How the India-Canada diplomatic row could cost Ottawa $700 million in 2024

India-Canada ties are hitting a new low with each passing day.However, Ottawa may be in for millions economic shock as a result of its dispute with New Delhi, according to research by an independent think group with offices in New Delhi and New York.Even if the number of Indian students coming to Canada for higher education falls by just five per cent in 2024, according to the Imagindia Institute, the Canadian economy will suffer a $700 million (~Rs 58 billion) impact.Let's take a closer look.A big loss to OttawaIndian students frequently travel to Canada in three groups each year: in January, in May, and in September, according to Robinder Sachdev, president of Imagindia, who was mentioned by local news outlet ETV Bharat.With an estimated 200,000 students per year, India is the largest source of international students who study in Canada.“Around one-third or 66,000 go to Canada during the January intake,” he said. According to the report, Indian students have fear for their safety as a result of the continuing diplomatic standoff between the two countries. This may cause fewer students to choose Canada over other international destinations.It also says each Indian student in Canada spends an average of $16,000 (~Rs 1.3 million) in total.“This includes laptop purchase, housing costs, bank security, and air ticket. The total expense for two years of study and stay comes to around $53,000 (~Rs 4.4 million) per student. The total money injected per student into the Canadian economy over two years is $69,000,” Sachdev told ETV.According to the report, the Canadian economy would lose at least $230 million (~Rs 19.1 billion) if the January batch saw a five per cent decline (3,300 fewer students).The overall loss to Canada will rise to $690 million (~Rs 57 billion) if a similar decline is observed in the May and September batches as well.Lessen visa requests will also result in lower visa fees, a $3 million (~Rs 249 million) loss, for the Canadian High Commission in India, the report estimates. Approximately 225,000 Indian students were given visas to Canada in 2022, as per Wion News.Moreover, Indian students continue to support the Canadian economy after graduation as they continue to work at local firms. A loss of $34 million (~Rs 2.8 billion) for small Canadian firms could occur from fewer Indian students traveling to Canada.Considering these, a loss of $727 million is projected for the Canadian economy overall.[caption id="attachment_13213362" align="alignnone" width="640"]

The overall loss to Canada will rise to $690 million (~Rs 57 billion) if a similar decline is observed in the May and September batches as well. AP[/caption]Canada moves diplomats from IndiaIn the latest development, Canada has moved a majority of its diplomats working in India outside of New Delhi to either Kuala Lumpur or Singapore, according to PTI.The move comes after India asked Ottawa to reduce its diplomatic staff in the country by more than half, the Financial Times reported on Tuesday.Canadian prime minister Justin Trudeau publicly levelled suspicions that Indian agents were involved in the killing of a Sikh separatist leader in a Vancouver suburb.Hardeep Singh Nijjar was shot dead by unidentified gunmen outside a Sikh temple on 18 June.India had designated him as a “terrorist” three years earlier.Tit-for-tat moves by both countriesCanada paused talks on a proposed trade treaty with India, a Canadian official said on 1 September, an unexpected move that came about three months after both countries said they planned to seal an initial pact this year.Prime Minister Narendra Modi conveyed strong concerns about Sikh separatist protests in Ottawa to PM Trudeau on the sidelines of a G20 summit in New Delhi on 10 September.Canada postponed a trade mission to India planned for October led by Trade Minister Mary Ng, a spokesperson for the minister said on 15 September. Canada’s decision to halt trade treaty talks and postpone the mission was due to concerns surrounding the murder, according to Reuters who quoted a Canadian source as saying.Trudeau told parliament on 18 September that Canada was “actively pursuing credible allegations” linking Indian government agents to the killing of Nijjar.India dismissed Trudeau’s assertion as “absurd” on 19 September. Both countries expelled diplomats and sent them to their homelands.India urged its citizens in Canada to exercise caution in a statement on 20 September, as the US, Australia and Britain expressed concerns about the issue.India’s JSW Steel Ltd (JSTL.NS) is slowing down the process to buy a stake in the steelmaking coal unit of Canada's Teck Resources (TECKb.TO), Reuters reported on Sept. 21 citing a source close to the discussions.India suspended issuing new visas for Canadians on 22 September and asked Ottawa to reduce its diplomatic presence in India.Fertiliser importer Indian Potash said on 22 September that it does not expect supplies of Canadian potash to be affected by the row and that it hopes to extend a contract with Canadian supplier Canpotex beyond the end of September. Canada is one of the key suppliers of potash to India.Canadian lentil sales to India slowed after tensions rose between the two nations, industry sources in both countries told Reuters. Canada is India's main import source of lentils, a protein-rich staple.India's steel secretary told reporters on 28 September that Indian exports to Canada were marginal and have not been affected by the diplomatic row.With inputs from agencies