"I think there is a larger underlying issue about the space which is given to separatists, to extremists, to people who advocate violence," S. Jaishankar told reporters in New Delhi while commenting about the tableau in a parade.

"I think it is not good for relationships, not good for Canada," he said.

Canada's High Commissioner for India also condemned the incident at a parade by Sikh activists in the Canadian city of Brampton. Video circulated in recent days on the internet showed a tableau from the parade featuring Gandhi wearing a blood-stained white saree with her hands up as turban-clad men pointed guns at her. A poster behind the scene read: "Revenge".

"I am appalled by reports of an event in Canada that celebrated the assassination of late Indian Prime Minister Indira Gandhi," Cameron MacKay said on Twitter.

"There is no place in Canada for hate or for the glorification of violence. I categorically condemn these activities."

Reuters was not immediately able to reach the organisers of the parade for comment.

Indira Gandhi was assassinated in 1984 by two Sikh bodyguards after she allowed the storming of the holiest Sikh temple, aimed at flushing out Sikh separatists who demanded an independent homeland to be known as Khalistan.

The storming of the temple angered Sikhs around the world. The death toll in the attack remains disputed, with Indian authorities putting it in the hundreds and Sikh groups in the thousands.

Canada has the highest population of Sikhs outside their home state of Punjab in India.

Earlier this year India summoned Canada's High Commissioner to convey concern over pro-Khalistan protesters in Canada who breached the security of India's diplomatic mission and consulates.

Bilateral commercial relations between the two countries are worth $100 billion, which includes $70 billion of Canadian portfolio investment, according to Indian figures.