The India-Canada diplomatic row over the killing of Sikh separatist Hardeep Singh Nijjar escalated further on Tuesday with Ottawa hinting at possible sanctions against India in view of certain findings in the case and New Delhi vehemently trashing the charges.

The Canadian authorities also attempted to link the Bishnoi gang with Indian government agents in carrying out covert operations including violent criminal activities in Canada and claimed to have clear evidence to back the charges.

As the ties between the two countries hit rock bottom, Canadian Foreign Minister Melanie Joly did not rule out imposing sanctions against India saying "everything is on the table".

In a related development, Prime Minister Justin Trudeau spoke to his British counterpart Keir Starmer and discussed "developments" related to what the Ottawa described as "targeted campaign against Canadian citizens by agents linked to the government of India".

On its part, India strongly rejected attempts by Canadian authorities to link Indian agents with criminal gangs in Canada with official sources even saying that Ottawa's assertion that it shared evidence with New Delhi in the Nijjar case was simply not true.

The sources also rejected Canadian Prime Minister Justin Trudeau's allegations that India was engaging in activities including carrying out covert operations targeting Canadian nationals in his country.

At a press conference, Trudeau, pointing fingers at India on the Nijjar case, said Canada will never tolerate the involvement of a foreign government in threatening and killing Canadian citizens on Canadian soil.

On Monday, India expelled six Canadian diplomats and announced withdrawing its high commissioner from Canada after dismissing Ottawa's allegations linking the envoy to a probe into the killing of Sikh extremist Nijjar.

Joly, replying to a question at Trudeau's media briefing, did not rule out further action against India.

"So today was a really important step. When you look at what is available in our toolbox, expelling diplomats is one of the highest and toughest measures a country can take under the Vienna convention...Everything is on the table," she said.

The ties between India and Canada came under severe strain following Canadian Prime Minister Trudeau's allegations in September last year of a "potential" involvement of Indian agents in the killing of Nijjar. New Delhi rejected Trudeau's charges as "absurd".

In his comments at the media briefing on Monday, Trudeau, referring to findings by the Royal Canadian Mounted Police (RCMP) claimed that it has "clear and compelling evidence that agents of the government of India have engaged in, and continue to engage in, activities that pose a significant threat to public safety".

"This includes clandestine information gathering techniques, coercive behaviour targeting South Asian Canadians, and involvement in over a dozen threatening and violent acts, including murder. This is unacceptable," he alleged.

The Canadian prime minister said his government's attempts to work with India did not yield any result.

"That is why, this weekend, Canadian officials took an extraordinary step. They met with Indian officials to share RCMP evidence, which concluded six agents of the Government of India are persons of interest in criminal activities," he said.

"And despite repeated requests to the Government of India, they have decided not to co-operate. Given that the Government of India still refuses to cooperate, my colleague, the Minister of Foreign Affairs, Melanie Joly, had only one choice," Trudeau said.

"Today (Monday), she issued a deportation notice for these six individuals. They must leave Canada. They will no longer be able to act as diplomats in Canada, nor to re-enter Canada, for whatever reason," he said.

An Indian government source said: "Canadian PM Trudeau's press conference yesterday was the same old Trudeau saying the same old things for the same old reasons." Separately, the Royal Canadian Mounted Police alleged that Indian agents are using criminals to "target" the South Asian community, specifically pro-Khalistan elements in Canada.

In this context, it also referred to the Bishnoi gang.

The Indian government sources said the assertions by Canadian officials that Canada presented credible evidence to India in the Nijjar case is simply not true.

"The central assertion from all Canadian officials is that credible evidence has been presented to India. This was also repeated by their Charge d'Affaires Stewart Wheelers to the press. This is simply not true," the source said.

"From the very beginning, the Canadian approach has been to make vague accusations and put the burden of denial on India," it added.

The sources also rejected attempts by the Royal Canadian Mounted Police (RCMP) to link Indian agents to the Bishnoi gang.

At the RCMP press briefing, assertions were made about connections of certain individuals to India. In no case were any specifics provided, the sources said.

There was also talk about holding people accountable. But it was never made clear who and for what, they said.

The sources also slammed Canada for targeting the Indian high commissioner to Ottawa.

It is absurd that after intensively engaging the high commissioner over the last year, the Canadian government now chooses to target him, they said.

Meanwhile, Canada's Minister for International Trade and Economic Development Mary Ng assured the Canadian business community that Ottawa remains fully committed to supporting well-established commercial ties between Canada and India.

"Canada is a country founded on the rule of law, and protecting our citizens is our top priority. In light of the statement by the RCMP today, we are taking further necessary steps to ensure the safety of Canadians," she said "I understand the effects today's events may have on Canadians doing business or investing in India, and the uncertainty that some may be feeling at this time," she said.

"I want to reassure our business community that our government remains fully committed to supporting the well-established commercial ties between Canada and India," Mary added.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.