India to re-assess billion-dollar infra, aviation deals with Turkey amid strained ties

PM Modi with Turkish President Recep Tayyip Erdogan. (File photo/PTI)

India's trade relations with Turkey faces new challenges after Ankara backed Islamabad and condemned New Delhi's recent strikes on terror camps in Pakistan and Pakistan-occupied Kashmir (PoK).

Its stance has sparked nationwide calls in India to boycott goods from Turkey and avoid travelling to the country with tourism already taking a hit.

But its not just tourism that will slide south. Behind the scenes, a quiet yet deliberate shift is also underway after Operation Sindoor. The PM Modi-led BJP government is now working systematically to reassess and scrutinise — and in some cases, terminate — Turkish business agreements and projects in India, according to a report by News18.

A senior official, speaking on condition of anonymity, confirmed to News18 that “all projects involving Turkish firms are under scrutiny, government is re-assessing all ties including the ones which ended," adding that the government is currently focused on collecting, compiling detailed data and deeds related to each engagement across the public and private sector projects.

From automobile to IT, metro rail to tunnel – with Turkish firms and companies operate in at least five Indian states – Gujarat, Maharashtra, Uttar Pradesh, Jammu and Kashmir, and Delhi, along with several MoUs signed across sectors. The bilateral trade between the two nations stood at US$ 10.4 billion during FY24.

“Turkey occupies the 45th position in FDI equity inflows into India with a cumulative FDI number of US$ 240.18 million from April 2000-September 2024," a review report, dated February, 2025 by India Brand Equity Foundation (IBEF), a trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India, revealed.

The investments span strategic sectors like construction, manufacturing, aviation, and metro rail infrastructure and also knowledge sharing sectors like education and media.

Turkey has been a trade, construction and technology partner for India for over a decade. However, it's repeated remarks on Kashmir at international forums and its growing alignment with Pakistan have not gone unnoticed in New Delhi.

Talking to News 18, a senior trade expert, working with the ministry said, “All agreements are being scrutinised. But some MoUs or trade deals or project tie ups were done on a long-term basis. They might not be affected following the current geo-political situation. However, the emerging circumstances and Turkey’s continuous interference over the Kashmir issue may adversely affect the growth of investments or any future trade deals."

According to reports, among the key Turkish players in India, there are construction companies involved in metro rail projects in cities like Lucknow, Pune, and Mumbai. A firm, through its joint venture with an Indian industry, has established a manufacturing unit in Gujarat, while another aviation company, seen as a prominent Turkish entity, operates in Indian airports. These are not small footprints – they represent critical infrastructure and public-facing services, a senior official told News18.

Why are relations under strain?

The tensions between India and Turkey began after Ankara openly condemned India's actions against terror infrastructure in Pakistan during its ongoing conflict, especially following 'Operation Sindoor'.

The Turkish Foreign Ministry labelled India's airstrike as a "provocative" action and cautioned about the possibility of a major conflict. India has discovered that Pakistan is utilizing Turkish-manufactured Asisguard Songar drones, according to a Times of India report.

Pakistan's use of Turkish drones in attempts to target Indian military installations further added fuel to the fire.

"Our integrated air defence (AD) systems stood like a wall and they (Pakistan) could not breach it. Whether it's a Turkish drone or anything else, it fails in front of the technology of India," director general of air operations had earlier said at a meeting.