The diplomatic row between India and Canada over the killing of a Sikh leader in British Columbia will not affect the flow of Canadian investments into India, according to experts. “The India-Canada relationship is based on mutual benefits. The investment will not come at risk immediately,” said Pratim Ranjan Bose, an independent researcher and consultant.

The bilateral relations between the two allies hit a rough patch after Canadian PM Justin Trudeau alleged India’s involvement in the killing of pro-Khalistani leader Hardeep Singh Nijjar, which was followed by the expulsion of diplomats by both nations.

Canada is the 17th largest foreign investor in India, with an overall investment of about $3,306 million from April 2000 to March 2023, according to Invest India. Furthermore, during the same period, Canadian investment represented about 0.5 per cent of the total FDI (foreign direct investment) inflows into the country.

While India was Canada’s ninth-largest trading partner in 2022. Services and infrastructure together accounted for 40.63 per cent of the total FDI investments from Canada to India. More than 600 Canadian companies have a presence in India, and more than 1,000 companies are actively pursuing business in the Indian market.

Bose added that the crisis cannot go on for long as it will be detrimental to the economy and will be solved through proper diplomatic channels. The negotiations between India and Canada for a free trade agreement, which recently resumed after a decade, have come to a halt due to political differences.

Canadian pension funds

The Canadian Pension Plan Investment Board (CPPIB) has investments worth over ₹1 lakh crore across sectors including real estate, energy, healthcare, IT, and others. CPPIB disclosed that it had investments of over $21 billion in India about a year ago, which are the latest publicly available numbers.

The Sovereign Wealth Fund Institute (SWFI), a forum of investors, including sovereign wealth funds, pensions, and others, noted that trade relations between the two nations won’t change immediately.

“CPPIB, though owned by the government, is managed by an independent board and a team of professionals whose primary focus is to ensure stakeholder benefits,” said Lakshmi Narayanan, Chairman, SWFI.

The CPPIB, amongst others, holds a 6 per cent stake in Delhivery, a 2.68 per cent stake in Kotak Mahindra Bank, a 2.42 per cent stake in Zomato, and a 2.18 per cent stake in IndusTower, according to BSE filings as of June quarter. The fund also held a stake of 1.76 per cent in Paytm and a stake of 1.47 per cent in Nykaa.

Besides, it also holds a stake in some of those Indian firms that are listed overseas. It has a stake in Wipro’s US-listed shares and the US-listed shares of Infosys and ICICI Bank, apart from several unlisted entities.