Indian boycott expected to aggravate further the dire economic situation of Turkish citizens

By John Solomou

Nicosia [Cyprus], May 21 (ANI): The widespread boycott call by Indian citizens and businesses on Turkish products and services, which was caused by Turkey’s blatant support of Pakistan in the conflict that erupted after Operation Sindoor is expected to aggravate further the dire economic problems faced by ordinary Turks due mainly to rampant inflation and the devaluation of the Turkish Lira.

Turkey’s President Recep Tayyip Erdogan, who has always supported Pakistan’s claims in Kashmir, rportedly supplied more than 350 drones and some military operatives to Pakistan during the conflict.

In a message to Pakistani Prime Minister Shehbaz Sharif, Erdogan reiterated his support for Pakistan saying, “As in the past, we will continue to stand by you in good times and bad in the future."

This uncalled-for intervention in a conflict far away from Turkey’s borders in which Ankara has absolutely no reason to get involved as well as its attempt to change its outcome, by helping to coordinate Pakistani drone strikes on India, has greatly angered the Indian people and businessmen who decided to stop importing goods and services from Turkey and sever business relations with Turkish traders and manufacturers.

Already, major tourist platforms reported a 60 per cent reduction in bookings by Indians in holidays in Turkey and a more than 250 per cent increase in cancellations. As in 2024 this number stood at 3,30,100 visitors, the cancellations could mean dozens of millions in lost revenue.

According to Indian Brand Equity Foundation, India’s imports from Turkey stood at USD 3.78 billion in 2023-24. Furthermore, the Indian government has cancelled a USD 2.3 billion shipbuilding deal. Also, Turkish Firms like Celebi Aviation that operate ground handling at key airports would be replaced by local or international partners from other countries, while Turkish contractors will be gradually phased out from public works in India.

It should be mentioned that according to the United Nations COMTRADE database on international trade in 2024, Turkish exports to Pakistan amounted to USD 918.22 million, and cannot compensate for the loss of exports to India.

Undoubtedly, the boycott will deprive Turkey of desperately needed foreign exchange and trade with one of the world’s biggest economies and strain its diplomatic ties with India, but it will also affect other important sectors such partnerships between Turkish and Indian universities, like the Jawaharlal Nehru University, Jamia Millia Islamia University and Kota University.

There is no doubt that the Turkish economy is facing one of the most serious economic crises in Turkey’s recent history, with extremely high inflation, while the Turkish Lira has sunk to unprecedented lows. Ordinary people find it very hard to buy food and pay the skyrocketing rents prevailing in major towns and are becoming increasingly desperate.

According to the latest real estate rent index calculated by the OECD based on March results, rental fee inflation in Turkey recorded the highest rate among OECD members reaching 96.25 per cent in the first quarter of this year compared to the previous quarter.

Erdogan’s misguided economic policies, such as his insistence on keeping interest rates unrealistically low, his public spending spree and his penchant for constructing mega projects- which he always awards to his cronies – as well as his government’s disastrous intervention in markets, have depleted the country’s foreign exchange reserves and state coffers.

The Turkish lira has fallen to a new record low of 38.7 per USD as investors worry about the country’s political and economic outlook, while Turkey’s Central Bank continues to intervene in the foreign exchange market to stabilize the currency. The sharp depreciation of the Turkish Lira, instead of boosting exports as Erdogan hoped, has only contributed to a loss of real wages and a declining standard of living for the Turkish people.

It is noted that last March the Lira fell to a record low of 40 to 1 USD following the arrest on trumped-up charges of Istanbul’s popular Mayor Ekrem Imamoglu, President Erdogan’s main political rival, who continues to be in jail. The incident triggered the largest protests in Turkey in a decade and raised worries about deepening political instability.

Major credit agencies such as Moody’s, Fitch and S&P have downgraded Turkey’s sovereign debt rating to near junk status, warning of heightened risks of default.

As Erdogan’s follows unorthodox economic and monetary policies, foreign direct investment (FDI), which used to be a strong pillar of the Turkish economy, has plummeted and foreign firms which in the past considered Turkey as an attractive market are now quite reluctant to invest.

According to official figures released by the Turkish Statistical Institute (TUIK) annual consumer price inflation slowed to 38.01 per cent in March 2025, down from a peak of around 75 per cent in May of the previous year. However, independent institutes as well as many citizens believe that in reality, inflation is much higher than that.

For the majority of ordinary Turks, as a result of high inflation and the devaluation of the currency, which makes imported goods much more expensive, necessities such as food, fuel and housing have become increasingly unaffordable.

Erdogan’s insistence on implementing his unorthodox monetary policies and the Indian boycott of Turkish products triggered by Ankara’s intervention in the conflict between India and Pakistan will undoubtedly make the life of ordinary Turks much more difficult. (ANI)

(The story has come from a syndicated feed and has not been edited by the Tribune Staff.)

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