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A

GLOBAL / COUNTRY STUDY AND REPORT

ON

TURKEY

L.J.INSTITUTION OF MANAGEMENT STUDIES

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

In

Gujarat Technological University

Submitted by

SECTION A (NOON)

Batch: 2011-13,

MBA SEMESTER IV

L.J.INSTITUTE OF MANAGEMENT STUDIES

Affiliated to Gujarat Technological University

Ahmedabad

MAY, 2013

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Declaration

We Students of L.J Institute of management studies(SEC-AN), hereby declare

that the report for Global Country Report entitled “Micro analysis Of Different

Industries in TURKEY”. Are a result of our own work and our indebtedness to

other work publications, references, if any, have been duly acknowledged.

Place:

Date:

(Signature)

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PREFACE

One of the recurrent things in our report has been the Legal aspect of the country in the mind of

people. During the past few decades we have leaved in culture that is the evidence of changing

people’s preference in everything.

We have chosen to prepare a report on "GLOBAL COUNTRY REPORT ON TURKEY" because

of its importance for the people and for the Indian economy. At first when we were putting down

our efforts we have no idea what we would have to say through our report but however we put

aside all doubts and begun to examine the Law of a country. We examined how it works, their

demographic profile, general economic & industries overviews, general overview of trade &

commerce, overview of different economic sectors of turkey, legal aspects, present trade

relations with India, import-export, business volume of different products, investments, pestle

analysis and swot analysis.

Every country has struggled to achieve its goals. Generations have given their best to make life

better for their offspring. There is nothing mysterious or hidden about it an alternative to effort.

And yet we fail to follow the winning track. More than the problems outside – globalization,

recession, inflation, instability, and so on – we are concerned about the inertia that has gripped

the Country psyche, the mindset of defeat. We believe that when we believe in our goals that

what we dream of can become reality results will began to follow.

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ACKNOWLEDGEMENT

While we are of course solely responsible for the content in this report. We want to thank several

people for their assistance. From the practical study we have got the experience and improved

our knowledge and it provides us guidelines to perform work in actual situation.

We have thankful to director of our college Prof. P.K Mehta sir, to providing all the facilities to

make this report and for all encouragement. Firstly we are thankful to the faculty who reviewed

this report and provided us with rich guidance Prof. Priyanka Pathak.

We are thankful to all those respondents who actively engaged with our research given their

precious time to us. At home we want to acknowledge the support and patience of our parents

during the many hours we spent on working on the report.

We acknowledge our gratitude towards all those who directly or indirectly provided timely help

and encourage us throughout the course of this work.

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INDEX

Chapter : 1

TURKEY

CHAPTER NO

CHAPTER TITLE

Nos.

1 INTRODUCTION 7

2 DEMOGRAPHIC PROFILE 13

3 SUMMARY OF ALL ASPECTS OF TURKEY(SEM-III) 19

4 SUMMARY OF INDIVIDUAL TOPICS(SEM-IV) 39

5 CONCLUSIONS OF EACH INDUSTRY 163

6 BIBLIOGRAPHY 177

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PRESIDENT Abdullah Gul (2007)

PRIME MINISTER Recep Tayyip Erdogan (2003)

LAND AREA 297,591 sq mi (770,761 sq km)

TOTAL AREA 301,382 sq mi ( 780,580 sq km)

POPULATION (JULY 2011

est.)

78,785,548 ( Growth rate: 1.235 % ), Birth rate :17.93/1000, Infant

Mortality rate: 23.94/1000, Life Expectancy: 72.5

CAPITAL (2009 est.) Ankara, 3.846 million

LARGEST CITIES Istanbul, Izmir, Bursa, Adana

MONETARY UNITS Turkish Lira (YTL)

GEOGRAPHY

Turkey is at the northeast end of the Mediterranean Sea in southeast Europe and southwest Asia. To the

north is the Black Sea and to the west is the Aegean Sea. Its neighbors are Greece and Bulgaria to the

west, Russia, Ukraine, and Romania to the north and northwest (through the Black Sea), Georgia,

Armenia, Azerbaijan, and Iran to the east, and Syria and Iraq to the south. The Dardanelles, the Sea of

Marmara, and the Bosporus divide the country. Turkey in Europe comprises an area about equal to the

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state of Massachusetts. Turkey in Asia is about the size of Texas. Its center is a treeless plateau rimmed

by mountains.

