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India to Reassess Billion-Dollar Infrastructure and Aviation Deals with Turkey Amid Geopolitical Rift

Updated: May 15, 2025 12:45

Image Source: Organiser
India is shifting to re-evaluate and possibly reverse a number of billion-dollar infrastructure, aviation, and trade agreements with Turkey after a sudden decline in bilateral ties. The move follows increased tensions following Ankara's outspoken support for Pakistan during recent military clashes and repeated comments on Kashmir at global platforms. The move represents a major realignment of India's economic and strategic interaction with Turkey.
 
Background and Context
  • Operation Sindoor: Indian military strikes against terror setups in Pakistan and Pakistan-occupied Kashmir (PoK) in May 2025 after the Pahalgam terror attack provoked a stern response from Turkey, which criticized India's strikes and stood by Islamabad.
  • Escalating Tensions: Turkey's rising defense and diplomatic collaboration with Pakistan, including the provision of Turkish drones employed by Pakistan against India, has further escalated tensions.
Key Developments
 
Extent of Turkish Investments in India
  • Turkish companies operate in a minimum of five Indian states-Gujarat, Maharashtra, Uttar Pradesh, Jammu & Kashmir, and Delhi-in areas such as construction, manufacturing, aviation, metro rail, and IT.
  • The bilateral trade stood at $10.4 billion in FY24, while Turkey is placed 45th in FDI equity inflows to India with $240.18 million between April 2000 and September 2024.
  • Large projects involve metro rail development in Lucknow, Pune, and Mumbai, J&K tunnel projects, and Turkish aviation firms flying at Indian airports.
Government Response
  • The Modi government has launched a detailed review of all existing and previous projects involving Turkish companies, with an emphasis on gathering detailed information on each interaction.
  • Although no official cancellations have been made, a "silent unwind" of business relationships is in progress, with the potential to end or not renew some agreements.
  • Long-term MoUs and trade agreements are being questioned, although some will be exempted because they are strategic or contractual in nature.
Public and Sectoral Impact
  • Boycotts of Turkish products and tourism have gained momentum in India, with travel websites and businessmen discouraging visits to Turkey and suspending the import of Turkish commodities such as apples and marble.
  • Indian educational institutions are also cutting off relations, as witnessed in the case of JNU cancelling its partnership with Turkey's Inonu University on national security grounds.
Defense and Strategic Concerns
  • Turkey's export of Asisguard Songar drones to Pakistan, employed in recent conflicts, has raised security issues in New Delhi.
  • Turkey has imposed a complete embargo on defense-related exports to India since 2024, even though India had invested in Turkish drone technology in the past.
  • India's exports of engineering goods to Turkey-some of which will be employed in Turkish drone production-are being reviewed, and there are questions about future trade in sensitive areas.
Implications and Outlook
  • The rethink represents a decisive change in Indian foreign policy, where strategic concerns take precedence over economic relations with nations seen as not being helpful or even antagonistic.
  • Incoming investments and partnership with Turkish entities, particularly in sectors of crucial infrastructure and technology, are most likely to receive closer scrutiny or be reduced in scope.
  • The current review is likely to transform India's outreach to not only Turkey, but other countries also falling in line with its rival bloc on fundamental issues of geopolitical import.
Why the Reevaluation?
  • Turkey's criticism of India's cross-border military strikes against terror camps in Pakistan.
  • Ankara's growing alignment with Pakistan, including defense cooperation and backing on the Kashmir dispute.
  • Employment of Turkish drones by Pakistan against India.
What's Under Review?
  • All Turkish business deals and ventures in India, such as those in infrastructure, aviation, and manufacturing.
  • Long-term MoUs and trade agreements, with emphasis on national security and strategic interests.
Immediate Consequences
  • Increased appeals for boycotting Turkish products and tourism.
  • Academic and business relationships being reevaluated or cut off.
  • No official cancelations as yet, but an evident pattern of policy change is in progress.
Economic and Strategic Interests
  • Bilateral trade valued at $10.4 billion in FY24.
  • Turkish FDI amounting to $240.18 million in India since 2000.
  • Sensitive infrastructure projects and technology transfers in jeopardy.
Sources: News18, Moneycontrol, Business Today, Hindustan Times, Times of India, Economic Times

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