CONSULATE GENERAL OF INDIA, ISTANBUL

 

INDIA-TURKEY ECONOMIC AND COMMERCIAL RELATIONS

General-The economies of India and Turkey are both complementary and competitive with each other in many sectors.  There are good opportunities for bilateral cooperation, including in third countries. 

 Institutional Mechanism and Bilateral Agreements- India and Turkey have signed many Agreements over the years to strengthen and deepen their economic cooperation.  The Bilateral Trade Agreement between India and Turkey was signed in 1973.  This was followed by an Agreement on setting up an India–Turkey Joint Committee on Economic and Technical Cooperation (JCETC) in 1983.  Under this Agreement, JCETC meetings are held alternately in India and Turkey.  The Ninth Session was held in Ankara on Sept 8, 2009.  Establishment of a Joint Study Group (JSG) to explore the possibility of concluding a bilateral FTA was announced at this meeting.  During his visit to Turkey on Sept 7-8, 2009, the Indian Co-Chair of JCETC Shri Anand Sharma, Minister for Commerce and Industry met the Turkish State Minister for Foreign Trade Zafer Çağlayan, Turkish Minister for Trade and Industry Nihat Ergun and the Turkish Co-Chair of JCETC State Minister Mehmet Aydın, on the sidelines of the ninth session.  He also addressed Indian and Turkish businessmen in an event jointly organised by Federation of Indian Chamber of Commerce and Industry (FICCI) and the Turkish Union of Chambers and Commodity Exchanges (TOBB) on Sept 7, 2009 in Ankara.

3.   India-Turkey Joint Business Council (JBC) between Federation of Indian Chambers of Commerce and Industry (FICCI) and Foreign Economic Relations Board of Turkey (DEIK) was set up in 1996.  The last session of JBC was held in Istanbul on September 9, 2009.  During the visit of the Turkish Prime Minister Recep Tayyip Erdoğan to India from November 21-24, 2008, India Turkey Business Forum was jointly organised by FICCI and TOBB in New Delhi.  During the visit of the Turkish President Abdullah Gül to India between February 8 and 12, 2010, a large business delegation accompanied him.  FICCI and Confederation of Indian Industry (CII) organised business meetings for the delegation in both New Delhi and Mumbai.

4.   During the visit of the Turkish Foreign Minister Ali Babacan in February 2008, FICCI and TOBB signed a memorandum of understanding to enhance cooperation.

5.   CII and Turkish Industrialists and Businessmen’s Association (TUSIAD), together, organized India-Turkey CEOs Business Forum in Istanbul on June 28, 2005, coinciding with the visit of Shri Mani Shankar Aiyar, Minister of Petroleum and Natural Gas. The CII delegation met with key officials of the Government and captains of the Turkish industry.  The first such Business Forum was held in New Delhi on November 2, 2004, when a 25 member strong Turkish business delegation visited India. 

6.   During visit of the Indian Prime Minister Vajpayee to Turkey in September 2003, it was also decided to set up an Indo-Turkish Joint Working Group on Trade and Economic Issues (JWG). The first meeting of JWG was held in New Delhi in October 2004.  The second meeting of JWG was held in Ankara on September 7, 2009.  Its recommendations, after finalisation are to be submitted to JCETC.

7.   During the Turkish Prime Minister Turgut Özal’s visit to India in 1986, the bilateral Civil Aviation agreement was signed. 

8.   Two Agreements – one regarding avoidance of double taxation and the second on tourism – were signed during the Turkish President Demirel’s visit to India in 1995. 

9.   During President K.R. Narayanan’s visit to Turkey in September 1998, Agreements on Reciprocal Promotion and Protection of Investment; Prevention of Illicit Trafficking in Narcotics and Psychotropic Substances; Memorandum of Understanding between the Council for Scientific and Industrial Research (CSIR) and Turkish Scientific and Technological Research Institute (TUBITAK) and Memorandum of Understanding between the National Centre of Trade Promotion (NCTP) and Export Promotion Centre of Turkey (IGEME) were signed.  Upon exchange of Instrument of Ratification, the agreement between India and Turkey concerning the Reciprocal Promotion and Protection of Investment entered into force on October 18, 2007. 

10. A Memorandum of Understanding for Cooperation in agriculture was signed during visit of the Turkish Prime Minister Bülent Ecevit in 2000. 

11. Another Memorandum of Understanding for cooperation in the Railway sector was signed during the visit of Turkish Minister for Transport to India from 21 September to 26 September, 2000. 

12. During Prime Minister Vajpayee’s visit to Turkey in September 2003, an Agreement on Cooperation in the field of Science & Technology and a Protocol on Cooperation in the fields of Information Technology and Computer Software were signed.  During the same visit, the lack of direct banking relations between India and Turkey was discussed and as a result, the State Bank of India (SBI) opened a Representative Office in Istanbul.

