Erdogan calls for free trade talks with Delhi

Recep Tayyip Erdogan, the visiting President of Turkey, has called for a quick start to negotiations on a free-trade agreement (FTA) with India. Addressing a bilateral business summit alongside Prime Minister Narendra Modi on Monday, he said both trade and investment were way below the potential.

One way to change this, he said is by ditching the US dollar in favour of the currencies from both countries for trade purposes.

The government of Turkey had first suggested an FTA before 2012. Delhi is currently involved in similar negotiations with Australia, Canada, Georgia, the European Union (EU) and the Eurasian Economic Union.

Indo-Turkish trade had shrunk in 2015-16 by 28 per cent to $4.91 billion. Of this, our export to Turkey was $4.1 billion. Their export had fallen 47 per cent in 2015-16; India’s fell by 22 per cent. Both governments have targeted $23 billion worth of trade by 2023.

Bilateral trade so heavily in India’s favour was unsustainable, said Erdogan.

Ömer Cihad Vardan, president of their Foreign Economic Relations Board, said Turkey was actively looking at options to relieve the pressure on its foreign exchange reserves.

The Turkish government is also keen to boost investment, in both directions, dormant for years, said an official. Total inbound investment into India from there over 2000-2016 was $137.1 million or about 0.04 per cent of all such inflow.

According to the Turkish embassy, about 20 companies from there are operating in India, hoping to tap the larger South Asian market. About 210 Indian companies operate in Turkey, their gamut of investment at $110 million, Erdogan said. Turkey straddled both Asia and Europe, he said, and Indian companies could use his country as a hub to extend operations in the EU, with which Turkey has a Customs union, as well as to West Asia and North Africa.

He added that Turkish Airlines was looking at more flights between the two nations. Turkey has also initiated a scheme for tailor-made incentives on investment from other nations. For Indian investors, this might include up to 100 per cent discount in corporate tax, allocation of public property for up to 49 years without rent obligation and free ownership transfer of such property. Also, exemption from paying social security tax for up to 20 years. Modi said the two countries were cooperating in the energy, mining, textile, automobile and food processing sectors. He invited Turkish construction companies to investing in infrastructure and in his government’s smart cities programme.

“You will have my personal care and support,” he said.