The USA reserves the right to assassinate any one, any where, at any time as long as someone with signing authority calls them a terrorist. The Russians have made a game of it with their exotic mix of radioactive poisons and throwing people out of windows. The current nationalist government of India is demanding these same prerogatives to match their self-conception of India and status as a major power.
Or (only slightly) more charitably: India would have been happy to keen this quiet. But once Canada announced this, India had to respond. Their voters respond well to muscular gestures, so something flashy like a visa ban demonstrates their toughness. Canada had already generating some bad publicity in India, and beating up on us for a little bit will probably make number go up.