The spokesperson for India's Ministry of External Affairs had a sharp critcism for Turkish President Recep Tayyip Erdoğan's comments on Kashmir inside Pakistan's Parliament

Erdogan said he would return Pakistan's favour of helping Turkey during its fight for independence that he likened to the situation in Kashmir.

There is a lot at stake in terms of trade for India. Turkey is one of the few countries to which India exports more than it imports.

Indian government may insist all is well in Kashmir but at the same time, the issue is turning out a diplomatic headache for the Narendra Modi government in New Delhi. Turkish President Recep Tayyip Erdoğan's comments inside Pakistan's Parliament has led to a sharp rebuke from India's Ministry of External Affairs saying Erdogan has shown he neither understands history nor the conduct of diplomacy.

Aside from diplomatic ties between the two countries, what is also at stake in the standoff is exports worth over $4 billion a year.

The war of words may threaten trade ties between the two countries that got a big boost after Erdogan's visit in May 2017. Indian exports turkey have risen from a little over $650 million in 2015 to over $4.3 billion in the first nine months of 2019, according to official data from Istanbul.

Some of the key stakeholders who will be hurt by the freezing of trade or investment, if at all, include oil products exporter Reliance Industries, owned Asia's richest man Mukesh Ambani, the TATA Group, and the Mahindra Group to name a few.


Erdogan had earlier criticised India at the United Nations General Assembly in September 2019. Turkey was one of the four countries taking Indian on, Pakistan, China, and Malaysia were the other three. Right after that speech, a $2.3 billion ship building contract from the Indian Navy to a Turkish company, Anadolu Shipyard, was put on hold without any explanation.

Turkish Investments In India And Vice Versa

Currently, contractors from Turkey have projects worth $430 million underway in India. These include "the Lucknow subway construction, the Mumbai subway construction, a railway tunnel construction in Jammu Kashmir and various housing projects.," the Turkish Ministry of Foreign Affairs said.

For instance, Gulermak, one of Turkey's leading engineering and construction services company, has the contract for metro rail projects in Lucknow and Pune. The Pune contract has been given by a TATA Group company, TRIL Urban Transport and Siemens.

There are 150 Indian companies employing 5,000 people in Turkey. About 40 of these companies are active in production, services and agriculture, according to data from the Embassy of India in Ankara, a September 2019 report said. Mahindra & Mahindra acquired a Turkish tractor maker Erkunt Traktor Sanayii for an enterprise value of $117 million (₹735 crore) in 2017.

Other Indian companies that have a thriving business in Turkey include Polyplex, GMR Infrastructure, TATA Motors, Reliance Industries, Jain Irrigation, Wipro and Dabur, according to a 2015 EXIM Bank report.

Stock17-Feb
Reliance Industries-0.61%
Tata Motors0.53%
Mahindra & Mahindra0.29%
Polyplex2.66%
GMR Infra-1.95%
Wipro0.39%
Dabur0.87%

Turkish consumer appliances maker Arcelik has a manufacturing plant in Sanand, Gujarat, with Tata Group-owned air-conditioning giant Voltas. The two companies together have invested about₹700 crore so far and intend to triple it in the days to come, according to a report earlier this month.

Indian packaging material maker Polyplex has a manufacturing plant in Corlu, from where it supplies to markets in Europe.

Other Turkish companies that have presence in India include Limak Construction, Fernas, Sarar, Soktas, Izopoli-Kingspan, and Hidromas.

This is nowhere close to an exhaustive list.

The Standoff Has Been Escalating Since September

Turkey was the first to rake up a issue that India hates discussing outside its borders. On Friday (February 14), President Erdogan said the suffering of the Kashmiri people had worsened in recent years due to the taking of "unilateral steps" inside the Pakistan Parliament.

He was referring to the suspension of the Indian state's 'special status' and the infamous lock down and internet shutdown that followed to keep things under control in the Kashmir valley. The response from India was equally sharp. "India has made a strong demarche with Turkish Govt on remarks made by President Erdogan on Indian Union Territory of Jammu&Kashmir during his recent visit to Islamabad," Raveesh Kumar, the spokesperson for India's Ministry of External Affairs, said on February 17.

India has always maintained that the strife in Kashmir is a matter between the government and its people and not a 'bilateral' border dispute with Kashmir. However, India and Pakistan have fought three wars in the last seven decades over the Kashmir issue.

These comments will also set the context for Donald Trump's visit to India. The US President has repeatedly offered to mediate between India and Pakistan but India has resisted it. While it is not clear whether India's diplomacy will be offensive or defensive, business owners like the Tatas and Mahindras will remain anxious.

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