India's merchandise exports of commodities such as cotton, manmade yarn and textile dyes may be impacted in the short run to earthquake-hit Turkiye, according to exporters.
Two powerful earthquakes hours apart on Monday last week caused widespread damage to property and killed more than 28,000 people, leaving millions homeless in Turkiye. The earthquakes also caused damage to the infrastructure and logistics network with the Port of Iskenderun remaining closed for around a week.
Exports to Turkiye increased to $6.2 billion during April-November 2022 against $5.1 billion in the corresponding period in 2021. Federation of Indian Export Organisations (Fieo) Director General Ajay Sahai said that the extent of the damage in Turkiye is yet not known and thus its impact on exports is difficult to ascertain.
However, the earthquake will further depreciate Turkish Lira, which has significantly depreciated recently, and has touched its record low following the earthquake making imports costlier and impacting the demand, he said.
"Since the textile manufacturing centres of Gaziantep and Kahramanmaras provinces are worst-affected, our exports of cotton and manmade yarn and textile dyes may be impacted in short run," Sahai said.
Major manufacturing hub
Gaziantep is a province in south-central Turkiye. It is a major manufacturing hub of that country.
Sharing similar views, Hand Tools Association President SC Ralhan said that India's exports to Turkiye are increasing. "Trade may get impacted in the short-term only due to the earthquake there, but not in the long run. There was no news so far from the MSME segment exporters of any issue while exporting to Turkiye so far," Ralhan said.
In 2021-22, India's exports to Turkey stood at about $9 billion, while imports aggregated at $2 billion in the same fiscal. The major Indian exports to Turkiye include mineral oils and fuels, man-made filaments and staple fibres, automotive spare parts and accessories, organic chemicals.
Turkiye's exports to India include broken/unbroken poppy seeds; machinery and mechanical appliances, iron and steel articles thereof, inorganic chemicals, pearls and precious/semi-precious stones and metals (including imitation jewellery), and marble.
Small Indian community
The Indian community in Turkiye is small, mostly working in business establishments and universities in Istanbul and Ankara. A small number of professionals also work on certain projects there. State Bank of India has a representative office in Istanbul. Turkish Airlines (in a code sharing arrangement with Air India) operates daily flights from Istanbul to Mumbai and Delhi.
Think tank GTRI exports in February and March may be tough, but from April onwards, India's exports to Turkey will grow at normal pace. Global Trade Research Initiative (GTRI) said the critical factor will be how soon Turkiye's port system resumes clearances at normal speed.
Currently, operations at the Port of Iskenderun, one of two main container ports on Turkiye's southern coast, remain suspended as it caught fire during the earthquake, it said.
Operations halted
"Exports were halted, and most containers were diverted to nearby ports. Export dwell time rose to above ten days. It may take about a month for normal operations to resume. The earthquake has affected the functioning of the central Black Sea and Mediterranean ports. But, on the positive side, Turkey has a long coastline with more than 180 ports," GTRI co-founder Ajay Srivastava.
He added that trade in February and the first fortnight of March may remain adversely impacted due to damage to the ports due to the earthquake.
However, India's merchandise exports will perform better from April, when the port operations normalize. "In the short term (2-6 months), India's merchandise exports in products that account for 78 per cent of the export basket will see normal growth. Exports in the remaining 22 per cent may be stressed. Overall, trade may remain stable," he added.
Exporting yarns, dyes, cut and polished diamonds, and jewellery may witness negative export growth, he said.
India's cotton, nylon, and synthetic yarn exports exceeded $700 million in 2022. Due to depressed consumer demand and damage to a few textile centres, there may be a short-term decline in exports of textile products, the GTRI said.