Diplomatic strain shouldn’t overshadow Canada and India’s common objectives

Rohinton Medhora

What specific recent developments have contributed to the current complexities in Canada’s relationship with India?

The Canada-India relationship has never been an especially warm one, however, it hasn’t been quite as cold as it has now become. There have always been irritants. One that comes to mind is in 1974 when Canada and the U.S. felt that India had misused nuclear technology that India had been given to do a nuclear explosion, which in the end, people seem to agree was done for peaceful purposes. There have also been strong irritancies around the question of actual or alleged violent Sikh separatists living in this country and doing things in India, which were at best illegal, but nothing quite at this level. You have half your diplomatic corps asked to leave the country, visa processing coming to an end, and a war of words at the highest level between governments. This is unprecedented between two countries that are actually friends and belong to the same broad, global alliances.

How do the recent diplomatic tensions between Canada and India impact bilateral relations and international diplomacy?

The real answer, which is an unsatisfying one, is we don’t know. We’re genuinely in uncharted territory. We’re still in that stage of the dispute where the two sides are barely talking to each other and if they are, they’re exchanging uncomplimentary language. We don’t know what’s going on behind the scenes, both between Canada and India and between Canada’s allies, especially the U.S., UK, and India. This is the stage where things don’t look good at all. As I said previously, visa processing, which may not be a big deal, has been halted, and Canadian diplomats have been thrown out in large numbers.

A couple of things to note here going forward: number one, trade relationships, investment relationships, and even educational relationships—because Indian students are a big proportion of the foreign student population in Canada—are long-term trends and it may well be that these can be in some ways disconnected from the diplomatic issues between the two countries. Second, it’s been a one-way match. So far, India has been doing all the retaliating. Other than expelling one diplomat early on in the fracas, Canada has not been playing the tit-for-tat game. India is doing all it can to sort of throw the book at Canada. Canada’s been taking a more even position on this.

Trade, which was never strong between the two countries, might well slow down, especially because a lot of Canada’s exports to India would be subject to sanitary and phytosanitary inspections and some administrative elements which can be used to slow down trade. It’s clear that anything forward-looking like a trade deal is off the table for the foreseeable future and perhaps forever. I’m a bit more sanguine about investment. But again, who knows? Keep in mind that the kinds of investments that Canada was making in India, especially in the infrastructure sector, could easily be made by India from its other traditional investment partners, Germany, Japan, the U.S., and the UK.

Regarding education, we don’t know. Canadian universities are valued in India, they are good schools, and the prices are reasonable. Most Indian students travel of their own volition and don’t rely on government funding. But to the extent that they listen to government advice, or that universities in Australia the UK and the U.S. ramp up their marketing efforts, we might see a diminution next academic year. In other words, a lot depends on what happens in the next six months.

From your perspective, are there any measures that can be taken to ameliorate current tensions?

We don’t know what’s going on behind the scenes, but Canada has done one thing which in my view is wise. Canada made the quite dramatic announcement in Parliament, by no less than the Prime Minister himself, followed by the expulsion of one security-related diplomat, and has not done anything more. It’s the Indian side that has continued. I have to assume that, although the response has been muted, both the U.S. and the UK are working behind the scenes to find a way forward. Meanwhile, the evidence, whatever it may be, which is another thing we were not clear on, will come out in court or if not, it will be sealed.

But there will be some sense of how serious it was. A lot depends on how that case plays out. Will people be charged? Will an official Indian implication become evident? And what happens then? There’s that little bombshell that we’re not aware of. But short of that, I think diplomatically at this point, what has to be done is to tone things down, and remind everyone that at the end of the day, as tragic as this incident was, it cannot colour relations between two countries that actually see eye to eye on many global issues. As I said previously, Canada and India are actually part of emerging broad alliances, mainly against China, but also against Russia, and that should be valued.

What are the potential implications of India revoking the diplomatic immunity of Canadian diplomats and how does it affect diplomatic norms and relations between the two countries?

On the diplomatic norms side, I would reiterate that this is nearly unprecedented. To have almost half your diplomatic corps leave a country that is allegedly a friend and ally means something. Now, what were these folks doing? And What doesn’t get done? is the second question. Clearly, as the Canadian government has pointed out, visa processing for Indian applicants to Canada will slow down. In principle, it can be done from other cities in the region, or indeed from Ottawa. A lot of that is outsourced anyway. But yes, there’s some blowback when it comes to travel, education, business permits, and work permits, which would slow down.