13. Cooperation in hydrocarbon sector got a boost when a MoU was signed during the visit of Turkish Minister of Energy & Natural Resources to India in November 2005.  In pursuance of the MoU, the first meeting of India-Turkey Joint Working Group (JWG) on cooperation in Hydrocarbons was held in New Delhi at the time of the referred visit.  The second meeting took place in Ankara on May 21, 2008.  The 3rd meeting is to take place in India on a mutually convenient date.

 Bilateral Economic Cooperation

A bilateral Memorandum of Understanding in the field of agriculture was signed on March 31, 2000.  The Turkish Minister of Agriculture and Rural Affairs Mehdi Eker visited India on June 17-20, 2010.  The first meeting of Steering Committee on Agriculture took place on June 19, on the sidelines of the visit. The Work Plan for 2010-11 and 2011-12 was also finalised during the visit.

15. The Indian Railway Construction Company (IRCON) executed two railroad electrification projects worth US$35 million awarded by the Turkish State Railway Authority (TCDD) in nineties.  Since then, there have been some forward movement in cooperation in this sector.

16. A Turkish infrastructure delegation visited India in October 2000 to carry forward the process of consultations.  Among Indian companies, Punj Lloyd along with LIMAK had undertaken construction work in the prestigious Baku-Tbilisi-Ceyhan Pipeline Project.  It was the first foreign company to do such a project in Turkey.  Kalpataru, Gujarat along with BARMEK participated in power transmission line projects for TEAS.  National Building Construction Corporation (NBCC) provided consultancy services for the Marmara Engineering Emergency Reconstruction Project.

17. In the hydro-carbon sector, ONGC Videsh Ltd (OVL) and Turkish Petroleum Corporation (TPAO) joined hands for joint operation in a Libyan exploration block. GAIL (India) Ltd. and BOTAS of Turkey signed an MOU for cooperation in CNG conversion of vehicles in Turkey and training of BOTAS personnel in India.

18. The Indian Oil Corporation Limited (IOCL), in collaboration with Çalık Enerji was granted approval by the Energy Market Regulatory Agency (EPDK) of Turkey in July 2007 and license in December 2007 for setting up an oil refinery with a capacity of 15 million tons a year in Ceyhan, envisaging a total investment of approximately US$5 billion. However, the two partners in this project are yet to agree on details and no work on the ground has started so far.

19. To tap into the full potential, Turkish Airlines restarted its direct flight between Istanbul and Delhi in September 2003, after a gap of eleven years.  Subsequently, Turkish Airlines began flying to Mumbai in 2006.  The second round of Bilateral Civil Aviation Talks were held in Ankara and Istanbul on January 18 (Ankara)-19 (Istanbul), 2007. As a result, the Turkish Airlines is currently flying seven code shared flights a week to Delhi and another seven to Mumbai.

20. The Turkish State Minister for Foreign Trade Mr. Kürşad Tüzmen visited India from March 17-22, 2008, leading a 170 member strong business delegation.  It included more than 100 Turkish businessmen from 80 companies, representatives from 20 business and industry associations, media persons and officials.  During his visit, he held discussions with the Minister of Commerce and Industry Shri Kamal Nath, Minister of Finance Shri P Chidambaram, Minister for Road Transport and Highways Shri T R Baalu and Minister of State for Housing and Urban Poverty Alleviation Kumari Selja in New Delhi.  During these meetings, possibility of establishing FTA between India and Turkey, amongst other issues was discussed.  A Turkish-Indian Business Forum was organised by FICCI at New Delhi on March 19, where more than 100 accompanying Turkish businessmen took part.  A similar event was organised in Mumbai as well.  All together more than 2000 one to one business meetings were organised in New Delhi and Mumbai by FICCI for the visiting Turkish delegation. 

21. According to the available details, more than 60 Indian companies have registered businesses in Turkey by the way of representative offices, trade offices and joint ventures.  In 2002, Indo-Rama Group started a production unit for polyester fibre. In 2005, Polyplex established a factory for producing packaging material. For some years, TATA has been marketing Tata pick-up vehicles in Turkey. In February 2005, they introduced Tata Indica and Indigo passenger cars. Subsequently they established an assembly unit for Tata buses in Adana, mainly for exporting to UAE and other Middle East countries. Other leading industrial houses such as Reliance, Ispat, Aditya Birla Group etc have established their trading offices in Turkey to look for opportunities in the market here.  Mahindra and Mahindra has formed a joint venture marketing network with İLÇE Otomotiv Servis ve Ticaret A.Ş. for its utility vehicles and tractors in Turkey.  Approvals for utility vehicle segment, Mahindra Goa and Mahindra Tractors have already been obtained.  India’s second largest tractor producer TAFE has announced its intention to set up a tractor manufacturing factory at Manisa (near Izmir).  The initial plans are for 15,000 units per year.  Jain Irrigation Systems has decided to invest US$20 million in two major projects in the southern province of Adana.  The initial manufacturing facility for the production of irrigation systems will be operational by the end of this year. They have plans to invest in a food processing plant at a later stage.  Arcelor Mittal has acquired significant business interests in two steel plants in Turkey, operated by Erdemir and Borusan respectively.  CRI Pumps have set up an assembly unit in Izmir.  Some of the Indian companies have invested in mining sector in Turkey, including in iron ore, marble and boron.

