Explained: Canada's Terror Tag on 2 Khalistani Outfits—and India Relations

In a first, Canada revealed that 2 Khalistan groups raise funds from its soil to carry out violent activities.

The Canadian government stated that two Khalistan groups, the Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF), are "terrorist organisations" which raise funds from Canadian soil.

(Photo: Kamran Akhter/The Quint) 

In a first, the Canadian government has acknowledged that certain pro-Khalistan groups have been receiving financial support from within Canada to carry out acts of 'politically motivated violent extremism'. In doing so, the government labelled the Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF) as "terrorist organisations" which raise funds from Canadian soil.

"The fact that the Canadian government has identified two Khalistan groups as terror outfits is significant, but one needs to keep in mind that there are nuances in this development," says Reeta Tremblay, a political scientist based in Canada.

So, what are these nuances? Beyond the symbolism, what are going to be its practical ramifications when it comes to Ottawa's ties with New Delhi, which has time and again called for action against pro-Khalistan groups in Canada? Also, what makes these two particular outfits stand out from the rest?

The Quint explains in detail.

What Has the Canadian Govt Said About the 2 Outfits? 

In a detailed report released in August, Canada's Department of Finance stated that the BKI and the ISYF encourage the use of violence to pursue its objectives, which include the establishment of a separate Khalistan state for Sikhs outside the territory of India. What's even more significant is that these groups have been named alongside outfits such as Hamas and Hezbollah.

The report, titled 'The 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada', states:

"Several terrorist entities listed under the Criminal Code in Canada that fall under the PMVE [politically motivated violent extremism] category, such as Hamas, Hezbollah, and the Khalistani violent extremist groups Babbar Khalsa International and the International Sikh Youth Federation, have been observed by law enforcement and intelligence agencies to receive financial support originating from Canada."

It further states that while these groups previously had extensive fundraising networks in Canada, they now appear to consist of smaller pockets of individuals "with allegiance to the cause", but seemingly no particular affiliation to a specific group.

The report adds that these groups have been known to misuse non-profit organisations to raise and move funds, which they solicited via donations from diaspora groups.

Will Canada's Security Forces Take Action Against the 2 Outfits? 

The publication of the report has raised speculations about whether any action, legal or financial, will be taken against members of the BKI and the ISYF.

To find out more, The Quint reached out to Canada's Ministry of Public Safety—the equivalent of the Union Home Ministry in India.

While they said Canada's law enforcement agencies continuously monitor threats and implement measures to address them, they added that the listing of a new entity as a terrorist group under the Criminal Code requires that certain explicit criteria be met.

"An entity may be added if there are reasonable grounds to believe that it has knowingly carried out, attempted to carry out, participated in, or facilitated a terrorist activity, or has knowingly acted on behalf of, at the direction of, or in association with a listed terrorist entity," Noémie Allard, spokesperson of the Ministry of Public Safety, told The Quint.

"The decision to list an entity results from a rigorous process based on evidence, intelligence, and the law," she added.

Once an entity is listed and considered a 'terrorist group', Allard said, the Criminal Code prohibits certain actions related to them, including those related to financing, travel, and recruitment.

"A listed entity may have its assets seized, frozen, or forfeited. Furthermore, financial institutions—such as banks or brokerage firms—are required to report on the assets of a listed entity and to prevent the entity from accessing its assets. They are also prohibited from dealing with or disposing of such assets in any way."

Noémie Allard

Similarly, the Royal Canadian Mounted Police (RCMP), the country's national police force, said that it will consider all legal avenues to obtain evidence when illegal activity is detected or reported.

Having said that, however, the force's media relations officer Camille Boily-Lavoie told The Quint:

"While membership in a terrorist group, in and of itself, is not a criminal offence, any person who knowingly participates in certain activities of a terrorist group, which includes a listed entity, may be charged under the Criminal Code."

Boily-Lavoie further said that the RCMP will not confirm, deny or release information relating to potential criminal investigations until charges are laid.

What Does This Mean for India-Canada Ties? 

The Indian government is sure to have been viewing these developments closely, having raised the issue of pro-Khalistan extremism and Canada's alleged reluctance to act against organisations from its soil which downplay India's sovereignty and integrity.

In fact, both the outfits mentioned by the Canadian government's report have been included in India's list of "terrorist organisations" under the Unlawful Activities (Prevention) Act. Chronologically, the BKI is at No. 1 on the list and the ISYF at No. 4.

However, the Ministry of External Affairs (MEA) has so far not reacted to the news, indicating that New Delhi is in 'wait and watch' mode to see whether the Canadian government's implication of the two outfits will actually translate into any action.

The bitterness in India-Canda ties was at its peak following former Prime Minister Justin Trudeau's public accusation against the Indian government of having allegedly carried out the assassination of Sikh extremist Hardeep Singh Nijjar on Canadian soil in 2023.

However, after Trudeau was replaced by his Liberal Party colleague Mark Carney in the top post, there has been a reset in India-Canada ties. The appointment of high commissioners and other top diplomats to each others' countries after a gap of 10 months is a testament to this reset.