HISTORY

Anatolia (Turkey in Asia) was occupied in about 1900 B.C. by the Indo-European Hittites and, after the

Hittite empire's collapse in 1200 B.C. , by Phrygians and Lydians. The Persian Empire occupied the area

in the 6th century B.C. , giving way to the Roman Empire, then later the Byzantine Empire. The Ottoman

Turks first appeared in the early 13th century, subjugating Turkish and Mongol bands pressing against the

eastern borders of Byzantium and making the Christian Balkan states their vassals. They gradually spread

through the Near East and Balkans, capturing Constantinople in 1453 and storming the gates of Vienna

two centuries later. At its height, the Ottoman Empire stretched from the Persian Gulf to western Algeria.

Lasting for 600 years, the Ottoman Empire was not only one of the most powerful empires in the history

of the Mediterranean region, but it generated a great cultural outpouring of Islamic art, architecture, and

literature

After the reign of Sultan Süleyman I the Magnificent (1494–1566), the Ottoman Empire began to decline

politically, administratively, and economically. By the 18th century, Russia was seeking to establish itself

as the protector of Christians in Turkey's Balkan territories. Russian ambitions were checked by Britain

and France in the Crimean War (1854–1856), but the Russo-Turkish War (1877–1878) gave Bulgaria

virtual independence and Romania and Serbia liberation from their nominal allegiance to the sultan.

Turkish weakness stimulated a revolt of young liberals known as the Young Turks in 1909. They forced

Sultan Abdul Hamid to grant a constitution and install a liberal government. However, reforms were no

barrier to further defeats in a war with Italy (1911–1912) and the Balkan Wars (1912–1913). Turkey sided

with Germany in World War I, and, as a result, lost territory at the conclusion of the war.

GOVERNMENT

Recep Tayyip Erdoğan has been elected three times as Prime Minister: In 2002 (with 34% of the popular

vote), in 2007 (with 47%) and in 2011 (with 49%). Turkey is a parliamentary representative democracy.

Since its foundation as a republic in 1923, Turkey has developed a strong tradition of secularism.

Turkey's constitution governs the legal framework of the country. It sets out the main principles of

government and establishes Turkey as a unitary centralized state. The President of the Republic is the

head of state and has a largely ceremonial role. The president is elected for a five-year term by direct

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elections. Abdullah Gul was elected as president on 28 August 2007, by a popular parliament round of

votes, succeeding Ahmet Necdet Sezer.

Executive power is exercised by the Prime Minister and the Council of Ministers which make up the

Executive power is exercised by the Prime Minister and the Council of Ministers which make up the

government, while the legislative power is vested in the unicameral parliament, the Grand National

Assembly of Turkey. The judiciary is independent of the executive and the legislature, and the

Constitutional Court is charged with ruling on the conformity of laws and decrees with the constitution.

The Council of State is the tribunal of last resort for administrative cases, and the High Court of Appeals

for all others.

The prime minister is elected by the parliament through a vote of confidence in the government and is

most often the head of the party having the most seats in parliament. The current prime minister is the

former mayor of Istanbul, Recep Tayyip Erdogan, whose conservative Justice and Development Party

won an absolute majority of parliamentary seats in the 2002 general elections, organized in the aftermath

of the economic crisis of 2001, with 34% of the suffrage.