22. Dhanus Technologies, a Chennai based IT company had concluded an agreement to acquire Borusan Telekom - Turkey’s first alternative telecom operator with “A” type license in January 2008 with an investment of US$77 million. Due to the global financial crisis, this investment has been put on hold.  In July 2010, Indian IT major WIPRO signed a joint service provider agreement with AS/Nexia of Turkey to provide consultancy services on energy issues and risk management in the context of the deregulation and privatization in Turkey.  Dabur India Limited has acquired 100% stake in Hobi Kozmetik Group, a Turkish personal care products company, through its international arm – Dabur International Limited for Rs 323.78 crores (approximately US$69 million).  Pioneer Wincon Pvt Ltd has installed and commissioned 250KW capacity wind turbine in Turkey in July 2010.

23. A Textile Roadshow was organised in Istanbul to promote investment and creation of joint ventures by the Turkish companies in India on November 3, 2009.  More than 30 Turkish companies participated in this event.  The Indian delegation was led by the Minister for Textiles Dayanidhi Maran, who made the presentation on Indian textiles industry.  Following close on its heels was yet another Textile Roadshow organised by the State Government of Karnataka to attract Turkish businesses to invest in the State, with particular reference to textiles. 

24. A consortium formed by GMR Infrastructure Ltd – Limak Construction – Malaysia Airport Holding won the auction for Sabiha Gökçen Airport in Istanbul on July 10, 2007, on the basis of Build-Operate-Transfer (BOT) for Euro 1.932 billion.  As per the terms of the auction, the consortium will build a new international passenger terminal in the existing airport and operate it for 20 years.  GMR and Limak have 40% stake each in the consortium with 20% with the Malaysian company.  The Ground-breaking ceremony for the construction was held on May 3, 2008, in presence of the Turkish Prime Minister.  Since then, the new terminal has been inaugurated in presence of the Turkish Prime Minister, Civil Aviation Minister of India Shri Prafulla Patel and the Malaysian Transport Minister on October 31, 2009 – months ahead of its scheduled completion. 

25. Turkish companies having presence in India include LİMAK Construction, SARAR, SOKTAŞ and IZOPOLI-KINGSPAN.  LİMAK has been in India since 2001 and has so far participated, in collaboration with an Indian company -Soma in construction, widening and strengthening of National Highway segments measuring 135 kms and in collaboration with another Indian company – Gammon India Ltd in laying of cross country pipeline and associated facilities on a 274 kms long segment.  SARAR, a high-end garment manufacturer entered the Indian market through its franchisee partners in 2003.  SOKTAŞ, a leading garment manufacturer in the European Customs Union – Turkey registered itself in India in early 2007 and has also started work on a proposed garment factory to be set up in Maharashtra.  IZOPOLI-KINGSPAN, a leading manufacturer of fire retardants, has already opened an office in India in 2007 and they are looking at the possibility of putting in investment for manufacturing of the fire retardants to cater to the Indian market.  Hidromas – manufacturer of heavy earth movers are in the process of setting up a manufacturing unit in Chennai. 

26. A consortium formed by the Nas Aviation Services India Ltd and the Turkish airport ground services provider Celebi won a tender to provide ground services for 10 years at Mumbai international airport in India. Celebi has a 51 percent stake in the venture while the Indian company has a 49 percent stake. In yet another development, Celebi won another tender for modernization of the cargo terminal at Delhi’s IGIA and managing it for 25 years. 

27. Fernas, a Turkish infrastructure company mainly operating in pipeline sector, has won a contract for laying and commissioning a segment the GAIL pipeline in Gujarat.

 

 

Bilateral Trade- Detailed statistics of India-Turkey bilateral trade is given in the table below: 

The major items of India’s exports to Turkey include cotton yarn, synthetic yarn, organic dyes, organic chemicals, denim, steel (bars and rods), granite, antibiotics, carpets, unwrought zinc, sesame seed, TV CRTs, mobile handsets, clothing and apparel. Turkey’s exports to India includes poppy seed, auto components, marble, textile machinery, handlooms, denim, carpets, cumin seed, minerals (vermiculite, perlite and chlorites) and fittings and steel products.