India expelled a senior Canadian diplomat on Tuesday and accused Canada of interfering in its internal affairs, escalating a breach with Ottawa over its allegations of Indian involvement in the killing of a Sikh activist in Canada.

It came a day after Canadian Prime Minister Justin Trudeau said there were credible allegations that India was connected to the assassination of Hardeep Singh Nijjar, a Sikh independence advocate who was gunned down on June 18 outside a Sikh cultural centre in Surrey, British Columbia, and Canada expelled a top Indian diplomat.

India rejected the allegations as “absurd.”

India has fought against a movement to establish an independent Sikh homeland known as Khalistan since the 1980s, when a raid on separatists in a major temple led to the assassination of a prime minister and a wave of anti-Sikh violence.

Nijjar was wanted by Indian authorities, who accused the activist of involvement in an alleged attack on a Hindu priest in India and had offered a cash reward for information leading to his arrest.

Nijjar was organising an unofficial referendum on Sikh independence from India at the time of this death.

Trudeau told Parliament on Monday that Canadian security agencies were investigating “credible allegations of a potential link between agents of the government of India and the killing of a Canadian citizen.”

“Any involvement of a foreign government in the killing of a Canadian citizen on Canadian soil is an unacceptable violation of our sovereignty," he said.

India’s foreign ministry dismissed the allegation as “absurd and motivated,” and accused Canada of harboring “terrorists and extremists.”

“Such unsubstantiated allegations seek to shift the focus from Khalistani terrorists and extremists, who have been provided shelter in Canada and continue to threaten India’s sovereignty and territorial integrity,” it wrote in a statement issued earlier on Tuesday.

India has long demanded that Canada take action against the Sikh independence movement, which is banned in India but has support in countries like Canada and the UK with sizable Sikh diaspora populations.

Canada has a Sikh population of more than 770,000, about 2 percent of its total population. (AP)