The Grand National Assembly of Turkey in Ankara during a speech of U.S. President Barack Obama on 6

April 2009. In the 2007 general elections, the AKP received 46.6% of the votes and could defend its

majority in parliament. Although the ministers do not have to be members of the parliament, ministers

with parliament membership are common in Turkish politics. In 2007, a series of events regarding state

secularism and the role of the judiciary in the legislature occurred. These included the controversial

presidential election of Abdullah Gul, who in the past had been involved with Islamist parties; and the

government's proposal to lift the headscarf ban in universities, which was annulled by the Constitutional

Court, leading to a fine and a near ban of the ruling party. Universal suffrage for both sexes has been

applied throughout Turkey since 1933, and every Turkish citizen who has turned 18 years of age has the

right to vote. As of 2004, there were 50 registered political parties in the country. The Constitutional

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Court can strip the public financing of political parties that it deems anti-secular or separatist, or ban their

existence altogether.

There are 550 members of parliament who are elected for a four-year term by a party-list proportional

representation system from 85 electoral districts which represent the 81 administrative provinces of

Turkey (Istanbul is divided into three electoral districts, whereas Ankara and Izmir are divided into two

each because of their large populations). To avoid a hung parliament and its excessive political

fragmentation, only parties winning at least 10% of the votes cast in a national parliamentary election

gain the right to representation in the parliament. Because of this threshold, in the 2007 elections only

three parties formally entered the parliament (compared to two in 2002)

Human rights in Turkey have been the subject of much controversy and international condemnation.

Between 1998 and 2008 the European Court of Human Rights made more than 1,600 judgments against

Turkey for human rights violations, particularly the right to life and freedom from torture. Other issues

such as Kurdish rights, women's rights and press freedom have also attracted controversy. Turkey's

human rights record continues to be a significant obstacle to future membership of the EU. The Turkish

Journalists Association says that 58 of the country's journalists have been imprisoned. A former U.S.

State Department spokesman, Philip J. Crowley, said that the United States had "broad concerns about

trends involving intimidation of journalists in Turkey."

FOREIGN RELATION

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Main articles: Foreign relations of Turkey and Accession of Turkey to the European Union Turkey began

full membership negotiations with the European Union in 2005, having been an associate member of the

EEC since 1963, and having joined the EU Customs Union in 1995

Turkey is a founding member of the United Nations (1945), the OECD (1961), the OIC (1969), the

OSCE(1973), the ECO (1985), the BSEC (1992) and the G-20 major economies (1999). On 17 October

2008, Turkey was elected as a non-permanent member of the United Nations Security Council. Turkey's

membership of the council effectively began on 1 January 2009. Turkey had previously been a member of

the U.N. Security Council in 1951–1952, 1954–1955 and 1961. In line with its traditional Western

orientation, relations with Europe have always been a central part of Turkish foreign policy. Turkey

became a foundingmember of the Council of Europe in 1949, applied for associate membership of the

EEC (predecessor of the European Union) in 1959 and became an associate member in 1963. After

decades of political negotiations, Turkey applied for full membership of the EEC in 1987, became an

associate member of the Western European Union in 1992, joined the EU Customs Union in 1995 and has

been in formal accession negotiations with the EU since 2005.

Since 1974, Turkey has not recognized the Republic of Cyprus, but instead supports the Turkish Cypriot

community in the form of the de facto Turkish Republic of Northern Cyprus, which was established in

1983 and is recognized only by Turkey. The Cyprus dispute complicates Turkey's relations with both

NATO and the EU, and remains a major stumbling block to Turkey's EU accession bid. The other

defining aspect of Turkey's foreign relations has been its ties with the United States. Based on the

common threat posed by the Soviet Union, Turkey joined NATO in 1952, ensuring close bilateral

relations with Washington throughout the Cold War. In the post–Cold War environment, Turkey's

geostrategic importance shifted towards its proximity to the Middle East, the Caucasus and the Balkans.

In return, Turkey has benefited from the United States' political, economic and diplomatic support,

including in key issues such as the country's bid to join the European Union.

