government targets in Canada, India and elsewhere to retaliate for the killing of Nijjar. This could lead to spiraling violence, including clashes between Hindu extremists, who support Modi, and Sikh extremists. There is fear that such clashes could also occur in Canada; there was a clash between the two groups in Mississauga, a suburb of Toronto last year.

To try to avoid further violence, the Indian and Canadian governments need to quickly agree to an independent investigation into the killing of Nijjar. The governments of the U.S., Australia, U.K., and New Zealand have asked for an investigation.

The investigation, perhaps by a judge of the International Court of Justice, should also be empowered to recommend criminal punishments for those found guilty. India and Canada should jointly implement procedures to tackle violence by Sikh and Hindu extremists, while respecting each other’s national sovereignty.

In addition to the risk of rising violence, the tension between Canada and India is harmful to their economies.

Canada faces an acute labor shortage, which will get worse in the coming years as its population ages rapidly. It is hence actively seeking migrants, especially from India. There are about 1.5 million people of Indian origin in Canada, with about half of them being Sikhs. In addition, there are roughly 320,000 Indians studying in Canada, up 47% from 2018.

In 2018, Trudeau visited India, for a week-long tour of major cities, primarily to pitch Canada to Indians considering pursuing advanced studies abroad, and as an attractive alternative to the U.S., given work visa restrictions in the U.S. imposed by then President Donald Trump’s administration.

In turn, India acutely needs foreign investments to boost its economic growth and reduce an explosive problem of unemployment and hidden unemployment, which is estimated to total 200 million people, roughly the population of Brazil.

Canadian pension funds are among the major investors in India. They own more than $27 billion in Indian stocks. This week, Indian stocks held by Canadian funds fell on news of the rising tensions between the two countries. “Concerns have been growing that the fresh tensions in the India-Canada relationship will see some outflow” of funds from the Indian stock market, if Canadian pension funds start selling Indian stocks, Livemint.com reported.

In addition, Canadian funds have invested $3 billion in projects, mainly in infrastructure, an area which attracts few major foreign investors in India.   

In fiscal year ended March 2023, India’s exports to and imports from Canada were around $4 billion each. This year, since the tension escalated, Canada abandoned talks for a deal to enhance trade between the two countries. 

Will the political leaders in India and Canada focus on pursuing mutually beneficial economic policies or ignore them in their pursuit to win re-elections?

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