Will the US slap India with economic sanctions at a time when the US–India ties are at a crescendo? Will Canada be able to persuade Australia, New Zealand, and the UK along with Washington, members of the Five Eyes to punish India for allegedly engineering the murder of Khalistani separatist leader Hardeep Singh Nijjar?
Economic Sanctions Against India?
These questions have been raised after Ottawa invoked the support of its allies to sanction New Delhi. When asked if Canada is planning sanctions against India, Foreign Minister Melanie Joly said, “Everything is on the table.” She said further that her country would continue to push India to make sure it cooperates. She added that Canada would continue on the issue with partners in the intelligence group.
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The matter became more serious when a spokesperson of the State Department said, “We want to see India cooperate with the investigation and they have obviously chosen not the path.”
Justin Trudeau Warns India
Melanie Joly’s threat of sanctions came a day after Canadian Prime Minister Justin Trudeau publicly accused India of being involved in the murder of separatist Khalistani leader Hardeep Singh Nijjar. He alleged that India used gangs of criminals against citizens of Canada on the soil of Canada. India has rejected all charges.
India-Canada Trade Ties Go Up
India-Canada relations began to go down after Prime Minister Justin Trudeau took office. India- Canada spat came at a time when the bilateral trade is going up. India imported goods worth $4.6 billion in 2023-24, up from $4.1 billion in 2016-17. Indian exports increased from $2.0 billion to $3.8 billion during this period.
Canada Invests $54 Billion
While India exports gems and jewelry, pharmaceuticals, marine products, jewelry, precious stones, mechanical appliances, organic chemicals and iron and steel articles to Canada, it imports potash, pulses, industrial chemicals, iron scrap, copper, minerals, and gemstones.
Besides, Canadian entrepreneurs have invested a total of over $54 billion in India.
According to the think tank Global Trade Research Initiative (GTRI), Indo-Canada bilateral trade has not been hit by the worsening relations. Experts believe the diplomatic and political relations would not impact it adversely. However, if Canada imposes sanctions or even lobbies with the Five Eyes countries or G-7 nations, India may retaliate by increasing tariffs on imports from Canada.
India – US Trade Ties
Political observers believe there is no possibility of the US imposing economic sanctions. The trade relations between the two countries have been growing for a decade despite the US accusations of wrongful trade practices by India. Though the Republican candidate for the US Presidential Election Donald Trump has threatened New Delhi with increased tariffs on its imports, experts believe it is just political rhetoric for public consumption before the polls.
India: Geopolitical Significance
Secondly, India has suddenly become very important from the geopolitical point of view at a time when the US wants to use New Delhi to counter China in the Indo-Pacific and the South China Sea. Australia and New Zealand too attach much more significance to India due to its increasing stature in the Indo-Pacific region. The Quadrilateral Dialogue or Quad has gained so much significance that it is being dubbed as the ‘Asian NATO’ and India has emerged as its important player.
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Neither the US nor Australia can offend India by slapping it with sanctions due to their own interests and geopolitical compulsions.
UK-India Ties
The UK and India have almost wrapped up the talks for Free Trade Agreement and the two governments are most likely to sign the deal very soon. It is more useful to the UK because since quitting the EU, its trade has been in the doldrums and London wants a partner to boost its trade. It cannot anger India to appease Canada.
Trudeau’s Political Compulsions
Political experts believe Justin Trudeau has upped the ante against India to appease the Sikh population that lives largely in the provinces of British Columbia, Vancouver and Toronto. About 7,70,000 Sikhs live in Canada, where pro- Khalistani elements have succeeded in making significant inroads.
Though they count only about 2% of the population, such are their population concentration and voting pattern that 18 Sikh parliamentarians were elected in 2021. Justin Trudeau’s government is dependent on their support as it failed to get a majority in the last general elections.
Experts believe the Canadian government itself will not press too much for imposing sanctions against India, it will just keep on creating the rhetoric to appease Sikh voters.
