Turkish President Recep Tayyip Erdogan’s first trip to India, with an impressively large business delegation couldn’t have been better timed, as India and Turkey look to reinventing the wheel of economic and commercial cooperation. Indian companies are expanding their footprints in Turkey with fresh acquisitions in areas like farm machinery equipment. India and Turkey are collaborating to build a 459-km pipeline section of the Trans-Anatolian Pipeline project from Turkey’s Eskişehir province to the border with Greece. India is partnering with Turkey in the implementation of the Istanbul Programme of Action for Least Developed Countries in areas like climate change and capacity building. Most importantly, there are positive vibes between the two nations flowing out of exchange of high-level visits as that of Prime Minister Narendra Modi to Turkey in November 2015 for the G-20 Summit and now the visit of President Erdogan to India. At a people-to-people level, Turkish and Indian people are entering each other’s hearts as never before.
So with a matrix of relationship spanning an unprecedented spectrum of opportunities, President Erdogan’s visit to India is certainly not business as usual. It is the historical bonds that sustain the bilateral ties in a modern India and Turkey, even as the two nations chart a deeper roadmap of economic engagement.
What is exciting about this calibrated engagement are the business and economic dynamics of the two countries, which position India and Turkey strongly for a more robust agenda of economic cooperation. A resurgent India growing at 7%—and pegged by the IMF as the fourth largest global economy by 2020—on the back of a successful demonetisation exercise, big economic reforms like Goods and Services Tax, opening up of sectors like pharma, defence to 100% FDI and a vast pipeline of infrastructure projects, should be a big attraction for Turkish investors. Similarly, Turkey’s largely free-market economy, increasingly driven by its industry and service sectors, an aggressive privatisation programme, an emerging cadre of middle-class entrepreneurs and investor friendly policies are further supporting its credentials as an ideal business and investment destination.
Rich possibilities for business are emerging, with a number of Turkish companies—Celebi, Soktas, Fernes, Enpay—looking to expand their business footprint across the subcontinent and seeking opportunities in airport logistics, textiles, EPC (engineering, procurement and construction) and industrial machinery. India too is making inroads, with some large Indian conglomerates exploring Turkey’s domestic market and leveraging on their Turkish operations as the gateway to other markets in the region and beyond.
We in FICCI feel that there is much scope for expansion of existing commercial engagements, as well as exploring new business opportunities. Bilateral trade between India and Turkey is at $6.4 billion and ideally a strategy focused on the untapped potential could unleash fireworks in trade and investment. Let me outline some.
Turkey is a world leader in textiles and clothing and in this area, there is much scope for technology and skills sharing, with India eyeing a share of global supply chain under the “Make in India” programme to energise India’s manufacturing sector. With rising income levels in both countries, promotion of high-end textiles could be an area of cooperation.
In healthcare, there are opportunities for strategic collaboration between Indian and Turkish medical technology firms and between companies on both sides to manufacture and commercialise biosimilar drugs, as well as market biotech products in Turkey.
There is a great future in India-Turkish cooperation in auto components. With global auto majors positioning India as an international launch platform and a manufacturing and export base, automobiles offer exciting synergies with Turkey, which is the 15th largest automobile manufacturer in the world and a key player in the global value chain of international OEMs. Turkey is looking at enhanced indigenisation in the sector, including cooperation with global auto players, which affords increased opportunities for Indian companies for collaboration in the field of automobiles, automotive component manufacturing and industrial, financial and automobile design institutions.
India’s reliance on the Arab region for its energy needs and Turkey’s geographical advantage as the arterial transit route for Russian and Central Asian oil has exciting prospects for deepening our strategic engagement with Turkey in hydrocarbons. Turkey can play a pivotal role in guaranteeing India’s energy needs. Turkey is also keen for India to share its experience in power generation and this opens up collaboration on global energy demand, especially renewable energy.
Transportation, communication, logistics, retail, financial services and science and technology are other opportunities for cooperation between the two countries. There are possibilities of working together in mutually identified projects in areas such as telecommunications, computerisation, non-technology space research, bio-technology and environmental technology.
Of course there is tourism, which has very strong prospects, with Indian tourist arrivals in Turkey registering a robust growth of about 10% to 130,000 in 2015 as the country remains a popular destination for Indians travelling for adventure and leisure. India, which has moved up 12 places and now ranks 40th among 136 nations globally in the World Economic Forum’s (WEF’s) travel and tourism competitiveness index, can be an attractive destination for Turks, with its rich and diverse cultural heritage and natural beauty. Industry needs to explore this opportunity.
Given the innumerable opportunities, India and Turkey are poised for a transformative moment in their bilateral ties. The Indian and Turkish ambition to scale new developmental heights and their entrepreneurial zeal will be a great enabler for taking our economic relations to newer heights in the coming years.
Pankaj R. Patel is president, FICCI.