India Suspends Trade Talks with Canada Amid Khalistan Dispute Following Trudeau's G20 Visit

India has halted negotiations for a comprehensive free trade agreement (FTA) with Canada, citing concerns that Ottawa is harboring subversive elements involved in anti-India activities on its soil. While the bilateral merchandise trade between the two nations stood at a modest $8 billion in FY23, with balanced exports and imports, India has paused trade talks due to strategic and national interest considerations.

The significance of the trade relationship is also being questioned, with bilateral trade viewed as relatively insignificant. In FY22-23, India exported goods worth $4.11 billion to Canada and imported items such as coal, fertilizer, pulses, pulp, and aluminum worth $4.17 billion. In the first four months of FY24, India's exports to Canada declined by over 20%, amounting to $1.24 billion, while imports contracted by 6.39% to $1.32 billion.

India's exports to Canada encompass pharmaceuticals, iron products, telecom equipment, garments, marine products, auto components, iron, and steel. The suspension of free-trade talks followed Prime Minister Narendra Modi's expression of strong concerns to his Canadian counterpart, Justin Trudeau, during the latter's recent visit to India regarding anti-India elements promoting secessionism.

The negotiations for an India-Canada FTA were progressing well until the suspension. The ninth round of talks took place in a virtual format from July 12 to July 21, covering various trade-related aspects. India was initially negotiating an interim Indo-Canada Early Progress Trade Agreement (EPTA), expected to evolve into a Comprehensive Economic Partnership Agreement (CEPA) or a broader FTA.

Canada has made substantial investments in India, with Canadian Pension Funds investing over $55 billion in the country. More than 600 Canadian companies operate in India, and over 1,000 are actively pursuing business opportunities in the Indian market, underscoring the importance of the economic relationship between the two nations.

Also Read: Hardeep Singh Nijjar: The Khalistan Figure in the India-Canada Standoff

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