Diplomatic Row Escalates Without Impacting India-Canada Trade Relations

The diplomatic rift between India and Canada is unlikely to disturb trade and investment ties, claim government sources. Despite tensions, trade continues unabated, with India's imports growing slightly. The situation requires careful handling to prevent economic fallout. Diplomatic expulsions followed accusations linked to allegations of India's involvement in a murder.

The escalating diplomatic tension between India and Canada is reportedly having no direct impact on their bilateral trade and investment relations, according to government sources. Despite the strained political backdrop, trade values between the nations remain stable, with Indian imports from Canada showing a slight increase.

Government officials have reiterated India's status as a preferred investment destination, pointing out that significant investment flows are being routed through different countries like Singapore, the UAE, and the US. Meanwhile, alternative sources for imports, particularly lentils, have been identified, mitigating potential risks.

Political strain intensified as Canada accused India of involvement in the killing of a Sikh separatist leader, leading to diplomatic expulsions and a halt in Free Trade Agreement discussions. Experts highlight the need for both nations to navigate this period carefully to avoid an economic fallout.

(With inputs from agencies.)