India is undertaking a comprehensive review of its billion-dollar business engagements with Turkish firms, spanning sectors from metro rail and tunnel construction to IT and aviation, as geopolitical frictions with Ankara intensify. The reassessment, driven by the Modi government, follows Turkey’s repeated remarks on Kashmir at international forums and its growing alignment with Pakistan, particularly underscored by the fallout of Operation Sindoor.
Turkish President Recep Tayyip Erdogan met Pakistani Prime Minister Shehbaz Sharif hours after the Pahalgam attack, a move seen as a strong signal of solidarity with Pakistan. While Turkey initially condemned the attack as a “terrorist act,” its subsequent actions drew scrutiny. On May 7, 2025, Turkey expressed support for Pakistan following India’s Operation Sindoor, with Erdogan describing India’s strikes as an “unprovoked violation of Pakistan’s sovereignty” and offering condolences for “martyred” civilians.
Pakistan’s military escalation against India, particularly on the night of May 8–9, 2025, involved the unprecedented use of 300–400 Turkish-made drones targeting military and civilian infrastructure across 36 locations, from Leh in Ladakh to Sir Creek in Gujarat. The Indian government confirmed that these drones, primarily Asisguard Songar models, were used for surveillance, target designation, and, in some cases, kamikaze-style attacks. Preliminary forensic analysis of drone debris also identified Byker YIHA III kamikaze drones, which struck civilian areas, including a residential neighbourhood in Firozpur, Punjab, injuring a family of three.
This strategic shift between India and Turkey could reshape a bilateral trade relationship valued at US dollar 10.4 billion in FY24, with significant implications for Turkish investments and projects across at least five Indian states, Gujarat, Maharashtra, Uttar Pradesh, Jammu & Kashmir, and Delhi.
According to a February 2025 report by the India Brand Equity Foundation (IBEF), a trust under the Ministry of Commerce and Industry, Turkey ranks 45th in foreign direct investment (FDI) equity inflows into India, with a cumulative FDI of US dollar 240.18 million from April 2000 to September 2024.
These investments are concentrated in strategic sectors such as construction, manufacturing, aviation, and metro rail infrastructure, alongside knowledge-sharing domains like education and media. Over the past decade, India and Turkey have signed multiple Memoranda of Understanding (MoUs) covering diverse areas, including trade in poppy seeds, telecommunications, culture, education, media, and diplomacy.
However, the Modi government’s approach to these engagements has shifted markedly. A senior official, speaking anonymously with News 18, said that “all projects involving Turkish firms are under scrutiny,” with the government compiling detailed data on public and private sector agreements.
This includes reviewing past and ongoing projects, some of which have been pivotal to India’s infrastructure development. For instance, in 2020, a Turkish company was contracted for the electromechanical components of 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.
The reassessment stems from rising diplomatic tensions, primarily Turkey’s vocal stance on the Kashmir issue and its deepening ties with Pakistan. While Turkey has been a trade and technology partner for over a decade, India’s strategic recalibration began earlier with what insiders describe as a “silent unwind” of bilateral business ties.
“Turkey’s continuous interference over the Kashmir issue may adversely affect the growth of investments or any future trade deals,” a senior trade expert from the Ministry of Commerce told News 18.
While some long-term MoUs and project tie-ups may remain unaffected due to their contractual nature, the government’s intent is clear: partnerships misaligned with India’s core strategic interests face scrutiny, even if economically viable.
Turkish companies have a significant presence in India, operating in critical infrastructure and public-facing services. Construction firms are involved in metro rail projects in cities like Lucknow, Pune, and Mumbai. A Turkish company, through a joint venture with an Indian partner, has established a manufacturing unit in Gujarat, while a prominent Turkish aviation firm operates at Indian airports. These projects represent substantial investments and high-visibility infrastructure, making the reassessment a complex and sensitive process.
The 2017 visit of Turkish President Recep Tayyip Erdogan to India marked a high point in bilateral relations, with agreements signed for media collaboration, diplomatic training partnerships, and other cooperative ventures.
However, eight years later, these promises of synergy are unravelling as geopolitical realities take precedence.
For now, the Modi government has adopted a cautious, low-profile approach, avoiding public announcements of cancellations. No official terminations have been confirmed, but the ongoing scrutiny signals a deliberate economic distancing. “As India asserts itself globally, partnerships that do not align with its strategic interests may face a quiet exit,” the senior official noted.
The reassessment process involves collecting detailed records of each Turkish engagement, from project deeds to financial commitments.
