~It is a great pleasure to be in the historic city of Istanbul. Your tourist guides tell us that this is the only city in the world, which actually spans two continents. Even in our brief stay in this city, we have seen the impressive claim of this city to the heritage of the East and of the West. We see also the imprint of the many cultures, which have passed through this port, when it was a bustling maritime junction for the Silk Route.

Istanbul has retained its strategic importance for international trade. Today, it is the economic capital of Turkey, handling 40% of its foreign trade and host to half its national wealth. It is therefore a most appropriate setting for this meeting of Indian and Turkish businesspersons. I wish you rewarding deliberations and profitable negotiations.

This is the last engagement of my deeply satisfying visit to Turkey. I have had cordial and fruitful meetings with the Turkish leadership. I was encouraged by the identity of our views about the need for a new impetus to our bilateral relations.

The long history of friendly contact between India and Turkey should be translated into a vibrant, revitalised economic partnership, based on our respective strengths. This should cover not only trade in goods and services, but also two-way investment, third country projects, scientific research collaboration, joint commercialisation of new technologies and many other areas.

We have agreed that we would constitute a special bilateral Working Group drawn from our Economic Ministries, to further this agenda. This group should identify areas of promise in hitherto unexplored sectors and analyse how they can best be developed. It would also recommend policy measures to our governments for maximizing the benefits from our cooperation.

To emphasize the urgency of this task, we have specified that the Group will submit its recommendations to the two governments within six months. I am hopeful that the ideas that emerge from this group will be creative and forward-looking.

This effort cannot produce optimum results, without the whole-hearted participation and support of the business communities of the two countries. You have to come forward with constructive ideas, based on your outlook and experiences.

In my discussions with Prime Minister Erdogan, we agreed that despite the rapid expansion of trade turnover to about 650 million dollars last year, the full potential is yet to be realized. The first target we have set is a turnover of 1 billion dollars by 2005. Even this is well below the possibilities. I am sure the Bilateral Working Group, which I have just mentioned, will have suggestions for boosting trade. But there are some obvious and fundamental areas, which we can identify straightaway.

The first is the need to strengthen the infrastructure of trade facilitation. The air link between Istanbul and Delhi, which resumed yesterday, is an important first step in travel exchanges including for business travel. Direct shipping links and easy banking channels are priority requirements. We need to go further by establishing closer links between our EXIM Banks and our export credit institutions.

A second obvious problem area is of a lack of awareness in our business communities of the available opportunities. This is an equal problem on both sides.

Since India launched its economic reforms in the last decade of the last century, it has recorded an average annual growth rate of over 6%, it is now the world’s fourth largest economy on purchasing power parity. As we adjusted to globalisation, we sharply reduced tariff and non-tariff barriers, introduced full capital account convertibility for foreign investors and opened up inter-border current account transactions. Our determined thrust for infrastructure modernisation includes construction of 13,000 kilometres of four-lane highways, a massive ports upgradation programme, and an expansion of capacity of thermal, hydroelectric and nuclear power.

Our investment in education and human resource development has equipped us with the second largest scientific and technological manpower in the world. Our advances in science and technology have today put us in the forefront of the knowledge revolution and accelerated our economic development process. We have a rapidly growing middle-class – today estimated at about 300 million – which provides scientific, technological and managerial skills, as well as a huge and growing market.

There is insufficient awareness around the world – including in Turkey – of these compelling facts. Only this can explain the large imbalance in our trade. With Turkey’s strengths and competitive advantage in infrastructure industries, Turkish project exports to India in these areas should normally have surged.

Equally, how many in the Indian business community are aware of the impressive economic record of Turkey? Its economy has shown enormous resilience in the wake of a financial crisis two years ago, and regained its growth in spite of natural disasters, war and instability in its immediate environment. The economic reforms of Turkey have retained their vibrancy. Turkey’s commercial presence in this region extends from infrastructure industries to retail activity and services.

I will give you two examples of obvious gaps in awareness, still to be bridged.:

• India exports nearly 10 billion dollars of an entire range of IT products, mainly to West Europe and USA. However, Turkey’s share in this export is almost negligible.

• Our business delegation, which is in Turkey, has discovered great opportunities for cooperation in textiles, chemicals, two-wheeler vehicles and pharmaceuticals.

The short point, therefore, is that we should have much more interaction between our business communities – through increased travel, through seminars and workshops, through trade fairs and exhibitions.

I am happy that the India-Turkey Joint Business Council had a session earlier today, and that an Indian Industry Exhibition has been launched in Istanbul to coincide with my visit. While applauding them, I would only like to point out that such activities should be part of a regular on-going process, and not confined only to high-level visits.

I understand that Turkey is the main international partner for the India International Trade Fair in Delhi later this year. I hope Turkish business and industry will respond enthusiastically to this opportunity to showcase Turkish expertise and technologies to an Indian market, which has a huge demand for them, but is today sourcing them from elsewhere.

Both India and Turkey are similarly located in areas of expanding economic opportunity. Turkey is at the crossroads of Europe, West Asia and Central Asia, on the waterways linking the North African coast and the Black Sea. The landmass from Central Asia up to the Mediterranean Coast is a zone where our commercial interests and age-old culture ties overlap.

Simple commercial logic suggests that our entrepreneurs should join forces in sectors of competitive advantage in these areas. Turkey can be a launching pad for Indian business into an expanding European market. India is itself an expanding market of a billion consumers, and also provides access to vast regions in South and South-East Asia.

India and Turkey have other objective conditions for rapid diversification of economic cooperation. We are stable, democratic nations with a tradition of respect for the Rule of Law. We have the requisite legal framework to protect investments and encourage business. We have effective regulatory bodies and independent judicial systems.

We have the bilateral framework of agreements to support an expansion of our commercial ties. Our business associations have developed relations with each other. I was happy to hear yesterday that the Confederation of Indian Industry now plans to open an office in Turkey.

Thus a proper foundation already exists to build a structure of strong economic links.

The substance of my message to you – and indeed of my visit to Turkey – is that we need to raise our relationship to a qualitatively new level. For this, we need a long-term vision of a future India-Turkey partnership, based on our respective strengths and comparative advantages. On this visit, I have been convinced that there is willingness on both sides to develop such a vision.

Governments can only encourage and facilitate this process by creating the necessary infrastructure and ensuring the necessary legal framework. After that, it is for business to pick up the gauntlet, I hope you will devote some thought to this during your deliberations here. I also hope that business and industry on both sides will maintain uninterrupted contact and dialogue to achieve this objective.

Thank you.~