Economy

Economic windfall eyed from Erdogan's India visit

Turkish firms should see both the opportunities and challenges in India, says Turkey's commercial counsellor in New Delhi

29.04.2017
Economic windfall eyed from Erdogan's India visit

By Muhammed Ali Gurtas

NEW DELHI

The Turkish business world is expecting stronger economic ties, more direct investments, and solutions to existing problems from Turkish President Recep Tayyip Erdogan’s visit to India on Sunday and Monday, according to analysts and Turkish officials.

Canan Celebioglu, head of the Turkey-India Business Council of Turkey’s Foreign Economic Relations Board (DEIK), told Anadolu Agency on Saturday that the trade balance between the two countries, which favors India, must become sustainable for Turkey’s benefit as well.

“The share of bilateral trade is around 2 percent of Turkey’s $350 billion foreign trade volume. This figure is below one percent of India’s total trade volume, which is almost $700 billion. It shows that we are quite below the current potential,” she said.

Celebioglu noted that India, which is on the way to becoming the largest market in Asia, stands among the world’s top 10 economies in terms of both GDP and purchasing power parity rankings with its young 1.3 billion population, rapid growing middle class, fast urbanization, and economic transformation.

“The needs of India have to be analyzed correctly. If we examine its top 25 trading partners, I believe that Turkey could take over the position of Thailand, Malaysia, South Africa, or Australia,” she said, adding:

“Turkish companies can become a significant supplier to India by establishing local partnerships, especially in the fields of agriculture, livestock, food products, the defense industry, petrochemicals, construction materials, furniture, and glass products.”

"Turkish companies can stand out in the service sector, infrastructure, and superstructure areas. India may benefit from our experience in public-private partnership investment models in the field of civil aviation and healthcare,” she said.

Stressing the nascent state of the Indian tourism sector, Celebioglu said Turkish entrepreneurs could help write the same success story seen in the Mediterranean basin.

“More slots could be provided by the two countries’ officials for both Turkish and Indian airlines to stimulate tourism activities,” she added.

Despite the advantages offered by Indian markets, Celebioglu also pointed out challenges, saying:

“Practices in India vary from region to region. There are a lot of issues in foreign exchange and tax regulations plus limitations and protections in certain sectors for foreign capital flows.”

The business council head also said that the current trade agreements have to be updated, with a free trade agreement needed between Turkey and India.

‘Turkish companies must be in India’

Vural Cekinmez, Turkey’s commercial counsellor to India, said Turkish officials in New Delhi provide a wide range of support to Turkish companies wanting to enter the Indian market.

On Erdogan’s upcoming visit, Cekinmez said it would be one of the most comprehensive meetings in India in recent years.

“This visit will provide significant benefits for both the Turkish businesspeople who already have investments in India and those looking at the potential here,” Cekinmez said.

Cekinmez stated that the “Make in India” initiative, introduced by Indian Prime Minister Narendra Modi, showed a solid resolve for boosting the country’s investment climate, cutting red tape, and attracting foreign investors with an extensive approach.

“Efforts to set up industrial corridors between major cities and the project to build 100 ‘smart cities’ have also made the country more attractive for doing business,” he said.

“In the beginning of the 1990s, India was only able to attract under $1 billion foreign direct investment. The country has gotten around $310 billion in foreign direct investment in 2000-2016 and become the world’s number three FDI destination,” Cekinmez said.

He said there are some 1,300 Japanese and 400 South Korean companies operating in India but only a few Turkish ones, adding:

“Thus, a Turkish community that can create synergy has not been established yet. The Turkish business cycle needs to be actively in India to do business in this country.”

Cekinmez also recommended that Turkish firms considering entering the Indian market get professional support from consultants to avoid difficulties.

“One of the biggest misunderstandings about India is that the country has a homogeneous market. Yet the Indian market is actually quite heterogeneous with multiculturalism, distinct consumption habits, varied regulations, and taxable provinces,” he said, adding:

“In this respect, it would be logical for our companies to enter the market by focusing on a specific region rather than expecting to operate in the entire Indian market in the first phase.”

According to the Turkish Statistical Institute, Turkey’s exports to India in 2016 totaled $650 million, while imports nearly $5.8 billion from India. 

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