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The independence of the Turkic states of the Soviet Union in 1991, with which Turkey shares a common

cultural and linguistic heritage, allowed Turkey to extend its economic and political relations deep into

Central Asia, thus enabling the completion of a multi-billion-dollar oil and natural gas pipeline from Baku

in Azerbaijan to the port of Ceyhan in Turkey. The Baku–Tbilisi–Ceyhan pipeline forms part of Turkey's

foreign policy strategy to become an energy conduit to the West. However, Turkey's border with

Armenia, a state in the Caucasus, remains closed following Armenia's occupation of Azerbaijani territory

during the Nagorno-Karabakh War. Under the AK Party government, Turkey's influence has grown in the

Middle East based on the strategic depth doctrine, also called Neo-Ottomanis

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Chapter : 2

DEMOGRAPHIC STRUCTURE OF TURKEY

The last official census was in 2000 and recorded a total country population of 67,803,927

inhabitants. According to the Address-Based Population Recording System of Turkey, the country's

population was 74.7 million people in 2011, nearly three-quarters of whom lived in towns and cities .

According to the 2011 estimate, the population is increasing by 1.35% each year. Turkey has an average

population density of 97 people per km. People within the 15–64 age group constitute 67,4% of the total

population; the 0–14 age group corresponds to 25.3%; while senior citizens aged 65 years or older make

up 7.3%.

Life expectancy stands at 71.1 years for men and 75.3 years for women, with an overall average of 73.2

years for the populace as a whole. Education is compulsory and free from ages 6 to 15. The literacy rate is

97.79% for males and 90.13% for females as of the year 2010 Article 66 of the Turkish

Constitution defines a "Turk" as "anyone who is bound to the Turkish state through the bond of

citizenship"; therefore, the legal use of the term "Turkish" as a citizen of Turkey is different from

the ethnic definition. However, the majority of the Turkish populations are of Turkish ethnicity.

The three officially recognized major minorities ethnic groups are Armenians, Greeks and Jews. Signed

on 30 January 1923, a bilateral accord of population exchange between Greece and Turkey took effect in

the 1920s, with close to 1.1 million Greeks moving from Turkey and some 380,000 Turks coming from

Greece. Following decades of state-sponsored discrimination, the formerly 110,000-strong Greek

community of Istanbul has now shrunk to approximately 3,000. Other ethnic groups

include Abkhazians, Albanians, Arabs, Assyrians, Bosniaks, Pomaks , Roma. The Kurds, a distinct ethnic

group concentrated mainly in the southeastern provinces of the country, are the largest non-Turkic

ethnicity, variously estimated around 18%. Minorities besides the Kurds are though to make up an

estimated 7-12% of the population. Minorities other than the three officially recognized ones do not have

specific minority rights, while the term "minority" itself remains a sensitive issue in Turkey and the

Government of Turkey is frequently being criticized for its treatment of minorities, with Human Rights

Watch stating as of 2012 The government’s "democratic opening", announced in summer 2009 to address

the minority rights of Kurds in Turkey, did not progress.

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An estimated 71% of the population live in urban centers. In all, 18 provinces have populations that

exceed 1 million inhabitants, and 21 provinces have populations between 1 million and 500,000

inhabitants. Only two provinces have populations less than 100,000.

DEMOGRAPHIC PROFILE OF TURKEY

Population 79,749,461 (2010 est.)

Growth Rate 1.36 % (2011 est.)

Birth Rate 17.0 Births/1000 (2010)

Death Rate 6.0 Deaths/1000 (2008 est.)

Life Expectancy

Male

Female

73.7 years (2009 est.)

71.5 years (2009 est.)

76.1 years (2009 est.)

LANGUAGE

Official Turkish

Spoken Turkish, Kurdish, Albanian, Neo-Aramic Laz, Georgian, Serbian,

Bosnian, Bulgarian, Pontic, Zazaki, Arabic, Azerbaijani, Kabardian,

Armenian, Ladino.

AGE STRUCTURE

0-14 Years 26.6% ( Male 10,707,793/Female 10,226,999)

15-64 Years 67.7% (Male 24,218,277, Female 23,456,761)

65-over 6.8% (Male 2,198,073, Female 2,607,551) 2006 est.

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Infant mortality rate:

male: 24.13 deaths/1,000 live births

female: 21.96 deaths/1,000 live births (2011 est.)

Total: 23.07 deaths/1,000 live births

Life expectancy at birth:

male: 70.86 years

female: 74.78 years (2011 est.)

