Opinion: India, Canada Pause Trade Talks Amid Strain. Where Are Ties Headed?

In the latest setback to already complicated relations, Canada's trade commission announced on its website that the trade mission to India had been postponed.

The 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.

The trade deal negotiations were also halted last month by Ottawa and no specifics were put forward. Before Canadian Prime Minister Justin Trudeau was heading to India for the G20 summit, he was asked in Singapore about the reason for pausing the trade negotiations. He cautiously said, "We know the negotiations around free trade are long and complex and I won't say any more," as reported by Canadian media.

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. Within a year, the talks seem to have once again hit a rough patch.

In New Delhi last week at the G20 summit, the chill in the relationship was visible. India released a statement saying Prime Minister Narendra Modi conveyed "strong concerns about continuing anti-India activities of extremist elements in Canada". The statement added that the anti-India activists were "promoting secessionism and inciting violence against Indian diplomats, damaging diplomatic premises, and threatening the Indian community in Canada and their places of worship".

Notably, when asked about the meeting, PM Trudeau pointed indirectly to India for interference in its internal matters. He told the media that "diaspora Canadians make up a huge proportion of our country and they should be able to express themselves and make their choices without interference from any of the many countries that we know are involved in interference challenges".

Sikhs for Justice, a group banned in India, held a Khalistan "referendum" in Surrey in British Columbia as Day 2 of the G20 Summit took place in India on September 10. India has raised objections to such activities in the past with not just Canada but even UK and Australia, saying this is a secessionist call that threatens the sovereignty of India and shouldn't be allowed by countries that respect the rule of law and sovereignty and territorial integrity of nations.

Trudeau's support for the farmers' protest in India in 2020 had not gone down well with the Indian government. New Delhi had called it "unacceptable interference" in India's affairs. The then Canadian high commissioner to India, Nadir Patel, was summoned by the Ministry of External Affairs and handed a demarche, or a diplomatic note. The statement from India had also warned that it could have serious damaging impact on ties between the two countries.

Back home in Canada, Trudeau has faced some bad press over what has been called by a CTV contributor Don Martin as the second Delhi debacle. After the strained exchange on the sidelines of G20, the Canadian PM was unable to fly back home for two days as his plane developed a snag.

Trudeau is already confronting sagging popularity ratings over affordability concerns in Canada and tough questions from the opposition over a housing crisis and food inflation. For the moment, he has ruled out stepping down saying he will tackle the challenges.

When trade negotiations restarted in 2022 after a pause, many were hopeful that the relationship would slowly be brought back from the edge, even if transactionally. However, the diplomatic fallout over issues ranging from human rights, and Khalistan to allegations of political interference have impacted trade instead.

(Maha Siddiqui is a journalist who has extensively reported on public policy and global affairs.)

Disclaimer: These are the personal opinions of the author.