India row: Impact on Canada economy unclear [Video]

The diplomatic row between Canada and India could derail a trading relationship that already underperforms its potential, experts warn.

Relations between the two countries have hit a new low with Canada’s decision to expel New Delhi’s top envoy and five other diplomats on bombshell allegations Monday from the RCMP, who said that Indian government agents have been linked to murder, extortion and coercion in Canada.

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International Trade Minister Mary Ng tried to reassure Canadian businesses, issuing a statement Tuesday acknowledging the “uncertainty” the situation creates for exporters and investors. She said the federal government will continue to support commercial and economic ties between the countries.

But analysts say there is no way the trading relationship between Canada and the world’s fastest-growing economy can escape unscathed from this latest escalation in tensions — at least not …