India on Thursday suspended visa services for Canadian citizens, a foreign ministry spokesperson said, citing security threats to its staff in its consulates in Canada.

The announcement came hours after Canada’s high commission in India said it would temporarily “adjust” staff presence in the country after some diplomats received threats on social media platforms.

The steps mark further escalation of tensions between the two countries set off by Canada’s announcement that it was “actively pursuing credible allegations” linking Indian government agents to the murder of a Sikh separatist leader in June.

“The security situation because of Canadian government’s inaction has resulted in disruptions and we have suspended visa applications,” Arindam Bagchi, told reporters in New Delhi, adding that all categories of visas, including e-visas are suspended.

BLS International(BLSN.NS), an Indian company offering visa facilities, said the notice from the Indian mission in Canada cited “operational reasons” for suspension of visa services “till further notice”.

Prime Minister Narendra Modi’s government categorically denied any links to the alleged murder.

With both nations expelling a diplomat each, analysts said relations between the two countries have touched the lowest point.

“In light of the current environment where tensions have heightened, we are taking action to ensure the safety of our diplomats,” the Canadian high commission said in a statement.

“With some diplomats having received threats on various social media platforms, Global Affairs Canada is assessing its staff complement in India,” it said, referring to the department which manages Ottawa’s diplomatic and consular relations.

“As a result, and out of an abundance of caution, we have decided to temporarily adjust staff presence in India,” it said, without elaborating on what it meant by that adjustment.

After the expulsions of senior diplomats, the two countries issued tit-for-tat travel advisories on Tuesday and Wednesday, with India urging its nationals in Canada, especially students, to exercise “utmost caution”.

Threat to trade ties

The tensions flared up on Monday after Canadian Prime Minister Justin Trudeau said Ottawa was investigating “credible allegations” about the potential involvement of Indian government agents in the murder of Hardeep Singh Nijjar in British Columbia.

Canadian officials have so far declined to say why they believe India could be linked to Nijjar’s murder.

New Delhi has also not provided evidence leading to its travel advisory that refers to “growing anti-India activities and politically condoned hate crimes and criminal violence in Canada”.

Canada is a safe country, its public safety minister Dominic LeBlanc said hours after India’s advisory.

Canada has the largest population of Sikhs outside the Indian state of Punjab, with about 770,000 people reporting Sikhism as their religion in the 2021 census.

The spat is also threatening trade ties, with talks on a proposed trade deal frozen last week.

Canada is India’s 17th largest foreign investor, while Canadian portfolio investors have invested billions of dollars in Indian financial markets.

Since 2018, India has been the largest source country for international students in Canada.

In 2022, their number rose 47% to nearly 320,000, accounting for about 40% of total overseas students, the Canadian Bureau of International Education says, which also helps universities and colleges provide a subsidised education to domestic students.

Industry estimates show the Comprehensive Economic Partnership Agreement (CEPA) between Canada and India could boost two-way trade by as much as $6.5 billion.