Erdoğan’s Pakistan Gamble: Turkey’s Economic and Diplomatic Peril Amid India’s Wrath

By Alok Lahad
ISTANBUL, May 24, 2025: Turkey’s economy reels from India’s fierce boycott, sparked by President Recep Tayyip Erdoğan’s decision to arm Pakistan with drones after the 2025 Pahalgam attack, killing 26 Indian tourists. Rooted in Erdoğan’s neo-Ottoman vision to lead the Islamic world, this move cost Turkey USD 510–640 million annually in trade and services. India’s USD 10.43 billion market dwarfs Pakistan’s USD 1.1 billion, exposing Erdoğan’s strategic blunder. As Indian traders shun Turkish goods, universities sever ties, and aviation partnerships teeter, Turkey faces isolation. With Erdoğan’s family stakes at risk, India must calibrate punitive measures to maximize pressure without burning bridges, balancing national pride with long-term diplomacy.

Historical Ties: A Complex Legacy

India-Turkey relations trace back to the Vedic age, with cultural exchanges predating 1500 BCE. Medieval ties saw Ottoman aid to Gujarat and Bijapur against Portuguese rule, but Mughal dominance strained relations, as the Ottoman caliphate felt threatened. In the 20th century, Indian Muslims supported Turkey’s War of Independence, and Gandhi opposed harsh post-WWI terms. Diplomatic ties, established in 1948, were cordial but limited by Cold War alignments—India’s non-alignment versus Turkey’s NATO role. Turkey’s Pakistan support, especially on Kashmir, remains a persistent irritant, exacerbated by India’s backing of Armenia, Greece, and Cyprus.

Trade Dynamics: Turkey’s Greater Loss

In 2023–24, bilateral trade reached USD 10.43 billion, with India exporting USD 6.65 billion (pharmaceuticals, auto parts) and importing USD 3.78 billion (marble, apples). India’s USD 2.87 billion surplus and 300,000 tourists (USD 360–480 million) give it leverage. Turkey’s tourism (10–12% GDP) and export sector (0.5% of India’s imports) have become vulnerable. India’s boycott—slashing marble (70% supply, INR 2,500–3,000 crore) and tourism (60% booking drop)—costs Turkey USD 510–640 million. India can easily source alternatives (Italy, Iran), while Pakistan’s USD 1.1 billion trade offers Turkey little relief. Turkey’s USD 240.18 million FDI and USD 77.6–141.2 million earnings in India are at risk, making it the bigger loser.

Erdoğan’s Regime and Neo-Ottomanism

Turkey’s hybrid regime blends elections with authoritarianism. Erdoğan’s Justice and Development Party (AKP), dominant since 2002, consolidated power via a 2017 presidential system, giving him power to appoint judges and issue decrees. The 2025 arrest of Ekrem İmamoğlu sparked protests (79% support), signaling dictatorial drift. With 90% media control and 200+ jailed journalists, Erdoğan prioritizes survival. His neo-Ottomanism, leveraging Turkey’s Hanafi Sunni majority (78%), seeks Islamic leadership, challenging Saudi Arabia and Qatar. Despite 48.6% inflation and 0.2% GDP contraction, Baykar Defence’s drones project power, but Pakistan’s alignment risks economic fallout.

Turkey’s Pakistan Support

Erdoğan’s vocal support for Pakistan, especially its support on Kashmir on international fora and framing India as a Muslim oppressor at the UN and OIC has a purpose. Turkey has now become Pakistan’s second-largest arms supplier after China. It provides Pakistan with drones, naval assets, and training. The 2022 trade agreement targets USD 5 billion, but 2024’s USD 1.1 billion trade pales against India’s USD 10.43 billion. Post-Pahalgam, Baykar supplied 350+ Asisguard Songar, TB2, and Akinci drones (USD 100 million–1.3 billion), with operatives aiding Pakistan. This enriched Erdoğan’s son-in-law Selçuk Bayraktar (52.5% stake, USD 1.2 billion) but provoked India’s wrath, escalating tensions.

India’s Aid, Turkey’s Thanklessness

In 2023, Turkey’s devastating earthquake prompted India’s Operation Dost, delivering USD 5 million, medical supplies, and NDRF teams via C-17 Globemasters. This humanitarian gesture, celebrated by India’s empathetic populace, fostered goodwill. Turkey’s post-Pahalgam military aid to Pakistan, including drones and operatives, was seen as a betrayal, sparking outrage. Social media amplified calls for boycotts, with hashtags like #BoycottTurkey trending. This perceived thanklessness transformed India’s response into a national movement, intensifying economic and cultural retaliation.

