India-Canada rift: Industry ready to support India’s stance but seeks alternatives

The escalating diplomatic and political tensions between India and Canada are bound to impact trade and commerce between the two countries but the domestic industry is standing firmly behind the Indian government even as it seeks alternative mechanisms to mitigate the potential loss of business. 

This assumes significance as Canada is an important trade partner with significant investments both in the listed and unlisted space in India. Further, tourism and education travel are also big between the two countries. 

Anirudh Damani, Managing Partner at Artha Venture Fund, believes that India’s resilience and determination to prioritise its national interest is well-documented and the commitment to acting in the nation’s best interests, even amidst external challenges or criticisms, is unyielding. 

“It’s disheartening, then, to observe Canada’s apparent leniency towards extremist factions that target India… This position not only jeopardises Indo-Canadian ties but also puts at risk the economic bond established through avenues like education. To highlight, in 2022, India sent over 220,000 students to Canada, making up 41 per cent of the country’s international student community, symbolizing the depth of our inter-country relationships,” said Damani. 

More importantly, he highlighted the fact that on the entrepreneurial front, Indian start-ups previously saw Canada as an attractive bridge into North America but will now have to evaluate alternatives as well. 

“… given the present circumstances and perceived tacit support for extremist elements, alternate locations like Gift City, Dubai, or even Delaware seem more promising. These hubs offer a sense of security and policy stability that businesses crave,” he added. 

In a similar context, Jyoti Mayal, President, Travel Agents Association of India (TAAI), said that while there is no doubt that the association will support the stand of the Indian government, the policymakers could do well by thinking of ways to safeguard the interest of the industry as well. 

“This needed to be done, especially when the Canadian government was not seen to be following the right protocols in matters that concern India’s security… Ideally, channels of communication must be kept open, and tourism helps in building peace, but such hard decision needs to be taken as the world can’t be allowed to take our interests lightly,” said Mayal. 

Admitting that the travel industry would suffer a huge loss of revenue due to the visa suspension, she said the government must introduce a mechanism to protect the travel and tourism industry in such an event. 

“Of course, this will impact the travel industry negatively and is not going to go down well stakeholders. Since we already have so many tickets booked and we have so many people looking forward to executing their travel plans, the industry is going to lose money. We have, therefore, trying to convince the government to bring in a mechanism to protect us in the eventuality of a natural calamity or geopolitical uncertainty.”