Total population: 79,749,461 (June 2011 est.)

Total fertility rate:2.13children born/woman (2011 est.)

HIV/AIDS - adult prevalence rate:less than 0.1 (2009 est.)

People living with HIV/AIDS:4,600 (2009 est.)

HIV/AIDS – deaths:fewer than 200 (2009 est.)

Ethnic groups:Turkish 70-75%, Kurdish 18%, other minorities 7-12% (2008)

Religions:Muslim 99.8%, other 0.2% (mostly Jews & Christians)

Literacy: male: 95.3%

female: 79.6% (2004 est.)

total population: 87.4%

Education expenditures:2.9% of GDP (2006)

Maternal mortality rate:23 deaths/100,000 live births (2008)

Health expenditures :6.7% of GDP (2009)

Physician density :1.451 physicians/1,000 population (2008)

Hospital bed density :2.41 beds/1,000 population (2008)

Obesity - adult prevalence rate :16.1% (2007)

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LANGUAGE

According to Turkish constitution, the word “Turk,” as a political term, includes all citizen of the

Republic of Turkey, without reference to race or distinction of or religion; ethnic minorities have no

authorized status. Linguistic data show that a greater part of the population claim Turkish as their mother

tongue; most of the remainder speak Kurdish and a small minority Arabic as their first language

RELIGION

Turkey is a secular state with no official state religion; the Turkish Constitution provides for freedom of

religion and conscience. Research firms suggest that actual- Muslim figure is around 98% or 97% and

Islam is the dominant religion of Turkey, it exceeds 99% if secular people of Muslim background are

included.

There are about 1,20,000 people of different Christian denominations, and then estimated 80,000 Oriental

Orthodox; 35,000 Roman Catholics; 5,000 Greek Orthodox. In the present days there are 236 churches

open for worship in Turkey. The Eastern Orthodox Church has been since 4th century headquarters in

Istanbul. Christians stand for less than 0.2% of Turkey's population, according to the CIA World Fact

book. There are 26,000 people who are Jewish, the vast majority of who are Sephardic.

Academics suggest the Alevi population may be from 15 to 20 million. According to Aksiyon magazine,

the number of Shiite Twelvers (excluding Alevis) is 3 million (4.2%), and they live in Istanbul, Kars,

Mugla, Agrı Ankara, Izmir, Manisa, Çorum and Aydın. There are also a little quantity of Sufi

practitioners. The highest Islamic religious power is the Presidency of Religious Affairs it interpret

the Hanafi school of law.

The role of religion has been a controversial debate over the years since the formation of Islamic parties,

specially in education. Turkey was found upon a strict spiritual foundation which forbids the influence of

any religion, including Islam. There are responsive issues, such as the fact that the wearing of the Hijab is

banned in universities and public or government buildings as some view it as a symbol of Islam – though

there have been efforts to lift the ban.

The public broadcaster TRT has a special TV channel for Kurdish that broadcasts on a 24 hour / 7day

basis called TRT 6 and other TV and Radio stations that broadcast programmes in the local languages and

dialects like Armenian, Arabic, Bosnian a few hours a week. Other special TV channel expected at the

Turkic world, TRT Avaz was launched on 21st March 2009 and broadcast in the Azeri, , Uzbek,

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Kazakh, Kyrgyz, and Turkmen languages; while the TRT Arabic television channel started broadcasting

on 4th April 2010.

There are no statistics of people's religious beliefs nor is it asked in the census. According to the

government, 99.8% of the Turkish population is Muslim, commonly Sunni, some 10 to 15 million are

Alevis The remaining 0.2% is other - mostly Christians and Jews. The Euro barometer census 2005

reported that in a poll 96% of Turkish citizens answered that "they believe there is a God", whereas 1%

respond that "they do not believe there is any kind of strength, God, or life force". In a Pew Research

Center survey, 53% of Turkey's Muslim said that "religion is very essential in their lives". Based on the

Gallup census 2006-08, Turkey was defined as More religious, in which over 63% of people believe

religion is essential. According to the Turkish Economic and Social Studies Foundation, 62% of women

wear the headscarf or hijab in Turkey. 33% of male Muslim citizens regularly attend Friday prayers.

