India-Canada spat over Sikh separatist murder risks 'economic fallout'

Tit-for-tat expulsion of diplomats heralds new low in fraught relations

20241021 Modi and Trudeau

Indian Prime Minister Narendra Modi, left, and his Canadian counterpart Justin Trudeau: Ottawa has accused Indian agents of killing a Sikh separatist in Canada. © Reuters

KIRAN SHARMA, Nikkei staff writer

NEW DELHI -- The spiraling diplomatic spat between India and Canada over the murder of a Sikh separatist risks "economic fallout" in their multibillion-dollar trade and business relationship, analysts warn.

So far, the countries' more than $8 billion annual trade ties -- and a total of 75 billion Canadian dollars ($54.3 billion) invested by Canadian pension funds in India -- appear to have been largely unaffected by the yearlong spat. Government officials on both sides have played down concerns that economic ties could fall victim to a bitter dispute that has sent bilateral relations to rock bottom.

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