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We show that Hecke algebra of type B and a coideal subalgebra of the type A quantum group satisfy a double centralizer property, generalizing the Schur-Jimbo duality in type A. The quantum group of type A and its coideal subalgebra form a quantum symmetric pair. A new theory of canonical bases arising from quantum symmetric pairs is initiated. It is then applied to formulate and establish for the first time a Kazhdan-Lusztig theory for the BGG category O of the ortho-symplectic Lie superalgebras $\mathfrak{osp}(2m+1|2n)$. In particular, our approach provides a new formulation of the Kazhdan-Lusztig theory for Lie algebras of type B/C.

We develop a general theory of canonical bases for quantum symmetric pairs (U, U^i) with parameters of arbitrary finite type. We construct new canonical bases for the simple integrable U-modules and their tensor products regarded as U^i-modules. We also construct a canonical basis for the modified form of the i-quantum group U^i. To that end, we establish several new structural results on quantum symmetric pairs, such as bilinear forms, braid group actions, integral forms, Levi subalgebras (of real rank one), and integrality of the intertwiners.