India appears unfazed over strained ties with Canada, even as the North American nation seems to be on the backfoot and the world is wary of the political and economic fallout from the diplomatic tensions.

The latest escalation has seen India and Canada - both on the list of the world's top 10 economies by nominal GDP - expel diplomats of the other countrywithin a day. The moves by both countries were nearly concurrent, coming as they did on Monday, 14 October.

This came hours after India's Ministry of External Affairs released a statement on the same day about Canada apparently communicating to it a day earlier that "the Indian High Commissioner and other diplomats are 'persons of interest' in a matter related to an investigation in that country".

The reference was to Canadian Prime Minister Justin Trudeau's allegations from September last year that the Indian government was involved in the June 2023 killing of Khalistani separatist and Canadian citizen Hardeep Singh Nijjar.

India-Canada trade

According to official data, Canada's imports from India were more than its exports to the country in terms of the US dollar. The Consulate General of India in Toronto, Canada, says on its official website that in FY2023, Canada's exports to India amounted to $3.88 billion. It adds that India's exports to Canada in the same period were valued at $4.08 billion.

Canada's biggest export to India in that financial year was medicaments - anything used for medical treatment. It may be noted that India is known for producing cheap generic medicine, which is expensive under patents in various parts of the world.

Canada, meanwhile, has socialised medicine - as opposed to the US, whose privatised healthcare and medical industry makes even ambulance rides and hospital visits for the simplest of maladies an expensive venture for the masses.

Thus, Canada benefits greatly from India's cheaply-produced medicaments, which help it keep the reins on the government's healthcare budget.

Meanwhile, India's biggest import from Canada is bituminous coal, which India - as a developing nation with a very-fast-growing economy - uses in not only electricity generation but also in several corners of the manufacturing sector, especially when it comes to ifrastructure.

'Fully committed' to trade, says Canada

Canada's Minister of Export Promotion, International Trade, and Economic Development Mary Ngwas quoted as saying in a statement dated Monday: "I understand the effects today's events may have on Canadians doing business or investing in India, and the uncertainty that some may be feeling at this time."

She added: "I want to reassure our business community that our government remains fully committed to supporting the well-established commercial ties between Canada and India." Ng also said: "Our Trade Commissioner Service will continue to assist and provide resources to Canadian companies operating in India."

The minister chose the words "let me be clear" to emphasise the fact that "Canada stands firmly by its businesses." She added: "We will work closely with all Canadian enterprises engaged with India to ensure these important economic connections remain strong."

Ng, however, ended the statement with the pledge: "...[W]e must consider our economic interests with the need to protect Canadians and uphold the rule of law."

World wary?

Meanwhile, the world appears to be wary of the latest escalation between the world's fifth and 10th-largest economies (by nominal GDP).

For example, Australia's national broadcaster ABC quoted a spokesperson from the country's Department of Foreign Affairs and Trade as saying: "Australia respects Canada's judicial process... We have conveyed our concerns to India."

The individual added that their country understood that "these reports will be particularly worrying for some communities in Australia." The spokesperson continued: "Australian Indian communities are valued and important contributors to our vibrant multicultural society, where everyone can peacefully and safely express their views."

There has been no official reaction from the US on India-Canada trade ties in light of the latest diplomatic turmoil.