Canada’s eyes and ears in India—its presence—both for hard power, to the extent that we have it, and soft power, which we do wield will now be significantly lower, especially in the secondary cities, which have been affected by the closure of a Canadian consular presence there. Beyond that, again, in the age of connectivity, I’d be hard-pressed to say that not having boots on the ground is definitively a sealed window anymore. But the symbolism in some ways is more important than what actually happens. I think a lot of what we now do in terms of monitoring and relationship building can be done imperfectly from elsewhere.

How is the present diplomatic issue regarded in India, specifically by both the public and the Indian government?

The Indian government’s response has been pure outrage. Having raised the issue privately, apparently, with the Indians and gotten nowhere, we did nothing less than have our Prime Minister rise in Parliament and make a statement, brief the opposition leaders in advance and therefore turn this into a real national security issue. The Indians have reacted to that in two ways, which in my view, by the way, are not compatible with each other. On the one hand, the official reaction appears to be there is no evidence, how dare you, we haven’t seen it, share it first, and a complete dismissal of the charge itself. The second, more subtle reaction, which as I say, is not compatible with the first is to say, we’re now a global power. We have finished rising, we have risen. Lots of countries do this—the U.S. Israel, you name it. Lots of countries do this kind of thing. How dare you pick on us only? You can’t have it both ways. That is the official reaction.

Unofficially, by which I mean, if you scan the Indian press—which by the way, is very diverse and lively—it has been broadly in the outrage to sceptical camp. Even papers and media outlets that are not uniformly pro-government have made the point that this is another example of Western double standards, that we seem to be okay with some countries doing this but not others, and that India is being picked on. Then from there, it’s half a step to go to, colonial mentality, etc., even though Canada and India share a colonial heritage. But that kind of discourse in the Indian press is never far away.

The other side of this, from the Indian perspective, is to say, he had it coming. We’ve been raising the issue of violent Sikh separatists in your country for some time. You haven’t taken that seriously. I’m just explaining what the Indian side says, not whether it’s true or not. In any case, the Indian reaction, both official and unofficial, has not really been in any way friendly or understanding to the Canadian position.

What unique challenges and opportunities are present in the Canada-India economic relationship, and how do these factors shape the long-term outlook for their bilateral ties? 

The Canada-India relationship is one that has great promise. If you simply look at the one-way immigration flows, you might think it must be blossoming. But the real answer is that it has never been particularly deep or wide. There have been episodes. I would say that, in the early decades after Indian independence in 1947, Canada’s foreign policy was still oriented at its British and European roots, and at its very strong gravitational pull south to the U.S. So, it didn’t matter except from an international development and foreign aid point of view. There wasn’t much strategic sense to that relationship.

There have been periods of warmth at the leadership level, which unsurprisingly have not translated into anything more. Clearly, Pierre Trudeau, intellectually, was taken by the non-aligned movement, and all those things that India and other large developing countries stood for in the 60s and 70s. I think he had a good relationship with Indira Gandhi. I mean, I can see the two of them interacting well at one level, but the 1974 nuclear explosion kind of put an end to that turning into anything more. Trudeau was obliged, in some ways to curtail Canada’s interactions with India.

Brian Mulroney had a strong relationship with Rajiv Gandhi, mainly over the question of ending apartheid in South Africa, where you will recall Mulroney positioned himself in Canada, as the country that would convince Margaret Thatcher and, indeed, the sceptical Americans to finally move on South African independence. That played well in India and more recently, Paul Martin and Manmohan Singh had a good relationship at the Prime Minister level because they were both former finance ministers who had ascended to the Premiership. They weren’t pure politicians, but rather, technocrats. Paul Martin was promoting what became the G20, which again, brought India into the global governance table.

Mr. Singh appreciated that and more broadly, the Indian intelligence appreciated that. Finally, I’d say in the Harper years, there was this focus on democracy and friendship, which didn’t translate into a trade agreement, but there was the sense that something might happen. But it really hasn’t gone beyond that. The reason is, that India has its own dynamic when it comes to economic liberalization. India very much is not quite in the same camp as Canada. I suspect that just as the long-term irritant for India has been Canada’s home for Sikh separatists, for Canada, India has still been recalcitrant when it comes to liberalization. Things just don’t seem to move as well as they do. That’s the background.

