By Krishn Kaushik and Steve Scherer
NEW DELHI/OTTAWA (Reuters) - Mending frayed diplomatic relations between India and Canada will be a long process after each side adopted maximalist positions, despite New Delhi's surprise move to ease some visa curbs on Canadians, officials and experts say.
India recently decided to partially restore visa services, weeks after suspending them in anger at Ottawa's claim that Indian agents may have been involved in the murder of a Canadian Sikh separatist leader from Punjab state.
Mutual recriminations since that accusation, which India strongly denies, have strained ties between the two countries - close for almost a century and with extensive links through the Sikh diaspora - to their worst in memory.
And while India's relaxation on visas may have raised some expectations of improved relations, it was not a breakthrough, as neither side has much incentive to hasten a return to normalcy, officials and experts in both countries said.
Neither New Delhi nor Ottawa looks likely to take dramatic steps to reconcile soon as Canada's murder investigation proceeds and Prime Minister Narendra Modi prepares for Indian national elections by May.
"The relationship is in deep crisis, perhaps its worst ever," said Michael Kugelman, director of the South Asia Institute at the Wilson Center in Washington. "Each side may have a strong interest in the crisis not getting completely out of control, but that doesn't mean there are strong incentives to resolve the crisis."
Ajay Bisaria, India's ambassador to Canada from 2020 to 2022, said the relationship is in a "de-escalation phase" following "quiet diplomacy".
Even with the reprieve, the visa curbs are expected to hinder the movement of tens of thousands of Indians and people of Indian origin who live in Canada or plan to study there.
Although both governments have spared business and trade links, the acrimony has delayed discussions on a free-trade deal and threatens Group of Seven member Canada's Indo-Pacific plans, where New Delhi is critical to efforts to check an increasingly assertive China.
'DIFFICULT MOMENT'
On Sept. 18 Prime Minister Justin Trudeau said Canada was "actively pursuing credible allegations" linking Indian government agents to the June killing in a Vancouver suburb of Hardeep Singh Nijjar, 45, who had advocated the fringe position seeking to carve an independent Sikh homeland of Khalistan out of India.
Canada expelled India's intelligence chief in Ottawa. India quickly responded by halting 13 categories of visas for Canadians and cutting Canada's diplomatic presence in India, a move Ottawa said violated the Vienna Conventions.
Then on Oct. 25, New Delhi said it would resume issuing visas under four categories, a measure Indian officials said aims to help people of Indian origin travel to India during the wedding season beginning this month.
"This is not a thaw," an Indian foreign ministry official told Reuters. "People can read whatever they want into it."
Ottawa triggered the crisis and must take the first step towards climbing down from its position, another official said.
A senior Canadian government source said that while Ottawa’s ultimate goal was to return to where things were, unpredictability in coming months over the murder investigation and trial, as well as India's elections, could interfere.
"This is a difficult moment, but Canada is not abandoning its Indo-Pacific strategy," the source said.
'MODEST DE-ESCALATION'
Officials in India and Canada spoke on condition of anonymity as they were not authorised to speak on the subject.
The Indian foreign ministry did not respond to a request for comment. Canada's foreign ministry pointed to comments made by Foreign Minister Melanie Jolie on Oct. 30.
"We have a long-term approach when it comes to India because this is a relationship that has spanned decades, and we all know that we have very strong people-to-people ties with the country," Jolie said, adding she continued to talk to her Indian counterpart.
Canada has the largest Sikh population outside Punjab, with 770,000 people reporting Sikhism as their religion in the 2021 census. India is by far Canada's largest source of foreign students, accounting for 40% of study permit holders - a vital source for Canada's fast-growing international education business, contributing over C$20 billion ($15 billion) to the economy annually.
India-Canada tensions over Sikh separatism have haunted the relationship since the 1980s. Modi, who heads a Hindu-nationalist party and cultivates a strongman image, is unlikely to be seen backing down, especially before the elections.
Despite the "modest de-escalation" over visas, Kugelman said most of the retaliatory measures remain "and there's still a lot of anger on both sides. So we shouldn't overstate the de-escalatory potential here".
Michael Bociurkiw, a foreign policy expert at the Atlantic Council, said "a pause" was needed "for cooler heads to prevail and to get the relationship back on track".
"But it is not going to happen overnight. It will take time."