SynopsisIndia's JSW Steel has reportedly slowed down its process to acquire a stake in Teck Resources' coal unit in Canada due to escalating diplomatic tensions between India and Canada, reports Reuters. The dispute arose following the expulsion of diplomats by both nations over the murder of a Sikh separatist leader in British Columbia. While discussions have slowed, paperwork for the deal continues, with JSW Steel waiting for the situation to stabilize. The acquisition, which could involve a 34-37% stake, is significant as JSW Steel is a major customer of Teck's coal business.In recent developments, India's JSW Steel is facing delays in its pursuit of acquiring a stake in Canada's Teck Resources coal unit, signifying the impact of escalating diplomatic tensions between the two nations. The deteriorating relations stemmed from mutual expulsions of diplomats following a dispute related to the murder of a Sikh separatist leader in British Columbia.As a result of the strained diplomatic ties, India temporarily suspended visa services for Canadian citizens, citing security threats to its consulate staff in Canada. In this context, discussions between JSW Steel, India's largest steelmaker, and Teck Resources regarding the stake purchase have decelerated, although administrative preparations continue."We will wait until the issue subsides," disclosed an anonymous source familiar with the matter. The individual declined to be named due to a lack of authorization to speak to the press. Despite the slowdown, preparations such as valuation paperwork and communication with banks are still in progress.JSW Steel refrained from providing comments on the matter. Teck Resources responded to Reuters queries by stating, "We do not comment on market rumors or speculation."Canada's industry ministry, responsible for approving foreign investment deals, highlighted that any acquisition of a Canadian firm by a foreign entity would undergo a national security review under the Investment Canada Act.Regarding the financing of the transaction, a source close to the matter disclosed that JSW is in discussions with investment banks, including Standard Chartered and Deutsche Bank. The acquisition could potentially involve a stake ranging from 34% to 37%.JSW Steel holds significant importance as one of Teck's major customers in the coal business. While Teck Resources previously rejected a $22.5 billion unsolicited bid for the entire company from global miner and trader Glencore, it confirmed receiving offers from various interested parties for its coal business. Japan's Nippon Steel has also expressed interest in Teck's coal business.For India, Canada stands as the fourth-largest exporter of coking coal crucial in the steel industry, with Australia, Russia, and the United States being the top three exporters.ConclusioTthe diplomatic tensions between India and Canada have introduced uncertainties into the acquisition plans of JSW Steel, potentially impacting the dynamics of Teck Resources' coal business.