New Delhi: Turkey’s repeated comments on Kashmir at international forums and its growing alignment with Pakistan have caught the attention of New Delhi, prompting a strategic reassessment of bilateral economic ties.
Turkish firms currently operate across at least five Indian states — Gujarat, Maharashtra, Uttar Pradesh, Jammu & Kashmir, and Delhi — with investments spanning sectors such as automobile, IT, metro rail, and tunnel infrastructure. The bilateral trade between India and Turkey stood at a substantial US$10.4 billion during FY24.
According to a February 2025 report by India Brand Equity Foundation (IBEF), Turkey ranks 45th in Foreign Direct Investment (FDI) equity inflows into India, with a cumulative investment of US$240.18 million from April 2000 to September 2024. These investments cover strategic industries including construction, manufacturing, aviation, and metro rail infrastructure, as well as knowledge sectors like education and media. Numerous Memoranda of Understanding (MoUs) have been signed between the two nations over the last decade, covering areas from trade in poppy seeds to cooperation in telecommunications, culture, education, media, and diplomacy.
However, following India’s Operation Sindoor, a quiet but deliberate shift is underway. The Modi government is systematically reassessing and scrutinizing, and in some cases terminating, Turkish business agreements and projects in India.
A senior government official, speaking anonymously, confirmed that “all projects involving Turkish firms are under scrutiny. The government is reassessing all ties, including past engagements.” Efforts are underway to compile detailed data on every project, both public and private. For instance, in 2020, a Turkish company was awarded the electromechanical contract for the Atal Tunnel in Jammu & Kashmir, and in 2024, Rail Vikas Nigam Limited (RVNL) signed an MoU with another Turkish firm for a metro rail project.
Shifting Diplomatic Grounds
Turkey has been a trade, construction, and technology partner of India for over a decade, but rising geopolitical tensions have forced New Delhi to reconsider the relationship. Turkey’s frequent remarks on Kashmir and its increasing alignment with Pakistan have not gone unnoticed. While India’s government traditionally preferred a cautious, low-key response, this approach has now changed, particularly after Operation Sindoor.
A senior trade expert associated with the Ministry of Commerce told News18, “All agreements are being scrutinized. Some long-term MoUs or projects may continue unaffected, but Turkey’s ongoing interference on Kashmir is likely to impact future investments and trade.”
Among Turkey’s notable Indian operations are construction firms involved in metro rail projects in Lucknow, Pune, and Mumbai. Turkish companies also operate manufacturing units in Gujarat and aviation services at Indian airports — significant footprints in India’s critical infrastructure.
The 2017 visit of Turkish President Recep Tayyip Erdoğan to India saw a wave of cooperation agreements, including media collaborations and diplomatic training partnerships. Yet, nearly eight years later, these promises have given way to economic distancing fueled by geopolitical divergence.
Quiet Exit from Strategic Partnerships
The Modi government has opted for a low-profile strategy. While no official cancellations have been declared yet, the intent to realign economic partnerships to better reflect India’s core strategic interests is clear. As India asserts itself on the global stage, economically viable but strategically misaligned partnerships, such as those with Turkey, may quietly be phased out.
This reassessment signals a broader shift in India’s foreign economic policy, where geopolitical considerations increasingly shape trade and investment decisions.
