Canada sought Tuesday to maintain its full diplomatic presence in India, after New Delhi reportedly ordered Ottawa to withdraw 40 diplomats in a dispute over the killing of a Sikh separatist.

Relations between Delhi and Ottawa deteriorated sharply two weeks ago when Canada raised the possibility of Indian government involvement in the assassination of Hardeep Singh Nijjar near Vancouver in June.

Nijjar, who was designated as a terrorist by India in 2020, but was living freely in Canada, was gunned down by unidentified men in Surrey, British Columbia on June 18. Trudeau has not provided public evidence to back up the allegations, while India has dismissed the claims as "absurd" and "politically motivated."

India has told Canada to recall around 40 diplomats from the country by October 10, amid a deepening diplomatic row between the two nations, the Financial Times reported on Tuesday. New Delhi has also warned it will revoke diplomatic immunity for those who remain in India after the deadline, the report claimed.

“In moments of tensions, because indeed there are tensions between both our governments, more than ever it’s important that diplomats be on the ground,”  the Canadian foreign minister Melanie Joly told reporters.

She added: “And that’s why we believe in the importance of having a strong diplomatic footprint in India.”

Canadian Prime Minister Justin Trudeau described the situation as “extremely difficult.”

“We’re not looking to escalate. As I’ve said, we are going to be doing the work that matters in continuing to have constructive relations with India,” he said Tuesday.

The Indian Ministry of Foreign Affairs also declined to comment on the report.