India-Canada Trade Talk Paused: Why Relations Between The Two Have Soured

Days after being scolded by Prime Minister Narendra Modi on rising secessionist activities and Khailstan-supporters attacking Indian diplomatic missions on their land, Canada has said it is postponing a trade mission to India planned for October. The two nations had earlier this year said they aimed to seal an initial trade agreement this year itself. However, negotiations for a bilateral free trade agreement have now reportedly been stalled.

The trade mission was tied up with Canada's Indo-Pacific strategy, and India was described as an "ideal destination" for a Team Canada Trade Mission. "Canada and India have a mutual interest in expanding our commercial relationship and growing people-to-people connections," Canada had said.

Relations between India and Canada, which has the largest Sikh population in the world after India, have been strained over increasing Khalistani activities. Following a meeting between PM Modi and Mr Trudeau on the sidelines of G20, India issued a strongly-worded statement expressing "strong concerns" about the continuous "anti-India activities" by extremist elements in Canada.

The Ministry of External Affairs said PM Modi had conveyed in the meeting that extremist elements are "promoting secessionism and inciting violence" against Indian diplomats, damaging diplomatic premises, and threatening the Indian community in Canada and their places of worship.

It added, "The nexus of such forces with organized crime, drug syndicates and human trafficking should be a concern for Canada as well. It is essential for the two countries to cooperate in dealing with such threats".

Asked whether Khlistani activities and "foreign interference" were discussed in the meeting, Justin Trudeau told reporters Canada will always defend freedom of expression, freedom of conscience, and freedom of peaceful protest, "and it is extremely important to us". 

"At the same time, we are always there to prevent violence and push back against hatred," he had said, adding that it is important to remember that the actions of the few do not represent the entire community or Canada.

India had last year served a demarche to the Canadian government, asking it to stop the so-called Khalistan referendum organised by a proscribed organisation in Ontario. The Centre asked the Canadian government to act against those who promote terror and violence against the largest democracy in the world.

Banned organisation Sikhs for Justice, headed by designated terrorist Gurpatwant Singh Pannun, held the Khalistan referendum this week, on September 10, at a gurdwara in British Columbia, Canada.

Ahead of the G20 Summit in Delhi, Canadian Prime Minister Justin Trudeau's government had last month requested a "pause" on trade talks with India, Bloomberg had reported, though no reason was given.

India and Canada had first launched negotiations for a trade deal 13 years ago in 2010. After a lull of almost 5 years, the talks restarted in 2022 with renegotiations on a Comprehensive Economic Partnership Agreement.

Over half a dozen rounds of talks have been held between the countries on the trade pact so far. In March 2022, the two countries re-launched negotiations for an interim agreement-Early Progress Trade Agreement (EPTA). In such agreements, two countries significantly reduce or eliminate duties on the maximum number of goods traded between them. Norms are also liberalised to promote trade in services to attract investments.