With Canadian Prime Minister Justin Trudeau’s explosive allegation of a “potential link” between agents of the Government of India and the killing of a pro-Khalistan leader and Canadian citizen, Hardeep Singh Nijjar, New Delhi is facing an unprecedented diplomatic challenge. The Khalistan issue has always plagued bilateral ties, from the 1980s to the last eight years of Trudeau’s term. But this time, Ottawa has ratcheted up the ante and New Delhi is watching the situation keeping in mind the complexity of the bilateral ties and the reputational cost on the global stage. There are broadly two aspects that will shape the next steps. The first is the diplomatic fallout on India-Canada bilateral relations already strained but with layers of robust continuity. Canada hosts one of the largest Indian diasporas in the world, numbering 16 lakh people of Indian origin, accounting for more than 3 percent of the total Canadian population and 700,000 NRIs. India became the top source of foreign students studying in Canada — 2.3 lakh, according to 2022 data. India’s total trade with Canada (goods and services) in 2021-22 was US $11.68 billion, much below potential, but when it comes to India’s import of pulses, almost 30% of the total import comes from Canada. Canadian pension funds have cumulatively invested around US $55 billion in India. Cumulative FDI from Canada since 2000 is about US$4.07 billion. All these have continued despite speed bumps like the recent pause in trade talks — and despite challenges over the Khalistan issue. But a diplomatic escalation of this kind could potentially damage some of the structured and organic exchanges between the two sides. Officials will look at ways to insulate this. The second aspect, and a more important one, is the reputation cost that a charge of this kind can inflict on India days after the success of the G20 summit. Trudeau has asked India to co-operate in the probe. The Indian statement is silent on this, signal that India is not willing to play ball at this point. Significantly, Canada has not shared any details of the evidence it has indicating that it will do so “in due course”. As New Delhi waits for this, it is very much aware that Canada — one of the G7 countries — is part of the Five Eyes Alliance: an intelligence-sharing grouping of US, UK, Canada, Australia and New Zealand. If Ottawa shares the information on Nijjar’s killing with its Five Eyes partners, the credibility of the evidence will be tested. So far, Trudeau has chosen to sound out US President Joe Biden and British Prime Minister Rishi Sunak — both Five Eyes partners. But all these countries — US, UK and Australia especially - are India’s close strategic partners as well. Incidentally, another common strand is that these countries have also witnessed pro-Khalistan groups operating from their soil — sometimes resorting to vandalism against Indian embassies and inciting violence against Indian diplomats. So far, their responses to Trudeau’s allegation have been measured. In Washington, White House National Security Council spokesperson Adrienne Watson was quoted by AP saying, “We are deeply concerned about the allegations referenced by Prime Minister Trudeau. We remain in regular contact with our Canadian partners. It is critical that Canada's investigation proceed and the perpetrators be brought to justice.” A UK Government spokesperson, when contacted by The Indian Express, said, “We are in close touch with our Canadian partners about these serious allegations. It would be inappropriate to comment further during the ongoing investigation by the Canadian authorities.” Rishi Sunak’s spokesperson was quoted by Reuters as saying that Trudeau’s remarks didn’t get in the way of India-UK trade talks. A spokesperson for Australian Foreign Minister Penny Wong said, “Australia is deeply concerned by these allegations and notes ongoing investigations into this matter. We are closely engaged with partners on developments. We have conveyed our concerns at senior levels to India." While none of these countries would wish any Canadian blowback to their ties with India, it puts them in a spot as they would also not want to get drawn into a condemnation of ally New Delhi. South Block sources feel that the response from these strategic partners will depend on the “quality of evidence” presented to them and possibly shared with India. With Trudeau going to New York, and Foreign Minister Melanie Joly meeting her G7 counterparts on the sidelines of the UNGA, all eyes will be on this. External Affairs Minister S Jaishankar is also headed to New York and that could emerge to be the next place for the two sides to gauge the response of the world on these allegations. India will also be looking at the kind of information Trudeau shares with the political leadership in Canada. Already his arch rival, Conservative Leader Pierre Poilievre — who earlier said Canadian citizens "must be safe from extrajudicial killings” and called on the Indian government to act with utmost transparency as authorities investigate this murder — has said that Trudeau needs to release more information about how he reached his conclusions linking India to the killing of Nijjar. Speaking to the media in Ottawa, he said that Trudeau didn’t tell him much more in private than he said in Parliament. Later in the day, Trudeau sought to qualify his allegations, as he said that Canada is not trying to provoke India by suggesting it was linked to the murder of a Sikh separatist leader, but wants New Delhi to address the issue properly. Trudeau told reporters that the case had far-reaching consequences in international law. "The government of India needs to take this matter with the utmost seriousness. We are doing that; we are not looking to provoke or escalate," he said.