Population (2019): 83,429,615
GDP (2019): US$ 754.4 billion
World Bank “Ease of Doing Business” Rank (2019): 33
Bilateral Trade (2019-20): US$ 7.09 billion
Turkey’s economic growth rebounded after the global financial recession, with an average annual growth of over 6% from 2010 through 2016. With healthy long-run growth prospects, it is projected to be the world’s 11th largest economy by 2050, ahead of countries such as France and Saudi Arabia, on the back of a 3% average annual growth rate.
Gateway to the region
Turkey enjoys strong historical, cultural and economic ties with countries in the neighbouring regions of Southern Europe, the Commonwealth of Independent States (CIS) and the Middle East. Indian companies can tap these linkages to expand into nearby countries, either by using Turkey as a hub or by partnering with Turkish companies.
To achieve the goals of Turkey’s 2023 Vision, various economic, social and infrastructure improvements are underway. By 2023, Turkey aims to achieve a GDP of US$2 trillion, up from US$820.8 billion in 2013. It also hopes to achieve a per capita income of US$25,000 and reduce unemployment to 5%.
- A third airport in Istanbul that is expected to be the busiest airport when completed in 2027 with six runways and four terminals.
- An approximately US$15 billion New Istanbul Canal to be built to link the Black Sea and the Sea of Marmara.
- A US$2.5 billion luxury high-rise that includes a hotel, a new mall, office space, and a spacious performing arts centre.
With rising affluence and a growing number of internet users, consumer electronics will continue to be an important sector of Turkey’s economy. Smartphones and audio-visual products such as digital cameras and video devices form the bulk of consumer electronics purchases, and have seen consistent growth in sales volume. Online retailing has contributed greatly to consumer electronics sales. Such products account for the largest share of e-commerce transactions in Turkey.
Turkey has become one of the fastest growing energy markets in the world. The Turkish Electricity Transmission Company estimates that the country’s demand for electricity will increase at an annual rate of 6% between 2009 and 2023.
An estimated US$130 billion in investments is needed to meet Turkey’s rising energy demand until 2023. The Turkish government is encouraging investors to step in and implement energy projects, with particular incentives for renewable energy.
Proper waste water treatment is still not widespread in Turkey. Under the Wastewater Treatment Action Plan 2023, the government aims to have a total of 2,154 waste water treatment plants by 2023, up from 653 in 2015. Existing plants and sewer systems will also be renovated, and new sewer systems will be built. All of this represents significant opportunities for Indian firms with expertise in this area.
Turkey’s current waste management infrastructure is insufficient for the country’s needs. Over 30 million tonnes of waste is produced annually, with the majority going to municipal waste storage facilities and landfills.
In 2015, the European Bank for Reconstruction and Development launched the US$125 million Near-Zero Waste initiative in Turkey. This aims to fund up to 12 investments in areas such as waste recycling and biomass facilities. As Turkey continues to tackle this issue, further opportunities will open up for Indian firms with expertise in waste management.
Key cities such as Istanbul are starting to face land constraints in the face of rapid development and are looking to develop waste-to-energy plants as existing landfills near full capacity. In 2017, Swiss firm Hitachi Zosen Inova AG was awarded a contract to build a 70MW waste-to-energy plant in Istanbul, set to be the largest in Europe.
The manufacturing sector contributes about 18% of Turkey’s GDP. Turkey’s young and skilled labour force makes it a preferred hub for manufacturing and export. For instance, many MNCs such as Toyota, Ford, Hugo Boss and Nestle have identified Turkey as their production hub. Indian companies in the manufacturing industry can consider venturing into this market and seize the opportunity to access the local as well as the Middle Eastern and European market.
In addition, Turkey’s large production base, access to high quality raw materials and competitive prices make it a prime sourcing destination. The country exports US$168 billion worth of goods which include motor vehicles, trailers, basic metals, machinery and equipment, textiles, apparel, fur, food products and beverages, metal products and furniture.
India-Turkey economic and commercial cooperation constitutes an important dimension of the bilateral relationship. 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. The 10th session of the JCETC was held in New Delhi in January, 2014. The Indian delegation was led by Shri Anand Sharma, the then Minister of Commerce and Industry of India and the Turkish Delegation by Mr. Nihat Zeybekci, Minister for Economy of the Republic of Turkey. The 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.
Mr. Adnan Yildirim, Deputy Minister of Economy, led a delegation of the Turkey Exporters Council to Mumbai on 6-9 April, 2015 to participate in the Turkey-India Business Forum. On 6 April 2015, Confederation of Indian Industry (CII) signed an MoU with the Union of Chambers and Commodity Exchanges of Turkey (TOBB) to promote bilateral trade and economic cooperation. TOBB also signed a cooperation agreement with FICCI for establishing India-Turkey Working Committee and Investment Forums. On 6 August 2015, State Bank of India and Turkey’s Akbank entered into a cooperation agreement to support bilateral trade and investments.
During his visit to India (April 30-01 May, 2017) President Erdogan was accompanied by a 150-member business delegation. An India-Turkey Business Forum meeting was organized. Prime Minister Modi and President Erdogan addressed the Forum.