Now, where would this have gone had there not been this incident? I’d say the role of our pension funds in India was and remains a genuinely promising sphere. Canada brings, through its pension funds, patient money with technical expertise in areas that India values—green tech, infrastructure, and health systems. Canadian pension funds like this because it helps them diversify their portfolio away from the standard investments in the U.S., and parts of Europe. So that relationship would have blossomed and not on the trade agreement itself. Many of us are sceptical that it would have led to much more because trade tends to be driven by fundamentals, which would not have changed had the trade agreement been signed. I have colleagues who would say that there were new product lines, driven by the investments that might have emerged. The bustling traded students, if I could call it that, means a lot to some Canadian colleges and universities. And that’s all kind of in the deep freeze.

India was seen by the Western alliance as the antithesis to the rise of China. If you want to take friend-shoring, and the reshaping of global supply chains seriously, although Indian infrastructure is still quite poor, India would have been a central core of that game. Although India remains a core of that game, the Canada-India dimension of the alliance is now quite frayed. I don’t think this will stop the U.S., the UK, and others from courting India. In fact, they’re probably rolling their eyes at what they have to deal with in this episode, given their own interests in India. But I do think what we’re seeing is that alliances are not uniform, and friendly alliances are not always friendly. We know that from the European Union, NATO, and COFTA. It is quite possible that friends quarrel.

How is India’s influence in international geopolitics evolving, and how does it affect Canada’s strategic interests and partnerships in the Indo-Pacific region?

Canada is too little too late. When it comes to the Indo-Pacific region. I think we kind of unveiled a strategy that barely got off the ground and didn’t have much new or original to say. In the last ten years, India has gone from, we’re emerging to we’ve emerged because the only viable way to counter China is by investing in India and to a lesser extent, South Africa. Then, of course, the usual suspects—Vietnam, Burma, all of that puts India in a very central kingpin position. Its membership in the BRICS gives it a certain cachet of being part of two alliances of Western as well as non-Western lines.

The sheer size of the Indian economy and society, which has been growing healthily in the last two decades since liberalization in the early 90s, gives India heft that it is not used to seeing. So, India has gone from being a bit of a foreign aid recipient to being a strategic partner who’s actually got its own foreign aid programme, invests in other countries, and is in every way seen as an economic power and political power in many parts of the world. You have a rising India, and you have a relatively stagnant, if not declining, Canada. There are measures by which Canada barely belongs to the G7 and barely belongs to the G20. We just don’t carry that weight. Therefore, this also tells us something else about the episode, which is, that Canada is easy to push around.

We saw this with China and Meng Wanzhou and we’re seeing it now with India, that it’s an easy way for an emerging power or an emerging power to stand up to the West, without paying all the consequences. I don’t think India would have done this had the other side been the U.S., UK, or indeed Germany or Japan, where of course, there is no Sikh movement to talk of. I don’t think those countries would have been treated the same way that Canada has. I think Canada is geographically large enough, Western enough, and visible enough, yet also small enough and strategically unimportant enough, that it makes sense to push us around. We’re just caught in that vise and we have to find some sensible way of freeing ourselves, and indeed, the Indians from it.

In what ways does India’s rise serve as a counterbalance to China’s growing influence in Asia and the Indo-Pacific?

India is not in the same league as China when it comes to global power, using any measure you want. You can look at the size of the economy, per capita income, diplomatic influence, infrastructure, foreign investments, size of the army, and security more broadly—you name it. India is many steps behind China. There are small investments here and there that are being trumpeted—Apple opens a factory in India to show that India is now a viable competitor. But the fact is, if you add up all the infrastructure capability of India, Vietnam, Burma, and all the other countries being treated as alternatives to China, they don’t add up to what China gives the global supply chain and value chain. When it comes to technologies, China outweighs India by miles and miles in areas that matter.

I think it’s more the symbolism of aligning yourself with a large democracy, but we haven’t talked about the fact that many people feel Indian democracy is fraying and is not quite as healthy as it used to be. But still, it is not quite China, so India is seen as a friend-shoring ally. I think that’s important. If we were having this conversation 10 or 20 years from now, it may well be that it turns out to have been some strategic investment. But for now, investing in India alone will not help you with your China problem.

To put this all in context, in the long run, India and Canada belong to each other. It would be a pity if we don’t see a way around this, by which I don’t mean caving in by any one country or the other. I think we are right to stand up for our citizens and our security and India has a right to worry about its own security and its own place in the world. We just have to find a way for that to happen. The underlying conditions, I think, are there. This is a job for diplomats, businessmen and civil society to sort out now.

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