What Canada's row with India means for an already underperforming trade relationship
CTV
The diplomatic row between Canada and India could derail a trading relationship that already underperforms its potential, experts warn.
The diplomatic row between Canada and India could derail a trading relationship that already underperforms its potential, experts warn.
Relations between the two countries have hit a new low with Canada's decision to expel New Delhi's top envoy and five other diplomats on bombshell allegations Monday from the RCMP, who said that Indian government agents have been linked to murder, extortion and coercion in Canada.
International Trade Minister Mary Ng tried to reassure Canadian businesses, issuing a statement Tuesday acknowledging the "uncertainty" the situation creates for exporters and investors. She said the federal government will continue to support commercial and economic ties between the countries.
But analysts say there is no way the trading relationship between Canada and the world's fastest-growing economy can escape unscathed from this latest escalation in tensions — at least not in the immediate future.
"This is an extremely significant development. We are seeing a diplomatic disruption, a rupture in the relationship, on a scale that is unprecedented," said Vina Nadjibulla, vice-president of research and strategy for the Asia Pacific Foundation of Canada.
"It's maybe too soon to say what the economic consequences will be, but it will definitely have an impact," she said.
"In the short term, I think certainly this will have a negative impact ... if you're a Canadian business who's trying to get a foothold into India or if you're an Indian business trying to do something in Canada," said Partha Mohanran, director of the India Innovation Institute at the University of Toronto.