In 2013 ONGC Videsh Ltd acquired 2.72% in the Guneshli Fields ACG and 2.3% interest in the associated Baku-Tblisi Ceyhan (BTC) pipeline. Drug firm Sequent Scientific in December, 2015 with its subsidiary Alivira Animal Health acquired the Turkey based firm, Topkim for 20.7 million Turkish Lira (over Rs. 37 crore). India’s Punj Lloyd and Turkey’s Limak Holding are constructing a section of the Trans-Anatolian Pipeline (TANAP) project. The total length being constructed is approx. 459 km, expected to be completed by 2018. Dr. Reddy’s Laboratories entered into collaboration with TR-Pharm to manufacture and commercialize a portfolio of biosimilar drugs in Turkey in March, 2016. Medical technology firm Trivitron Healthcare has acquired 60 per cent stake in Turkish firm Bome Sanayi Urunleri Dis Tic Ltd Sti. In June 2016, Zydus Cadila signed a strategic collaboration agreement with Eczacibasi Ilac Pazarlama AS, a Turkish healthcare company, to market biotech products in Turkey. On 21 December 2016, the Reserve Bank of India signed a Memorandum of Understanding (MoU) on “Supervisory Cooperation and Exchange of Supervisory Information” with Banking Regulation and Supervision Agency of Republic of Turkey.
IOT Infrastructure & Energy Services, a joint venture between Indian Oil Corporation and Oiltanking GmbH, is collaborating with VITO Energy and Investment of Turkey for erection of joint tank farm at the Star Refinery (near Izmir). The USD 72.30 million project started in August 2015 and is expected to be completed in 2017. Mahindra & Mahindra Ltd. announced on 20 January 2017 that they had acquired a 75% equity stake in Hisarlar Makina Sanayi ve Ticaret Anonim Sirketi (Hisarlar), a farm equipment company in Turkey, investing about USD 19 million in it. In May 2017, Voltas and Turkish company Arcelik agreed to set up a joint venture company in India with equity capital of USD 100 million for launching white goods and domestic appliances in India. Jet Airways and Spicejet entered into agreements with the Turkish TCI Cabin Interior under which the latter will design and manufacture galleys of the new B737 Max aircraft of the two airlines. Mahindra & Mahindra Ltd announced its second foray into Turkey in September 2017 through the acquisition of Erkunt Traktor, the fourth largest tractor brand in Turkey reportedly for $ 76 million (INR 478 crore). Mahindra also acquired a foundry unit, Erkunt Sanayi A.S., buying between 80% and 100% stake in it for $ 41 million (Rs.257 crore).
Shri Yudhvir Singh Malik, Secretary, Ministry of Road Transport and Highways (MORTH) and Shri Deepak Kumar, Chairman, National Highways Authority of India visited Turkey on 23-25 November 2017 and made a presentation on investment in the roads and highways sector in India at a seminar organized by the Turkish Contractors Association (TCA).
Bilateral India-Turkey trade has increased significantly in the preceding decade and a half. The major Indian exports to Turkey include: medium oils and fuels, man-made filaments and staple fibres, automotive spare parts and accessories, organic chemicals etc. Turkey’s exports to India include: broken/unbroken poppy seeds; machinery and mechanical appliances, iron and steel articles thereof, inorganic chemicals, pearls and precious/semi-precious stones and metals (including imitation jewellery), marble, etc.
Minerals, machinery, organic chemicals, man-made filaments, vehicles, electrical machinery, tanning and dyeing extracts, plastics and articles, precious pearls and stones, staple fibre.
|Product Code||Product Label||India’s imports from Turkey in 2019 (Value in US$ millions)|
|27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral||964.24|
|84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||373.30|
|54||Man-made filaments; strip and the like of man-made textile materials||305.70|
|87||Vehicles other than railway or tramway rolling stock, and parts and accessories thereof||304.05|
|85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television||287.64|
|32||Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring||219.18|
|39||Plastics and articles thereof||209.67|
|71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad||195.23|
|55||Man-made staple fibres||160.97|
According to ITC Trade Map, India currently has an untapped export potential of US$ 3.3 billion with Turkey led by aluminium, cotton and jewellery.
|Product code||Description||Untapped export potential|
|760110||Aluminium, not alloyed, unwrought||US$ 109.3 million|
|520100||Cotton, not carded/combed||US$ 267.7 million|
|711319||Jewellery, of precious metal, nes||US$ 276.3 million|
|320416||Synthetic organic reactive dyes & preparations||US$ 56.9 million|
|760110||Aluminium, not alloyed, unwrought||US$ 126.4 million|
|3004Xb||Medicaments consisting of mixed or unmixed products, for retail sale||US$ 147.6 million|
|8703XX||Motor vehicles for the transport of persons, nes||US$ 95.6 million|
|120740||Sesamum seeds||US$ 103.5 million|
|720839||Flat-rolled products of iron or non-alloy steel||US$ 85.6 million|
Minerals, machinery, inorganic chemicals, salt, precious pearls and stones, iron and steel, oil seeds, edible vegetables and roots, plastics and electrical machinery.
|Product Code||Product Label||India’s imports from Turkey in 2019 (Value in US$ millions)|
|27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral||924.77|
|84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||282.94|
|28||Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals||163.38|
|25||Salt; sulphur; earths and stone; plastering materials, lime and cement||160.82|
|71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad||70.70|
|72||Iron and steel||58.96|
|12||Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal||55.23|
|7||Edible vegetables and certain roots and tubers||42.67|
|39||Plastics and articles thereof||40.27|
|85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television||39.14|