Mr Justin Trudeau has said that Canada was looking at “credible allegations potentially linking” the Indian state to Hardeep Singh Nijjar’s murder.
Mr Nijjar was was shot dead outside a Sikh temple on 18 June in Canada.
India has expelled a Canadian diplomat after Canada expelled Indian diplomat Pavan Kumar Rai over the case.
Mr Nijjar, 45, was shot dead in his vehicle by two masked gunmen in the busy car park of the Guru Nanak Sikh Gurdwara in Surrey, a city about 30km (18 miles) east of Vancouver.
A prominent Sikh separatist leader in the western-most province of British Columbia, he publicly campaigned for Khalistan – the creation of an independent Sikh homeland in the Punjab region of India.
Sikhs are a religious minority that make up about 2% of India’s population. Some groups have long called for a separate homeland for Sikhs.
In the 1970s Sikhs launched a separatist insurgency in India which saw thousands killed before it was quelled the following decade.
Since then, the movement has been mostly limited to countries with large Sikh populations such as Canada and the UK. There are an estimated 1.4 to 1.8 million Canadians of Indian origin and the country has the largest population of Sikhs outside Punjab.
India has in the past described Mr Nijjar as a terrorist who led a militant separatist group – accusations his supporters say are unfounded. They say he had received threats in the past because of his activism.
Hardeep Singh Nijjar was murdered on 18 June in Surrey, British Columbia, in what police have described as a “targeted” attack.
Mr Trudeau said in parliament on Monday that he had raised the issue of Mr Nijjar’s killing with Indian Prime Minister Narendra Modi at the recent G20 summit in Delhi.
“Any involvement of a foreign government in the killing of a Canadian citizen on Canadian soil is an unacceptable violation of our sovereignty,” he told lawmakers.
On Tuesday, India’s ministry of external affairs said that it “completely rejected” Mr Trudeau’s claims which it described as “absurd” and politically motivated.
“We are a democratic polity with a strong commitment to rule of law,” the ministry said in a statement.
It accused Canada of providing shelter to “Khalistani terrorists and extremists” who threaten India’s security.
“We urge the government of Canada to take prompt and effective legal action against all anti-India elements operating from their soil,” the ministry said.
After Mr Trudeau’s comments, several large posters and tributes to Mr Nijjar were visible at the Guru Nanak Sikh Gurdwara in Surrey.
Moninder Singh, a spokesman for the British Columbia Sikhs Gurdwaras Council, told that the community appreciated “that at least the prime minister stood up and acknowledged that there is a foreign hand behind this murder”.
Other Sikh groups in Canada, including the World Sikh Organisation, welcomed the prime minister’s statement, saying Mr Trudeau confirmed what was already widely believed in the community. Mr Trudeau had a tense meeting with Mr Modi last week during the G20 summit in India.
Mr Trudeau’s remarks come after his tense meeting with Mr Modi last week during the G20 summit in India where Mr Modi accused Canada of not doing enough to quell “anti-India activities of extremist elements”, referring to the Sikh separatists.
Canada also recently suspended negotiations for a free trade agreement with India. It gave few details on why, but India cited “certain political developments”.
Mr Nijjar is the third prominent Sikh figure to have died unexpectedly in recent months.
In the UK, Avtar Singh Khanda, who was said to be the head of the Khalistan Liberation Force, died in Birmingham in June.
Paramjit Singh Panjwar, who was designated a terrorist by India, was shot dead in May in Lahore, the capital of Pakistan’s Punjab province.
The backdrop to the tension between Delhi and Ottawa is the increasing pressure the Indian administration has put on governments of three countries with sizeable Sikh populations: Canada, Australia and the UK.
It has openly said that a failure to tackle what it calls “Sikh extremism” would be an obstacle to good relations.
On Tuesday, the White House said it was “deeply concerned” about Mr Trudeau’s allegations.
“We remain in regular contact with our Canadian partners. It is critical that Canada’s investigation proceed and the perpetrators be brought to justice,” White House National Security Council spokesperson Adrienne Watson said.
dia had accused Nijjar of terrorism-related activities in the past. It has described Nijjar as a member of the Khalistan Tiger Force, which the Indian government considers a terrorist group.
In 2016, New Delhi alleged Nijjar was linked to a 2007 bombing at a Punjab cinema that killed six. Last year, India’s counterterrorism National Investigation Agency announced a $16,000 reward for information leading to his arrest in relation to a conspiracy to murder a Hindu priest.
Nijjar had said the allegations were false. “I am living here since 1997. I did not go back to India,” Nijjar told Postmedia reporter Kim Bolan in an interview last year. “I’m working hard as a plumber and at the temple. … I’m a community servant, right?”
He even wrote to Prime Minister Justin Trudeau, urging him to “dispel the Indian government’s fabricated, baseless, fictitious and politically motivated allegations against me.”
His killing had led to a series of protests outside the Indian consulate in Vancouver and across Canada, as well as calls and a petition demanding the federal government investigate his death and determine whether foreign interference was at play.
Almost immediately after the shooting, mourners gathered outside the temple had called Nijjar’s death a politically driven assassination linked to his role in advocating for a separate Sikh state.
Nijjar worked as a plumber. He left behind a wife and two adult sons.
What do police say?
The Integrated Homicide Investigation Team has called Nijjar’s shooting targeted, but has not commented on whether police have determined a motive in his death. In August, IHIT spokesman Sgt. Tim Pierotti called it “an ever-evolving investigation.”
Investigators had described the shooters as two heavy-set masked assailants who fled the parking lot on foot, cutting through Cougar Creek park to a getaway car parked in the area of 121 Street and 68 Avenue.
Police believe the vehicle — a silver 2008 Toyota Camry — has been waiting for at least an hour and had a driver, the third suspect in the slaying.
To date, no one has been arrested.
How has this affected relations between Canada and India?
In the aftermath of Nijjar’s death, posters advertising marches in memory of the Surrey man became flashpoints in increasingly tense relations between Ottawa and New Delhi.
The posters referred to high-ranking Indian diplomats as “faces of Nijjar’s killers” and included the words “kill India.” Foreign Affairs Minister Melanie Joly denounced the posters, calling them “unacceptable.”
Earlier this month, Ottawa paused discussions on a trade treaty with India despite the two countries saying they wanted to seal an initial deal by the end of the year.
The relationship between Trudeau and Indian Prime Minister Narendra Modi at the G20 summit in India was visibly tense. India’s External Affairs Ministry said Modi expressed concerns about “continuing anti-India activities of extremist elements in Canada.”
Canada will always defend “freedom of expression, freedom of conscience and peaceful protest,” Trudeau said at a news conference in New Delhi.