Religious Groups according to estimates are as follows:

Muslims - 96.83% (80-85% Sunni, 15-20% Alevi)

Christian - 0.13% (60% Armenian Orthodox, 20% Syrian Orthodox, 10% Protestant,8 %

Chaldean Catholic, 2% Greek orthodox)

Jewish - 0.03% (96% Sephardi, 4% Ashkenazi)

Bahai Faith - 0.01%

Atheist - 3%

The vast majority of the present-day Turkish people are Muslim and the most popular party is the

Hanafite school of Sunni Islam, which is officially espous by the Ottoman Empire; according to the

KONDA Research and Consultancy survey carried out throughout Turkey on 2007:

40.8% defined themselves as "a religious person who strives to fulfill religious obligations"

(Religious)

42.3 % defined themselves as ""a believer who does not fulfill religious obligations" (Not

religious).

2.5% defined that as "a fully devout person fulfilling all religious obligations" (Fully devout).

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10.3% defined themselves as "someone who does not believe in religious obligations" (Non-

believer).

4.1% defined themselves as "someone with no religious conviction" (Atheist).

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CHAPTER: 3

SUMMARY OF ALL ASPECTS OF TURKEY

ECONOMIC OVERVIEW

CURRECY TURKISH LIRA

FISCAL YEAR CALENDER YEAR

TRADE ORGANIZATION G20 MAJOR ECONOMICS, OECD, EU

CUSTOM UNION, WTO, ECO & BSEC

GDP 1.232 TRILLION (2011)

GDP GROWTH RATE +8.49% (2011)

GDP PER CAPITA $10498 (NOMINAL 2011)

$16885 (PPP 2011)

GDP BY SECTOR AGRICULTURE 9.4%

INDUSTRY 25.9 %

SERVICE 64.7%

INFLATION CPI 9.07% (JULY)

LABOUR FORCE 25.3 MILLION, ABOUT 1.2 MILLION TURKS

WORK ABROAD

BY OCCUPATION AGRICULTURE 29.5%

INDUSTRY 24.7%

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SERVICES 45.8 %

UNEMPLOYMENT 8.8 % (DECEMBER 2011)

MAIN INDUSTRY TEXTILES, FOOD PROCESSING, AUTOS,

ELECTRONICS, TOURISM , MINING,

STEEL, PETROLEUM, PAPER

EXTERNAL

EXPORTS $143.93 BILLION (2010)

EXPORTS GOODS APPAREL, FOODSTUFF, TEXTILES, MEAL

MANUFACTURES, TRASPORT

EQUIPMENT

PARTNER GERMANY, FRANCE, UK, ITALY, IRAQ

IMPORT $235.49 BILLION (2010)

IMPORT GOODS MACHINERY, CHEMICALS,

SEMIFURNISHED GOODS, FUELS

IMPORT PARTNERS RUSSIA, GERMANY, CHINA, US, ITALY,

FRANCE.

PUBLIC DEBT 43 % OF GDP (2012)

REVENUE 145.3 BILLION (2009)

EXPENSES 180.6 BILLION (2009)

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MAIN ECONOMIC SECTORS

AGRICULTURE

INDUSTRIAL SECTOR

TEXTILES & CLOTHING

MOTOR VEHICLES & AUTOMOTIVE PRODUCTS

MULTIPLE UNIT TRAINS, LOCOMOTIVES & WAGONS

SHIPBUILDING

STEEL-IRON INDUSTR

SERVICE SECTOR

TOURISM SECTOR

FINANCIAL SECTOR

GENERAL OVERVIEW OF TRADE & COMMERCE

TRADING POLICIES

The objective of Turkey’s trade policies at all levels is to effectuate the principle of "free and fair

trade" in its relations. The World Trade Organization (WTO), which

regulates the course of the multilateral trade system, and the ongoing Doha Development Round

negotiations are considered as invaluable platforms by Turkey to voice its concerns and endorse

its interests.