Experts suggest that the Canadian Department of Finance's recent reports implicating the BKI and the ISYF are further steps in that direction.

"The Carney government is adopting a different approach as compared to Trudeau," says political scientist Tremblay while speaking to The Quint.

"Instead of treating the Sikh diaspora as a homogenous group, it is differentiating between those who, on the one hand, are involved in violent extremists’ activities and use Canada as a base for fund-raising or planning secessionist activities, and the others who participate in peaceful protests regarding the Khalistan cause."

Reeta Tremblay

Tremblay adds that while the report indicates a tougher stance against violent activities, it is also a recognition that the Indo-Canadian diaspora, like any other diasporic group, "functions in multiple ways and thus requires a thoughtful strategy to manage it".

"There is a long history of mutual distrust between the two countries, starting with Canada feeling betrayed by India detonating a nuclear device with Canadian materials and India’s grave concerns over the Canadian mishandling of the 1985 Air Indian bombing and the Khalistan movement. Moreover, for Canada, the transnational repression concerns hang in the background – the Nijjar issue is not going to disappear. Given the challenging nature of these concerns, both countries have prudently adopted a step-by-step approach to reset their relations."

Reeta Tremblay

As The Quint had explained elaborately in this article, Trudeau's hands were tied by coalition compulsions as he had signed a 'supply-and-confidence' agreement in March 2022 with Jagmeet Singh, a leader of the New Democratic Party (NDP), until he lost his seat in the 2025 election. During the 2.5-year alliance between Trudeau and Singh, many had speculated that the former was "arm-twisted" into taking a pro-Khalistan and anti-India stance on a number of issues.

However, the Carney government with its 169 seats in the 343-member House, is better poised to govern than Trudeau and hasn't been dependent on outside support, least of all the NDP, which were decimated in the election with only seven seats won as compared to 24 in the previous polls.

Despite the reset seemingly afoot in India-Canada ties, several other experts, however, watered down the revelations made in the recent report against the BKI and the ISYF.

"The government has been challenged on many fronts regarding the thoroughness with which it has been implementing Canadian legislation and regulations against money laundering," Roy Norton, Fellow at the Balsillie School of International Affairs in Ontario, tells The Quint.

"The Canadian Finance Department report attempts to more comprehensively state the problem than was the case in the past. Any attempt at being comprehensive would result in references to the BKI and the ISYF."

Roy Norton

However, even he states that the report indicates a different style of functioning by the Carney government as compared to Trudeau.

"Prime Minister Carney is widely perceived as being more deliberate and realistic than his predecessor," Norton says.

What Are the BKI and the ISYF?

Meanwhile, there has been a lot of curiosity about what the BKI and the ISYF are, and why they have been included in the Canadian government's list while some other controversial organisations have not.

According to the South Asia Terrorism Portal, the BKI is among the oldest and most organised pro-Khalistan groups that remained afloat even after the Khalistan movement was effectively defeated in India in the 1990s.

The BKI traces its origin to the Babbar Akali Movement of 1920 and is believed to have assumed its present form after the 1978 Baisakhi clashes between the Akhand Kirtani Jatha and breakaway Nirankaris—two prominent Sikh groups.

The first overseas unit of the BKI was founded in Canada in 1981 under the leadership of the late Talwinder Singh Parmar. The group was blamed for the 1985 bombing of Air India Flight 182—also known as the 'Kanishka Bombing'—which resulted in 329 casualties.

The outfit has been banned by India, the US, UK, EU, Japan, Malaysia, Australia, and Canada. According to the Canadian Ministry of Public Safety, the BKI's activities include armed attacks, assassinations, and bombings. The group is currently headed by Wadhawa Singh Babbar, who is believed to be residing in Pakistan's Lahore.

The ISYF, on the other hand, was founded after Operation Blue Star in the UK in 1984 by Amrik Singh and Jasbir Singh Rode, a nephew of Jarnail Singh Bhindranwale, a controversial Sikh leader.

The organisation split soon after its formation—one owing allegiance to Jasbir Singh Rode and his elder brother Lakhbir Singh Rode—and the other led by Satinderpal Singh Gill.

According to the South Asia Terrorism Portal, Lakhbir Singh Rode headed the ISYF from Lahore until his death in 2023. He was among the most wanted terrorists in India whose extradition had been sought repeatedly from Pakistan.

At its peak, the ISYF was involved in murders, bomb blasts, and abductions. In 1997, two associates of Lakhbir Singh Rode who had allegedly been sent by him to assassinate Prakash Singh Badal, the then chief minister of Punjab, were arrested near the India-Pakistan border, according to the South Asia Terrorism Portal.

The ISYF has been banned by India, Japan, the US, and Canada. While the British government had also banned it in 2001, they lifted the ban in 2016 following a motion upheld by both Houses of Parliament.

(The Quint has reached out to the Ministry of External Affairs. This article will be updated as and when they respond.)