Erdogan Visits India: Bilateral Trade and Turkish-Israeli-Indian Energy Cooperation on the Agenda

Turkish Prime Minister Recep Tayyip Erdogan visited India from November 21 to 24, against a background of growing economic ties between the two nations. Erdogan was the first Turkish prime minister to visit India since Bulent Ecevit’s visit in 2000. Erdogan met Indian President Pratibha Patil, Prime Minister Manmohan Singh, and Foreign Minister Pranab Mukherjee. He visited India’s historical and cultural sites and technological centers and held meetings with Turkish and Indian businessmen (www.akparti.org.tr, November 21-24).

Turkish State Minister Mehmet Aydin, Minister of Industry and Trade Zafer Caglayan, and Minister of Energy and Natural Resources Hilmi Guler were part of the Turkish delegation. Earlier this year, Turkish Foreign Minister Ali Babacan and Minister of State for the Economy Kursat Tuzmen visited India, and President Abdullah Gul is expected to go there in the first half of 2009. This busy diplomatic agenda, as the latest of Turkey’s ambitious openings to its neighboring regions, shows that the AKP government considers India a strategic partner and major market in East Asia (Cihan News Agency, November 20).

Also accompanying Erdogan were a large number of Turkish businessmen who explored opportunities for joint projects with their Indian counterparts. The meeting was reminiscent of former President Turgut Ozal’s trips to Central Asia and the Balkans in the early 1990s, which helped facilitate the Turkish business community’s penetration into new markets, making the country more competitive in the global economy.

Throughout his visit, Erdogan underlined the conditions that created a favorable environment for closer economic cooperation between the two countries. First, he noted that Turkey and India shared historical ties and that they had no current political problems with each other (Cihan News Agency, November 21).

As a matter of fact, the Turkish people are sympathetic to the cause of the Kashmiri Muslims; and Turkey has traditionally maintained a close friendship with Pakistan, India’s archrival. Nonetheless, Turkey and India are not parties to a political dispute that might poison economic relations. Since the AKP government came to power in 2002, the trade volume between the two countries has almost quadrupled, reaching $2.6 billion in 2007 (Referans, November 19).

Second, Erdogan emphasized Turkey’s role as a bridge between different continents and civilizations. He also said that Turkey, as a developing economy at the intersection of three continents, provided access to energy, trade and transportation routes, and major markets. He invited Indian businessmen to invest in Turkey and take advantage of the economic opportunities that Turkey provided (Anadolu Ajansi, November 21).

Indian ambassador to Turkey Raminder S. Jassal spoke to Turkish journalists before Erdogan’s visit. His remarks, as well as those of other Indian politicians during Erdogan’s visit, clearly show that the Indians are aware of Turkey’s strategic position in the global economy. Echoing Erdogan’s positive views about the potential for improving bilateral relations, Jassal described Turkey as the “center of energy in the region.” He also outlined various projects that are currently under way as well as Indian companies’ plans to invest in Turkey (Today’s Zaman, November 18).

Erdogan attended a Turkish-Indian business forum in New Delhi, which was sponsored by Turkey’s Foreign Economic Relations Council (DEIK). A report published by the DEIK on the status of trade and economic relations between Turkey and India noted that the major areas of cooperation were energy, tourism, and communications. Turkey seeks to attract a greater share of the increasing foreign investments of Indian firms. The report shows that Indian companies are interested in investing in mining, pharmaceuticals, construction, the automotive industry, energy, communications technology, and sugar production in Turkey. The report also pointed to trade inequality in bilateral relations: Turkey’s exports to India amounted to $545 million from January to September, while its imports reached $1.9 billion (Referans, November 19). It was noted, however, that since Turkey’s imports were mainly raw materials, the imbalance was not a major concern for the Turkish economy (Cihan News Agency, November 20).

During his trip, Erdogan underlined both parties’ willingness to increase the trade volume to $6 billion by 2010. To this end, he said, the two countries had agreed to form a working group that would prepare the groundwork for the establishment of a free-trade zone between India and Turkey (www.ntvmsnbc.com, November 24).

One spectacular joint project concerned energy transportation. India is eager to diversify its energy supplies and seek alternative routes to transport the oil it imports from Russia. Erdogan and Guler noted India’s interest in joining the Turkish-Israeli Med Stream project. The three countries had already started feasibility studies about connecting Turkey’s Ceyhan port to the Red Sea through a undersea pipeline and announced that the project might be completed by 2011 (Sabah, September 13). The project will carry Russian oil from the Turkish port of Samsun on the Black Sea to Ceyhan, feeding the Med Stream pipeline. This alternative could enable India to load Russian crude into tankers at an Israeli port. When the project is completed, it will reduce the transport time to India from 39 to 16 days, while cutting the shipping costs significantly. Guler added that he would meet his Israeli and Indian counterparts in the coming days to discuss this project further (www.cnnturk.com, November 24).

The parties announced that they would increase cooperation in nuclear energy, which is significant given Turkey’s plans to build nuclear power plants and India’s experience in this area. They also noted their determination to join forces in fighting terrorism. Reflecting on their consensus on a broad range of issues, Erdogan said, “Turkey made a strategic decision to develop relations with India in all fields” (Zaman, November 23).