How Will Turkey Earthquake Impact India's Foreign Trade?
The port of Iskenderun, one of the largest container ports in the region, remains closed following damage from the earthquake.
Exports to Turkey, the twelfth largest destination for Indian shipments, have taken a hit as the earthquake that country hampered demand and damaged ports.
Exports to Turkey at $7.29 billion in April-December comprised 2.2% of India's total merchandise shipments, according to government data. India imported goods worth $3.23 billion, or 0.6% of inbound shipments, from Turkey during the period. Which means the country enjoys a merchandise trade surplus of $4.06 billion in the current fiscal with Turkey.
Following the recent earthquake in Turkey and Syria, the port of Iskenderun remains closed until further notice due to significant damage at the terminal. The critical factor will be how soon Turkey's port system resumes clearances at normal speed, according to a research note by think tank GTRI.
Iskenderun is one of the largest container ports in the Eastern Mediterranean region, with a capacity of over 1 million twenty-foot equivalent per year and dry bulk capacity of 2.5 million metric tonnes a year, according to S&P Global Commodity Insights.
It is not yet known when a full inspection will take place to understand the extent of the damage and affected containers, Danish shipping company Maersk said in its Feb. 13 update. Iskenderun port sustained significant damage from the earthquake and a subsequent fire broke out in containers at the terminal, that was eventually brought under control of local authorities, it said.
"At this time, we are not accepting any new bookings to and from Iskenderun—including contract bookings," Maersk said.
Arun Kumar Garodia, chairman of the Engineering Export Promotion Council, said trade with Turkey in February and March is bound to take a hit, before recovery starts.
Key Exports And Imports
Petroleum oils comprised India's largest exports to Turkey at $2.7 billion in April to December. Demand for diesel and automobiles will increase as the post-reconstruction phase requires more cars, parts, and fuel, the note by GTRI said.
Demand for significant flat rolled products and strips, aluminium ingots, and ferromanganese will increase as the reconstruction of the building and industrial centers start, it said. Exports of medicine, rice, wheat and sugar too are likely to see a rise due to a sudden demand because of the earthquake.
Export of yarns, dyes, cut and polished diamonds, and jewellery may fall, according to GTRI.
Over time, trade with Turkey is expected to improve and exceed levels before the earthquake, Garodia said. India's external relations with several countries continue to improve because of the government's affairs, he said. Besides, India has extended considerable help to Turkish authorities after the earthquake and has garnered immense goodwill, he said, adding that's likely to help India's traders.