No reason for Canadian pension funds to back out from India: Official

The ongoing diplomatic row between India and Canada is unlikely to have any immediate effect on investment relations between the two countries, a top government official said on Thursday.

The official said that the Canadian pension funds are getting higher returns in India, and they have investments in the Indian infrastructure sector.

"They are here because they are making higher returns here... So I don't see any reason for them to back out because of the current situation, which hopefully we will sort out," the official said.

Those funds can not get such returns anywhere else, the official said, adding "I don't see any impact on Canadian investments into India".

"Don't see any immediate impact on Indian investments into Canada also," the official noted.

The comments come in the backdrop of an intense diplomatic row that erupted following Canadian Prime Minister Justin Trudeau's allegations of a "potential" involvement of Indian agents in the killing of a Khalistani separatist in June. India has rejected the charge as absurd.

India on Thursday "suspended till further notice" its visa services in Canada.

According to a report by think tank GTRI, Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.

The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.

Canadian pension funds will continue investing in India on grounds of India's large market and good return on money invested, GTRI has said.

India received USD 3.64 billion in FDI from Canada between April 2000 and June 2023.