The Customs Union established with the European Community (EC) in 1995, which came into

force in 1996 right after the completion of the Uruguay Round has also been a cornerstone in

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Turkey’s trade policies. The EC’s determining influence in Turkey’s trade relations has

intensified even more with the beginning of the full membership process. Turkey also makes

efforts to achieve a liberalized world trade and beginning from its region, works to enhance its

commercial and economic relations with its neighbours. Turkey expects its trade policy to

contribute to the economic and also political stability in its region. Towards that end, Turkey also

pursues ambitious trade agendas from a regional perspective in organizations such as Economic

Cooperation Organization (ECO), Black Sea Economic Cooperation (BSEC), Organization of

Islamic Conference (OIC) and Developing-8 as a member

NO OF RETAIL OUTLET IN TURKEY

AVAILABILITY OF THE VARIOUS MEDIA IN THE TURKEY MARKET

There are mainly five types of media are available in the Turkey

1. Newspaper

2. Television

3. Radio

4. Magazines

5. Journals

OVERVIEW OF DIFFERENT ECONOMIC SECTORS

2002 2003 2004 2005 2006 2007

467251 475747 481843 487919 496347 507339

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MAIN ECONOMIC SECTORS

AGRICULTURAL SECTOR

INDUSTRIAL SECTOR

Consumer electronics and home appliances.

Textiles and clothing

Motor vehicles and automotive products

Multiple unit trains, locomotives and wagons

Shipbuilding.

CONSTRUCTION & CONTRACTING SECTOR.

SERVICE SECTOR

TOURISM SECTOR

FINANCIAL SECTOR

NATURAL RESOURCES

MINERALS

PETROLEUM & NATURAL GAS

NUCLEAR ENERGY

GEOTHERMAL ENERGY

ENERGY SECURITY

ENVIRONMENT

LEGAL ASPECTS OF TRADE IN TURKEY

Different forms of legal persons are recognized in Turkey:

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Companies

Partnerships

Joint Ventures

Individuals/ Sole traders

Branch Companies

The rights, obligations, and liabilities vary depending on which form of entity is chose

Legal Aspects of Turkey

Trade Administration Regime and Its Development are there

Import Restrictions is tough for turkey

Import License is must.

Import Supervision is also there.

Registration of Imported Textile must be done by company.

Export Registration must be done by company

Trade Remedies also there for traders.

Export Prohibitions are there.

Investment Administration and Its Development

Trade and Investment Related Administration and Its Development

Turkey National Standards on Building Products is also there that must be follow by a company.

License Restriction is there also.

There are Technical Barriers to Trade.

PRESENT TRADE RELATIONS WITH INDIA\

INDIA-TURKEY RELATIONS

Bilateral relations are friendly and cordial and are steadily improving. Turkey is committed to

secularism and democratic principles. Indian economic progress and technological advancement

have been instrumental in the recent upsurge in Turkish interest towards India also given that

both are G-20 members with progressive economies. Recent high level visits were from President

K.R. Narayanan (1998), Vice- President Krishan Kant (1998), Prime Minister Atal Bihari

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Vajpayee (2003), VicePresident M.H. Ansari (2011), Turkish Prime Minister Recep Tayyip

Erdoğan(2008) and Turkish President Abdullah Gul (2010).

India’s exports to Turkey include petroleum products, vaccines, cotton yarn, synthetic yarn, organic

dyes, organic chemicals, denim, steel, granite, antibiotics, carpets, tobacco, cars, sesame seed, TV

CRTs, mobile handsets, clothing and apparel, tractors, aluminium, polypropylene.

Turkey’s exports to India include poppy seeds, auto components, marble, textile machinery, denim,

carpets, cumin seeds, copper ores and concentrates, flat rolled iron and steel and gold, silver,

inorganic chemicals, jewellery.

Indian companies in Turkey: More than 150 companies with Indian capital have registered

businesses in Turkey in the form of joint ventures, trade and representative offices. They include M/s

Polyplex, GMR Infrastructure, TATA Motors, Mahindra & Mahindra, Reliance, Ispat, Aditya Birla

Group, Tractors and Farm Equipment Ltd., Jain Irrigation, Wipro and Dabur. Turkish companies are

similarly interested in reaching out to India.