India’s Multipronged Boycott

India’s boycott targets Turkish goods and services came from its Traders. Their decision to not buy Marble (70% supply, INR 2,500–3,000 crore) and apples (INR 1,000–1,200 crore) has cost Turkey USD 460–540 million. Tourism collapsed, with a 60% booking drop and 250% cancellation surge, slashing USD 1.65 billion. Universities like JNU, Jamia Millia, and CSJMU suspended MOUs with Turkish institutions, citing national security. Turkish firms face losses:

Çelebi Aviation: Lost USD 200 million in contracts at nine airports, linked to Sümeyye Erdoğan’s alleged 20% stake.

Limak/Doğuş: USD 430 million infrastructure contracts risk USD 43–86 million profits.

Koç/Arcelik: Appliance profits (USD 5–10 million) face halving.

The Confederation of All India Traders endorsed shunning Turkish products, amplifying economic pressure.

Operation Sindoor’s Drone Devastation

Operation Sindoor, India’s response to Pahalgam, decimated Turkey’s drone industry, a USD 5.5 billion export sector post-Russia-Ukraine war. India’s modified anti-aircraft guns downed 300–400 Songar, TB2, and Akinci drones, exposing Baykar’s vulnerabilities. This slashed Baykar’s USD 2.3 billion valuation, threatening Selçuk’s wealth and Turkey’s defense credibility among 30 client nations. The financial and reputational blow undermines Erdoğan’s neo-Ottoman ambitions, highlighting India’s military edge and strategic resolve.

Turkish Intellectuals’ Caution

Turkish scholars like Muddassir Quamar and Prasanta Kumar Pradhan argue Erdoğan was ill-advised to back Pakistan, urging neutrality to preserve USD 10.4 billion trade ties. They caution India against permanent estrangement, citing Turkey’s G20 role and cultural links. However, India’s strategic autonomy demands reciprocity, unlikely without Turkey decoupling from Pakistan. Intellectuals’ pleas reflect Turkey’s economic fears but lack leverage amid India’s nationalist surge.

IndiGo-Turkish Airlines Alliance

Since 2018, IndiGo’s codeshare with Turkish Airlines, using two leased widebody aircraft, connects 40+ European/US destinations, serving 300,000 Indian travelers (2024). IndiGo defends it for affordability and jobs, generating USD 16.7 billion in Turkish Airlines’ 2024 revenue. Air India, citing security risks and Turkish Airlines’ disproportionate gains, lobbies to end the lease, expiring May 31, 2025. The aviation ministry’s review, backed by BCAS, may terminate it, reflecting geopolitical tensions. Critics on Social media amplified calls, amplify calls to sever ties.

India’s Punitive Strategy

India should escalate targeted measures to pressure Turkey while preserving diplomatic flexibility:

Aviation Restrictions: Ban Turkish Airlines from Indian airspace, forcing longer Southeast Asia routes, costing USD 100–200 million annually. This leverages India’s strategic location without fully severing ties.

Trade Sanctions: Impose 20–30% tariffs on Turkish marble and apples, redirecting imports to Iran and Italy. This could cut Turkey’s exports by USD 200 million, hitting its trade balance.

Defense Diplomacy: Strengthen ties with Armenia, Greece, and Cyprus, offering anti drone technology to counter Turkey’s regional influence. This aligns with India’s multi-alignment strategy.

Public Diplomacy: Amplify Turkey’s thanklessness via global media, isolating Erdoğan diplomatically. Risks include Turkey’s retaliation via Pakistan or OIC, but India’s USD 3.9 trillion economy and G20 clout mitigate fallout. These measures balance punishment with pragmatism, avoiding irreversible escalation.

Long-Term Outlook

India’s USD 3.9 trillion economy and BRICS/G20 influence dwarf Pakistan’s USD 7 billion defense budget. Turkey’s Pakistan alignment risks Western isolation as India deepens US/EU ties. Erdoğan’s gamble, costing USD 14.3–29.6 million in family stakes, may destabilize his regime amid İmamoğlu protests. Reconciliation hinges on Turkey decoupling from Pakistan, unlikely under Erdoğan’s pan-Islamist agenda. India must sustain pressure while engaging Turkish moderates, ensuring economic leverage and moral high ground shape a favorable resolution.

Senior Journalist and News Analyst Mr. Alok Lahad is Group Consulting Editor (European Affairs) of Global Governance News. Research Scholar and Hispanist. Writes on Indian and European affairs Geopolitics from Barcelona, Spain.