India will reopen visa services for Canadians, its embassy in Ottawa announced Wednesday, a move that could ease tensions in a high-profile dispute over the killing of a Sikh separatist on Canadian soil.

Relations between India and Canada plunged after Prime Minister Justin Trudeau last month publicly linked Indian intelligence to the killing of Canadian citizen Hardeep Singh Nijjar in June. New Delhi dismissed the allegation as "absurd."

Nijjar, who advocated the creation of a separate Sikh state carved out of India, was wanted by Indian authorities on charges of terrorism and conspiracy to commit murder.

Canada has called for India to cooperate in the investigation into his death and expelled an Indian diplomat.

New Delhi expressed outrage, and reacted by taking countermeasures that included shutting down visa services for Canadians.

"After a considered review of the security situation that takes into account some of the recent Canadian measures in this regard, it has been decided to resume visa services," the Indian High Commission said in a statement.

India's foreign minister, Subrahmanyam  Jaishankar, on Sunday had insisted on increased security for India's missions in Canada.

He was quoted by the Times of India as saying security had been a concern and that "if we see progress there, I would like very much to resume visa services."

Canadian Emergency Preparedness Minister Harjit Sajjan welcomed the resumption, calling it "good news for Canadians." 

He said the two countries had "strong people to people ties" and that it was important for people to be able to go back and forth, for example, for weddings or funerals. Canada's population features 1.4 million people of Indian origin.

Sajjan recalled that "a Canadian was killed on Canadian soil" and he said India has yet to cooperate in the criminal investigation.

Canada announced last week it had withdrawn 41 diplomats from India as a result of the row.

New Delhi was about to revoke diplomatic immunity for all but 21 of Canada's diplomats and their families, forcing Ottawa to pull out the others.

The Indian government had also advised its nationals not to travel to parts of Canada "given the increase in anti-Indian activities."

Nijjar, who emigrated to Canada in 1997 and became a Canadian citizen in 2015, was shot and killed by two masked assailants in the parking lot of a Sikh temple near Vancouver in June. 

Canada is home to some 770,000 Sikhs, who make up about two percent of the overall population, with a vocal minority calling for creating a separate Indian state called Khalistan.

The Sikh separatist movement is largely finished within India, where security forces used deadly force to put down an insurgency in the state of Punjab in the 1980s.

Hundreds of Sikh protesters rallied outside Indian diplomatic missions in Canada last month, burning flags and trampling on pictures of Indian Prime Minister Narendra Modi.