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How will Canada react to the re-election of Narendra Modi?

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FILE: Indian Prime Minister Narendra Modi with Canadian Prime Minister Justin Trudeau at Hyderabad House in New Delhi on February 23, 2018. (File photo by Office of the Prime Minister (GODL-India), GODL-India/Wikimedia Commons)

(French version available here)

On May 3, 2024, three people were arrested in connection with the June 2023 assassination of Sikh leader Hardeep Singh Nijjar in British Columbia. Last September, Prime Minister Justin Trudeau accused the Indian government of involvement in the assassination, marking a new chapter in the saga of cooling relations between Canada and India.

India is in the middle of an election. In the world's largest democracy, hundreds of millions of voters have exercised their right to vote since April 19. The last day of voting is June 1. Bharatiya Janata The Indian party (BJP), which won two consecutive majority mandates in 2014 and 2019, is seeking a third mandate.

The outcome of the election is not really in doubt. The opposition has regrouped around the Congress-led INDIA coalition, which dominated Indian politics until 2014. But it was unable to offer a viable alternative to Narendra Modi's party.

How will Canada position itself after this election?

Historical tensions

The Sikh diaspora represents about 2 percent of Canada's population, or nearly 800,000 Canadians. It is also the largest Sikh community outside India, which partly explains the strained relations between the two countries. The Sikh diaspora is heavily involved in a separatist movement, as evidenced by the organization of an unofficial referendum in Canada and other countries to create Khalistan, a Sikh-majority state in the region that includes India's Punjab.

India accuses Canada of doing nothing to curb the activities of the movement, whose members are viewed by many in Delhi as terrorists. Modi's government views the granting of Canadian citizenship to separatist Sikh leaders and Ottawa's inaction as a form of interference in the country's internal affairs.

Modi's BJP is a Hindu nationalist party with a public Hinduism Philosophy: To make India a Hindu state by restricting the rights of minorities, be they Sikhs, Muslims, Christians or others. Since 2014, the central government and the governments of other BJP-led states have passed laws that discriminate against religious minorities, including the two-tier citizenship law or the law restricting interfaith marriages between Hindus and Muslims.

This “Hinduized” vision of India partly explains why the government attaches so much importance to the diaspora-driven Sikh separatist movement.

The separatist movement has been less visible since the 1990s, but the BJP's rise to power has breathed new life into it. This situation is at the heart of diplomatic tensions between Canada and India and has a direct impact on their economic relations.

Moreover, the Modi government has been duplicitous in its foreign and domestic policies. Within its borders, it maintains that the Hindu nation must be protected from any movement that undermines the unity of the country. In the current election campaign, Modi is using his strained relationship with Canada as an example to reinforce nationalist sentiments. By talking about ethno-religious tensions and stoking a Hindu nationalist discourse, he can divert attention from more pressing issues, such as the state of human development in the country.

While the unemployment rate was still around 6.6 percent at the beginning of 2024, it is now 44 percent for 20- to 24-year-olds and 14 percent for 25- to 29-year-olds. In the 2024 World Press Freedom Index, India ranked 159th out of 180 countries. According to the Human Development Index, three out of 100 babies will die before their fifth birthday in 2022.

Outside its borders, the Indian government boasts of being the world's largest democracy thanks to the size of its electoral process. But democracy in India is in serious decline: inter-communal violence is on the rise, information control is becoming more severe through attacks on freedom of association and freedom of the press, the opposition is being weakened, and wealth is being concentrated in the hands of a few conglomerates close to Modi.

It is therefore not surprising that some analysts speak of a “facade pluralism”, an “authoritarian tendency”, a descent into a “competitive authoritarian” system or even the death of Indian democracy.

Canada has the most to lose

India and Canada have been negotiating to adopt a comprehensive economic partnership agreement since 2010. An initial hiatus occurred from 2017 to 2022, but the Canadian government's allegations against Delhi in September 2023 put the talks on hold. There is currently no indication that negotiations will resume soon, although India's High Commissioner to Canada, Sanjav Kumar Verma, recently stated in Montreal that he had no concerns about economic relations between the two countries.

It is important to note that Canada has the most to lose if trade with India were to cease. Besides the fact that the value of bilateral trade between the two countries is higher for the Canadian economy, it is the content of imports and exports that is telling.

Historically, the countries of the global South, formerly known as the periphery, sold mainly raw materials, the countries of the “semi-periphery” sold manufactured goods, and the countries of the “centre” sold more industrialized high-tech goods. In the case of India and Canada, the opposite is the case.

Canadian exports to India consist mainly of bitumen from the oil sands, metallurgical coal, lentils and rough diamonds. On the Indian side, three of the top five exports to Canada, along with shrimp and basmati rice, are pharmaceuticals, railway wagons and smartphones. Canada also has more small and medium-sized Canadian companies in India than India has SMEs here.

Although India is Canada's tenth largest economic partner, our country is not even among India's top 25 partners. It trades more with Southeast Asian countries, the European Union, the United States, China, the United Arab Emirates and Saudi Arabia.

However, both countries want to benefit from each other. On the one hand, in order to achieve its economic growth goals, India needs to invest heavily in infrastructure development, which is very attractive for various Canadian industries, such as the timber industry.

On the other hand, India needs to protect its lentil imports, which are essential to feeding its population (Canada supplies lentils when climate threats damage India's crops). In addition, Canada could position itself advantageously as an economic partner in India's energy transition, particularly in the areas of renewable energy such as solar power and clean technologies. From an economic perspective, the strained political relations between the two countries do neither of them any good.

How will Canada position itself after the election?

The Indian market, set to become the world's fourth largest by 2025, represents an economic opportunity for Canada. But can and should we build trade relations with this country while ignoring the state of its democracy? The Canadian government will have to ask itself what kind of relationship it wants to have with India. Ottawa's accusations of Delhi's involvement in the death of Hardeep Singh Nijjar have opened a Pandora's box of questions about what role Delhi can and will play in influencing the Modi government's authoritarian course.

One thing is certain: given the importance of the Indian diaspora in Canada, both Hindu and Sikh, Ottawa will not be able to ignore India's political context.

Since last fall, the number of asylum seekers from India in Canada has risen significantly. The BJP's re-election is likely to exacerbate this trend – if the last decade is any indication – as the majority of asylum applications from India are related to religious persecution. Although this number is marginal compared to the total number of asylum seekers, Canada is taking in more and more of them, showing that the country is beginning to recognize the context of violence in Modi's India.

Since economic relations between the two countries are more important to Canada, it will be difficult for it to impose anything on India, which is increasingly attracting attention from others in developing economic partnerships. However, there are levers in the energy and food sectors.

Canada has a responsibility to have serious talks with India, but needs to think about how it will use bilateral and multilateral channels to influence Modi's party and India's democratic development. It remains to be seen whether Ottawa will position itself as a defender of democracy by challenging who and how it does business with. Finding a diplomatic path to prevent India from sliding into authoritarianism would be a good way to regain our lost diplomatic sheen and present ourselves as a positive leader amid geopolitical turmoil.

This article first appeared on Policy Options and is republished here under a Creative Commons license.