India suspends visa services for Canadians, demands parity in diplomatic staffing as bilateral crisis deepens

India suspended visa applications in Canada on Thursday due to unspecified security threats, while demanding Ottawa reduce its diplomatic staffing in India on grounds of interference in domestic affairs in an escalation of the festering diplomatic crisis between the two countries.

The feud was sparked Monday by the Canadian government's announcement of "credible allegations" the Indian government orchestrated the extra-judicial slaying of a Sikh separatist in Canada. New Delhi had slammed Canadian Prime Minister Justin Trudeau's claims as "baseless" and "absurd" and accused Ottawa of being sympathetic to anti-India causes.

"The issue is not about travel to India — those who have valid visas and other kinds of document like OCI are free to travel to India — but the issue is the incitement of violence and the creation of an environment that disrupts the functioning of our high commission and consulates," Arindam Bagchi, the official spokesperson for India's Ministry of External Affairs, said at a regular news conference in New Delhi on Thursday.

OCI is short for Overseas Citizenship of India, a form of permanent residence for people of Indian origin that grants a lifetime of entry into the country, along with some benefits. 

The move will curtail Indian travel for Canadians and follows a travel advisory urging Indian nationals to "exercise utmost caution" while traveling in Canada and a reciprocal expulsion of senior diplomats. 

"We have seen Canadian diplomatic interference in our internal affairs, that's a factor that's been taken into account in seeking parity in strength and rank equivalence ... in our mutual diplomatic presence," Bagchi added, without elaborating. "Their numbers here are very much higher than ours in Canada. The details are being worked out."

Bagchi's announcement came hours after the Canadian High Commission in New Delhi said it would "temporarily adjust staff presence" in the country after some of its diplomats received threats on social media platforms.

Global Affairs Canada, the country's foreign affairs ministry, was not able to respond immediately to an email request for comment.

Thursday's developments represent a significant escalation in tensions between India and Canada as New Delhi pressed its case.

The Canadian government is investigating allegations that Indian government agents may be connected to the murder of Hardeep Singh Nijjar, a naturalized Canadian and prominent advocate for an independent Sikh homeland known as Khalistan.

"No specific information has been shared by Canada on this case," Bagchi said. "We have conveyed to the Canadian side, made it clear to them that we are willing to look at any specific information provided to us, but so far we haven't received any specific information."

Canada is home to the largest Sikh population outside of the northern Indian state of Punjab.

Sikh separatist Nijjar was reportedly helping to organize an unofficial global referendum among the Sikh diaspora when he was killed on June 18 by two masked gunmen in the parking lot of the Guru Nanak Sikh Gurdwara, the Sikh temple in Surrey, British Columbia, where he was president.

New Delhi had labeled him a terrorist in 2020, accusing him of plotting multiple targeted murders through the years, charges that Nijjar had denied. He had settled in suburban Vancouver and ran a plumbing business after apparently first migrating from India in the 1990s and gaining citizenship in March 2015.

"From our side, very specific information about criminal activities by individuals based on Canadian soil have been shared to the Canadian authorities on a regular basis, but not been acted upon," Bagchi said.

"There is a degree of prejudice here. They have made the allegations, they have taken action on them. To us, it appears the actions of the government of Canada are politically driven," Bagchi added, without elaborating.

While Canada views peaceful Sikh activism as part of free expression, India views Canada's continued tolerance as an endorsement of Sikh separatism that it regards as an infringement on its domestic affairs.

Under the leadership of the Congress Party, India eventually crushed the bloody insurgency that shook the country in the 1970s and 1980s when the minority Sikhs agitated for an independent Sikh homeland in Punjab, claiming thousands of lives in the process. Sikh bodyguards were convicted of the 1984 assassination of then-Prime Minister Indira Gandhi.

Given the memories of the past, there are fears of a revival in the Sikh separatist movement, which has deep roots since India gained independence in the late 1940s.

Indian Foreign Minister Subrahmanyam Jaishankar had on June 8 condemned online video footage of a parade float in the Canadian city of Brampton that glorified violence and vengeance in its depiction of the assassination of Indira Gandhi.

"That Canadian political figures have openly expressed sympathy for such elements remains a matter of deep concern," India's Foreign Ministry said in a separate statement Tuesday. "The space given in Canada to a range of illegal activities including murders, human trafficking and organized crime is not new."

This issue is also flaring up at a time when the Indian government, led by Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party, has been accused of marginalizing minorities in the country.

The deepening rift between India and Canada is concerning Ottawa's closest allies — Australia, the United Kingdom and the United States. If allegations are true, this may well derail the U.S. courtship of India as a partner in a broader Indo-Pacific strategy aimed at countering China.

The unexpected consensus at the G20 leaders' summit, along with Modi co-fronting the launch of U.S. President Joe Biden's global infrastructure initiative in New Delhi, underscore the growing partnership between India and the U.S.

As it stands, Canada halted trade talks with India ahead of the recent Group of 20 nations leaders' summit in New Delhi, where Trudeau said he raised the issue of Nijjar's murder with his Indian counterpart.

In a banner year for Indian diplomacy that also saw the world's most populous nation take on the rotating presidency of the Shanghai Cooperation Organization, Modi took the opportunity to turn the normally sedate G20 presidency into a branding vehicle to burnish India as a key global player advocating the interests of the Global South, while serving as an interlocutor with the developed nations.

"Look, if there's any country — if you are looking about reputational issues and reputational damage — if there's any country that needs to look at this, it's Canada and its growing reputation as a place, a safe haven for terrorists and organized crime," Bagchi said.

— CNBC's Naman Tandon contributed to this article.