Caring about another country's law and assassinating people on their soil are two distinctly separate things at two different levels.
I see Indian attitudes hardened against Canada (because of the perceptions you mentioned) and the expectation is that Canadians will capitulate (along with the rest of the West).
No one is saying Khalistanis were right in doing the things they did in India, but sending Indian RAW and assassins to Canada is a game changer now.
So I will repeat the reasons why I think that Canadians will sit on their tush is unrealistic - in spite of your perceptions.
Canada, US and the rest of the NATO countries speak with one voice - always. Threatening Canada's sovereignty is the same as threatening that of the US and most NATO members.
Right now - the US might be okay to look the other way on India's assassination attempts, but push comes to shove, they will stand behind Canada. They can do things in geopolitical context too, like maybe what happened in Bangladesh.
- About ~75% or more of the armaments produced in India as JV's have Western or Israeli imported components, like radars on India's destroyers and most components on the Tejas fighter, just a few examples.
- Majority of India's remittances come from the West and its stooges. They can make life for India's economy quite difficult, in spite of the threshold and heft you mention. Remittance to India was a major part of Indian economy, which was $125 Billion last year.
- Most of Indian labor class remits money from the Gulf (UAE mostly), who are also Western stooges. See chart below.
- India is heavily dependent on the West for the Backoffice business, not the other way round. This can go South with no guarantees at the stroke of a pen. Of course TCS, Wipro and others won't let it happen and will stop it far before anything untoward happens.
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I know it warms the cockles of every Indian's heart to think that their country is powerful in some way or the other, and they can teach Canadians a lesson. Perception is everything, as they say.
But reality (and the long terms fallout of this fiasco) may be very different.