India does not see the diplomatic fallout with Canada over the murder of a Sikh separatist leader impacting its trade ties with the country immediately, a government source said on Tuesday.

Canadian funds are also not expected to change their stance on India, the source added.

Relations between India and Canada plummeted on Monday after Ottawa linked India's high commissioner and other diplomats to the murder of Sikh leader Hardeep Singh Nijjar on its soil and accused New Delhi of a broader effort to target Indian dissidents in Canada.

India denied the allegations, terming them a part of Canadian Prime Minister Justin Trudeau's "political agenda".