Turkey’s Indian Intercourse: Why Erdogan’s visit is doomed to be a high visibility-low impact business event

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Turkey’s Indian Intercourse: Why Erdogan’s visit is doomed to be a high visibility-low impact business event

President Erdogan, accompanied by the Turkish economy and trade ministers, visited New Delhi on April 30, where he held talks with his Indian counterpart Pranab Mukherjee and Prime Minister Narendra Modi.

Erdogan also participated in Turkey-India Business Forum to discuss improvement of bilateral economic and trade ties.

But, how realistic would it be to expect a breakthrough in especially economic and trade cooperation ?

In political terms, there are two large road blocks hindering further cooperation in between Turkey and India.

First is the far-right wing of Narenda Modi’s party, Bharatiya Janata. This influential far-right Hindu group in Bharatiya Janata is known to be the main advocate of anti-islamic political discourse in Indian politics. Modi will most probably keep a blind eye on the complaints arising from his own party when dealing with Turkey, but it will not prevent a potential annoyance in Turkish side.

Second is the close “brotherhood” between Turkey and Pakistan, where the latter is the most “disliked” neighbour of India. The regional rivalry between India and Pakistan is the most critical complication in developing Turkey-India bilateral ties.

On economic and trade side of the house, as it is the case in Turkey, India has a large manufacturing base, ranging from household appliances to textile.

Can Turkey export washing machines or TV sets to India? Not very likely. Turkish exports are a little bit premium in quality when compared to Indian products but they are also more expensive.

One would immediately imagine millions of Indian tourists lying on Turkish beaches, yet it is a dream too far away right now.

For globetrotting Indians, the regular international spots — Dubai, Singapore, Bangkok, Pattaya — remain popular. But for the evolved and the well-heeled who are looking for new, relatively unexplored destinations, Corsica (France), Genoa (Italy), Iceland and Bora Bora (French Polynesia) have emerged as the fastest growing emerging destinations. Turkey has a long way to go before making its way to this list in India.

Looking at what India can export to Turkey, “Services Sector” tops the list.

India’s services sector has the largest share in the GDP, accounting for 57% in 2012, up from 15% in 1950. It is the 7th largest in the world by nominal GDP, and third largest when purchasing power is taken into account. The services sector provides employment to 27% of the work force. Information technology and business process outsourcing are among the fastest-growing sectors.

Yet, Turkey has a strong protection wall over services sector in domestic market which makes it almost impossible for Indian companies to penetrate. If or when, Turkey can lower the protections in its domestic market for services sector, we might see an influx of Indian businesses entering Turkish markets.

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