Canada’s consideration of a Comprehensive Economic Partnership Agreement (CEPA) with India is often framed as a pragmatic step toward trade diversification and economic growth. Yet this narrow economic framing ignores an uncomfortable and unavoidable reality: trade policy does not operate in a political or security vacuum. In the case of India, serious allegations of transnational repression and political interference on Canadian soil raise fundamental questions about whether deeper economic engagement serves Canada’s long-term national interests—or undermines them.

At the center of this dilemma lies the unresolved 2023 diplomatic crisis following the killing of Sikh activist Hardeep Singh Nijjar in British Columbia. Canada’s public assertion that Indian state-linked actors were involved marked an unprecedented rupture in bilateral relations. While investigations are ongoing, the gravity of the allegation itself has already reshaped the strategic landscape. It suggests that a foreign government may have extended coercive and violent state behavior beyond its borders, violating Canada’s sovereignty and the norms of international conduct.

This issue cannot be treated as an isolated diplomatic disagreement. It fits into a broader and increasingly documented pattern of alleged Indian transnational repression (TNR), particularly targeting diaspora communities critical of New Delhi. Reports of surveillance, intimidation, threats, and pressure tactics against Sikh activists in several Western countries have triggered alarm among human rights organizations and security agencies alike. For Canada—home to one of the world’s largest Sikh diasporas—these concerns are not abstract or distant. They are domestic, immediate, and deeply political.

Against this backdrop, advancing CEPA without addressing these realities risks sending the wrong signal. Trade agreements are not merely economic instruments; they institutionalize access, mobility, and influence. Expanded trade and investment flows, business visas, corporate partnerships, and regulatory cooperation can inadvertently create new pathways for foreign interference if safeguards are weak or absent. Economic integration, far from being neutral, can amplify a state’s reach and legitimacy in ways that extend well beyond commerce.

Canada’s Sikh community has repeatedly warned of this danger. Their opposition to a rushed or unconditional CEPA is rooted in lived experience—claims of being monitored, harassed, or pressured by networks allegedly linked to Indian state interests. Ignoring these warnings in pursuit of market access would effectively normalize repression as an acceptable cost of doing business. It would also erode trust between the Canadian state and communities it has a responsibility to protect.

Some argue that economic engagement can moderate state behavior and stabilize bilateral relations. But history suggests that engagement without accountability often produces the opposite effect. When states accused of coercive behavior face no meaningful consequences, economic rewards can be interpreted as validation rather than restraint. In such cases, trade becomes leverage for the stronger party, not a tool for mutual norms-building.

This is precisely why Global Affairs Canada’s decision to initiate public consultations on CEPA is so critical. These consultations are not a bureaucratic formality; they are a strategic necessity. Trade agreements of this scale shape domestic policy, foreign relations, and national security for decades. Input from provinces, labor unions, civil society, Indigenous groups, human rights advocates, and affected diaspora communities must meaningfully inform Canada’s negotiating posture.

Transparency and domestic consensus are essential. Without them, CEPA risks becoming a conduit for political interference rather than a driver of shared prosperity. Any future agreement must include enforceable safeguards—robust transparency requirements, clear dispute-resolution mechanisms, and provisions addressing foreign interference and misuse of economic access. Without such protections, Canada would be importing strategic vulnerabilities alongside economic opportunities.

Trade diversification remains an important objective, particularly in an era of geopolitical fragmentation and economic uncertainty. Canada is right to seek broader markets and reduce overreliance on any single partner. But diversification should strengthen national resilience, not dilute it. Economic partnerships that compromise sovereignty, rule of law, or democratic norms ultimately weaken the very foundations of sustainable growth.

There is also a reputational dimension Canada cannot afford to ignore. Ottawa has positioned itself internationally as a defender of human rights, democratic governance, and a rules-based international order. Proceeding with CEPA while allegations of extraterritorial repression remain unresolved would undermine that credibility. It would signal that principles are negotiable when commercial interests are at stake—an impression that adversarial actors are quick to exploit. This does not mean Canada must permanently disengage from India. Rather, it means engagement must be conditional, principled, and strategically informed.

Canada stands at a crossroads. It can pursue trade policy as a purely transactional exercise, or it can recognize that economics, security, and democracy are inseparable in today’s geopolitical environment. A CEPA that ignores transnational repression is not a partnership grounded in mutual respect—it is a gamble with Canada’s sovereignty. Before signing on the dotted line, Ottawa must ensure that economic ambition does not eclipse democratic responsibility.