Symbolic photo.

New Delhi:

Amid the growing tension between India and Canada, there has been talk of its impact on trade between the two countries. However, market experts say that this tension is unlikely to affect the investment of prestigious Canadian institutions (Canadian Pension Fund Investments).

Market experts are describing the current diplomatic clash as a "superficial and temporary" setback.

Nirmal Jain, founder of
India Infoline Group, told BQ Prime, "Investors are wise. They know that politics and trade are two different things," he said. There has been a significant flow from Canada and I don't think it will have an impact," he said.

Canadian pension funds such as CPPIB and CDPQ are among the largest institutional investors in Indian companies and projects in sectors such as
energy, infrastructure, banks. According to data from the National Securities Depository Limited (NSDL), financial institutions in the North American country have invested Rs 1.77 lakh crore in the domestic market. About 85% of these investments are in equities only.

Market expert Ajay Bagga says that due to the domestic compulsions of the Canadian government, this action looks more political. "We don't see much of this action spreading, and we don't see any impact on Indian investment," he said.

Canadian Prime Minister Justin Trudeau has alleged the role of "agents associated with the Indian government" in the murder of Canadian citizen and separatist Sikh leader Hardeep Singh Nijjar.

After the expulsion of an Indian diplomat in Canada, India reacted sharply and took a 'as usual' step and expelled a Canadian diplomat. The Indian government has denied these baseless allegations of Canada.