Canada will be able to process only half of the expected number of visa applications from India between now and the end of the year due to the diplomatic spat between the two countries.

Immigration Minister Marc Miller told a hearing on Tuesday that India’s decision to expel Canadian diplomatic staff means only five people are left to process applications in the country.

It means that only 20,000 of the expected 38,000 visa applications will be processed through to the end of December.

While some of the capacity can be picked up by Canada’s global processing network, “there are some things we have to be on the ground for”, Miller said.

The problem arose when Prime Minister Justin Trudeau angered India by accusing it of killing of a Canadian Sikh in Vancouver in June. Hardeep Singh Nijjar, a Khalistan activist, was a designated terrorist in India.

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“I understand and appreciate that our relationship with India can create some fear about what your status is in Canada, whether you’re a student, permanent resident or Canadian citizen,” Miller told the Citizenship and Immigration Committee hearing on Tuesday.

“My job as immigration minister is to make sure that people feel safe in a country that is there to protect them, especially against a foreign power. That is our primary responsibility.”

Miller went on to describe the problem as a “really unfortunate diplomatic issue” and said the Canadian government was “standing up for its principles”.

“I am not an expert on the government of India but we know the measure that it took that we believe breach international law in making Canada reduce its capacity to operate in India,” Miller said.

India Resumes Some Visa Services

Meanwhile, India will partially resume visa services to Canadians from today after suspending them over a diplomatic spat.

Visa services for entry, business, medical and conferences will resume, the Indian high commission in Ottawa announced.

Services were suspended on September 21 after Prime Minister Justin Trudeau accused Indian agents of killing of a Canadian Sikh in Vancouver in June. Hardeep Singh Nijjar, a Khalistan activist, was a designated terrorist in India.

As Indo-Canadian diplomatic ties continue eroding into the second month of their international dispute, business groups postulated that companies are getting caught in the crossfire.

“It’s a very big shock and setback for the business community because this kind of episode creates a lot of uncertainty about what’s going to happen next,” said Satish Thakkar, chair of the Canada India Foundation.

Prior to the public declaration by Trudeau, reports Chris Hannay of the Globe and Mail, Ottawa cancelled a trade mission and suspended trade talks, which business groups had expected would at least produce an interim free-trade deal by the end of 2023.

Since then, business groups have entered increased stages of uncertainty as the crisis deepens.

“Business wants clarity, stability and predictability, and those three things have not been there,” said president of the Canada India Business Council, Victor Thomas.

“In many ways, we’re still trying to figure out how we navigate this new period of time.”

Roughly half of India’s lentil imports, for example, come from Canada. As diplomatic tensions rise, so does the uncertainty surrounding the grain’s supply and prices in India.

India is Canada’s eighth-largest trading partner, with Ottawa generating $5.6 billion in exports (primarily in resource extraction or agriculture) to the country in 2022. This is a fraction of what Canada sends to the US or China.

The Canadian economy is also largely dependent on Delhi through the Indian diaspora, 1.3 million members of which identify themselves as Canadian in the 2021 census.

The tech industry in Canada may suffer too.

“There’s a lot of tech industry in Canada that relies on support from India,” says Dalhousie University professor Robert Huish.

“There’s likely going to be tensions that come up in that way too, so we can probably say that in Canada there will be fewer business dealings with India going forward.”

India’s suspension of visa services is of particular concern, according to Matthew Holmes, senior vice-president of government relations and policy at the Canadian Chamber of Commerce.

“For service-intensive industries, such as IT, that are also based on talent, this may become an acute concern before long,” Mr. Holmes said.

International Students Also Have Cause for Concern

If the visa-processing issue continues, said Holmes, it could affect Canada’s push towards attracting international students.

With around 40 percent of its 800,000 international students coming from India, the use of international students as a labor source for local businesses may suffer.

“Will Canada be the top destination to send someone next fall?” Mr. Thomas said. “Do they continue to come back when they’re looking at options beyond that?”

It was reported late last month by the ICEF Monitor that Canadian educational institutions are bracing themselves for a possible decline in the number of Indian students coming to Canada.

Travel might be hampered the other way too.

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Professors at Dalhousie University, Halifax, for example, say that the pause will disrupt travel, especially before Diwali.

“There is of course a problem for those Canadians who are seeking to travel in the next couple of months,” says Nissim Mannathukkaren. “That’s an issue because if the visa services are suspended they will not be able to travel if they have booked tickets.”

“There’s a lot of families with connections from across Canada to India and now their ability to travel back to India is completely on hold unless they have Indian citizenship,” explains Huish.

Indian Students Granted Post-Graduation Work Permit Upon Matriculation

Canada has been an attractive destination for Indian students due to its Post-Graduation Work Permit program, wherein foreign students may apply for an open work permit upon graduation. This is issued for the same length of time as the length of the student’s study program, up to a maximum of three years.

The work experience thus gained can contribute towards one’s permanent residence application through the Canada Express Entry system.