Canada's economy is much dependent on India and Indian Students coming to the country to pursue higher studies.

Amid tension between the two countries, Canada's economy could be bracing for an economic jolt of $700 million for picking a fight with India, a New Delhi-based independent think tank has revealed in its study.

Imagindia Institute concluded that the Canadian economy will take a hit of $700 million even if a mere 5 per cent drop is recorded in the number of Indian students going to Canada for higher studies in 2024, as reported by WION.

India is the biggest source of foreign students travelling to Canada every year, with annual intake pegged at around 200,000. In 2022, approximately 225,000 Indian students were granted Canadian visas.

According to the study, the average total expense incurred by every Indian student in Canada is $16,000.

The study says that if a five per cent drop (3,300 fewer students) is registered in the January batch, the Canadian economy will be losing at least $230 million.

The study further says that if a similar drop is seen during May and September batches as well, the total loss to Canada will shoot up to $690 million. Lesser visa applications will also amount to lesser visa fees for the Canadian High Commission in India, a loss the study pegs at $3 million.

It must be noted that Indian students also contribute to the Canadian economy by working for local businesses after the completion of their studies. Fewer Indian students visiting Canada might lead to higher wage rates in the country, resulting in a loss of $34 million for small Canadian businesses.

Taking into account these factors, the Canadian economy is expected to suffer a loss of $727 million in total.