The India-Canada stand-off maybe at a crucial point, but it’s the businesses that are feeling the heat of the aftermath of the political tension between the two nations. India Today spoke to business-owners and those from the business community in Canada for a deeper understanding of what is at stake.
COLLATERAL DAMAGE
The ongoing tension is definitely showing an impact on the business community in Canada.
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“The Canada-India diplomatic tensions are having a significant impact on Canadian businesses, particularly in sectors like IT, education, and tourism, which rely heavily on Indian workers, students, and tourists,” said Ritesh Malik, Chair of Canada India Foundation based out of Toronto, Ontario.
“Visa delays have doubled, hindering mobility for talent and trade. Business trips and events, such as Ontario Trade Minister Vic Fedeli’s planned trip and the Canada India Foundation’s Annual Gala to honour Sadhguru, have been postponed, representing lost opportunities for business and community engagement. The uncertainty in future trade relations, especially in agriculture and energy, is deepening concerns about long-term business opportunities,” he added.
The event to honour Sadhguru was scheduled to be held on 7th November 2024, that now stands postponed due to the current tensions.
“Additionally, Canadian businesses are facing a dilemma of managing continuity, seeking diversification, and bracing for potential further disruption if diplomatic ties do not improve. Businesses will need to collaborate with government agencies to navigate these challenges while pushing for diplomatic de-escalation to ensure economic resilience,” he said.
CONSISTENT DROP IN TRADE FIGURES
Total trade between both nations since 2021, was at roughly $6 billion, increased to $9 billion in 2022, but dropped to $8 billion in 2023 as per data from the consulate general of India on commerce.
Experts suggest that the drop in trade figures between the two nations points to the failing relations between the two countries since 2023.
Ajit Someshwar, an Indo – Canadian entrepreneur, Founding Convenor and former Chair of Canada India Foundation and presenter of Holla Talks, on the social platform YouTube, said, “There is apprehension about furthering any business relationship between Canada and India since the media here has been drumming the national narrative.
“The Indian apprehension is that, if they can ever trust Canada and potential sanctions after government statements, everything is on the table. Consumables, pharmaceuticals, and technological services come from India to Canada. Canada exports potash, lentils, coal etc., All these require consular access and if consular services, including visa services, are delayed, a delay in business means no business at all as buyers and sellers move on. The reduction of Indian students will reduce Canadian GDP by over $5 billion annually next year. I don’t see any enthusiasm in the business community here now”, said Someshwar.
TOURISM MOST IMPACTED
Amongst sectors that are the hardest hit, tourism tops the list.
“Visa delays have doubled, significantly affecting both tourism and business travel, leading to lost revenue for the hospitality and tourism industries. Indian students, a crucial part of Canada’s international education sector, are facing uncertainty, with delays in student visas affecting universities and colleges that rely on these enrolments for revenue and cultural exchange,” he said.
INDO-CANADIANS FEAR BEING TARGETED BY EXTREMISM
Indians in Canada are worried about the India-Canada relationship and its future and much is at stake.
“Yes, many Indo-Canadians are deeply concerned about the deteriorating India-Canada relationship, as it directly impacts their personal and professional lives. Additionally, the Indo-Canadian community fears being unfairly associated with extremism or targeted by extreme ideology for their natural association with India, leading to increased tensions. Indian students and professionals, vital to Canada’s education and workforce, face visa uncertainties, which could result in a talent shortage,” said Malik.
“Indo-Canadians face the wrath of Canadians as they have been identified wrongfully as India supporters by politicalisation of the the India-Canada spat as well as hate mongers including Khalistan supporters sloganeering “Hindus Go Back” and the desecration of Hindu temples. NONE of the rascist hate mongers have been apprehended and persecuted by law enforcement agencies. There is no public outcry from the media or the mainstream political parties. Those desecrating Jewish synagogues are apprehended immediately. This double standard is troubling. The Hindu community is the most upward mobile and educated community of all immigrant communities. If Canada wants to build an NVIDIA here, Indians and the Hindu community are needed,” said Someshwar.
WILL TRADE AND COMMERCE BE DIRECTLY IMPACTED?
Amid the uncertainty, there is also talk about trade and bilateral relations not being affected in the political crossfire.
As per India-Canada Trade Data (2023), Indian exports to Canada stood at $4.08 billion and imports by Canada from India was at about $3.88 billion.
India has been exporting medicines that form 8.2% of the items exported, Smartphones at 4.7%, Jewellery is at 3.2%, Shrimps and Prawns at 2.5%, diamonds and non-industrial at 2.4%, rice at 2.1%, self-propelled railway wagons at 1.8%, transmissions for local vehicles at 1.3% and petroleum oils at 1.3%.
At least 72.5% of miscellaneous items are exported to Canada. Meanwhile, India imports commodities from Canada like 20.5% bituminous coal, 14.4% lentils, 11.1% potassium chloride, 5.7% newsprint, 3.3% copper ores, 3.9% diamonds. In this, a large chunk of 41% are other miscellaneous items that are imported by India as per data provided by the India-Canada Trade Data (2023), consulate general of India.
While there’s optimism that trade might not be directly targeted, it’s unlikely that trade and bilateral ties can be completely insulated from the broader diplomatic fallout. Canadian Trade Minister Mary Ng has reassured businesses that Canada is committed to maintaining strong economic ties with India, with support through the Trade Commissioner Service.
However, she also stressed the importance of balancing economic interests with protecting Canadian sovereignty and the rule of law.
“Moving forward, trade may face indirect challenges, such as a decline in business confidence, potential regulatory hurdles, or disruptions to key sectors like energy and agriculture. Investments might still continue as they are purely based on returns, which I feel India is doing fine and attracting all the capital in the world. But trade relations for sure depend upon working relationships, cooperation and strong partnership, which for sure are missing at the moment. Relationships for sure need to be worked upon for trade to realise its true potential,” said Malik.
“The backlash from the current standoff is expected to have wide-ranging consequences. Diplomatic isolation could deepen, making negotiations difficult. While trade isn’t directly targeted, the political strain may decrease business confidence, slowing down investments in key sectors like technology, education, and agriculture. The Indo-Canadian community may face growing tensions, fearing extremist targeting and division within the community. On a broader scale, both nations risk damaging their international reputations, affecting their global relationships and their ability to foster mutual trust,” Malik comments.
EXPECTATIONS OF THE BIZ COMMUNITY
So, what is expected from diplomacy in both countries? Malik thinks that both countries are expected to pursue de-escalation through backchannel communication, focusing on reducing tensions and keeping dialogue open.
“Canada will likely address India’s concerns regarding extremism, particularly the Khalistan movement and steadfast commitment towards the sovereignty of India, while maintaining its stance on freedom of expression. India will remain focused on issues of sovereignty and security, pushing for greater control over extremist elements abroad. In the long term, diplomacy will likely focus on repairing trust and restoring bilateral ties, especially in areas like trade and people-to-people connections.”
“Business was growing between India and Canada year-on-year, but now things may seem on hold. There was talk of a free trade agreement, even Indian commerce minister Piyush Goyal visited Canada last year. So there is uncertainty for the business community, said Pankaj Dave, President and CEO, Manas International Inc, a steel and raw materials company in Canada.
“In people’s space, there is apprehension among elderly people who are not travelling to India since they think they will not be able to return to Canada. I can only hope the issue gets resolved soon since both countries have great potential for trade and commerce,” he added.
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