MAIN COMMODITIES TO TRADE

Turkish export products to India are iron and steel products, oil-seeds, crude fertilizers, textile yarn,

machinery, metal ores, road vehicles and mineral manufactures. Imports are dominated by textile yarn

and fabrics, organic chemicals, clothing accessories, medicinal and pharmaceutical products,

petroleum oils, motor vehicles, iron and steel, textile fibers, coloring materials.

Indian Community: Indian community in Turkey is small, and consists of nearly 200 persons mostly

working in business establishments and universities in Istanbul and Ankara. There are no Indian

news/media channels in Turkey. 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.

TOURISM

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The number of Indian citizens visiting Turkey is on steady rise in recent years. The figure reached

from 35.000 in 2006, to 55.000 and 63.000 in 2009 and 2010, respectively.

Trade Relations Between India and Turkey Developing Fast

India and Turkey, two countries with emerging markets are on the way to developing their mutual

trade to a much better level. In this respect some Indian groups have acquired companies in Turkey,

recently and are seriously planning to enlarge their businesses in this country. Generally speaking,

India exports include cotton yarn, synthetic yarn, organic dyes, organic chemicals, denim, steel bars

and rods, granite, antibiotics, carpets, unwrought zinc, clothing and apparels to Turkey and imports

poppy seeds, auto components, marble, textile machinery, handlooms, denim, carpets, cumin seeds,

minerals and steel products from this country.

In the meantime one can observe that weddings held by very rich businessmen in Turkey (Istanbul

and Antalya mainly) have been occasions to improve mutual business relations and played a

significant role as such.

In fact Indian weddings which have taken place in Turkey recently, have paved the way to more deals

and more trade and investment between the two countries.

Istanbul and the southern province of Antalya for instance recently hosted two major Indian

weddings, which cost nearly 5 million euros in total. Vartika Mittal, the nephew of the Indian steel

magnate and owner of Arcelor Mittal, the world’s largest steelmaking company, married Utsav

Goenka in Istanbul. Some 500 guests attended the three-day ceremony, which cost 3 million euros.

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Last month, the Indian families of Bansal and Kanodia also spent 2 million euros on their children’s

wedding at the Mardan Palace Hotel in Turkey’s southern province of Antalya. For 450 guests, they

reserved 250 rooms in the hotel

IMPORT & EXPORT

Turkey is officially known as the Republic of Turkey is a Eurasian country located in Western

Asia (mostly in the Anatolian peninsula) and in East Thrace in South-eastern Europe. Turkey's

location at the crossroads of Europe and Asia makes it a country of significant geostrategic

importance.

In addition to its strategic location, Turkey's growing economy and diplomatic initiatives have led

to its recognition as a regional power in the Middle East.

According to the Organisation for Economic Co-operation and Development (OECD) , Turkey is

expected to be the fastest growing economy among OECD members between 2011 and 2017,

with an annual average growth rate of 6.7 percent. Although immigration from rural to urban

areas since 1990 has been high, 24.5% of the population still lives in rural areas. The major cities

and their populations are: Istanbul, the trade and finance centre, 12.9 million; Ankara, the capital,

4.7 million; Izmir a major player in the dairy, greenhouse and tourism sector, 3.9 million; Bursa,

the centre of automotive manufacturing and food processing, 2.6 million; Adana, the centre of

agricultural production,2.1 million; Konya, the canter of grain production, 2.0 million; and

Antalya, the centre of vegetable production and tourism sector, 1.9 million. The population of

Turkey is expected to reach 75.8 in 2013 and 77.6 million in 2015. Seventy-two percent of the

population is under the age of 35 and 26% is under the age of 15.

IMPORT REGULATION

Overall, Turkey has a relatively free market for trade in goods and services as a result of liberalization

measures introduced over the past two decades. Turkey follows basic WTO rules to regulate imports and

tariff structures and has adopted the European Union (EU)'s common customs tariff for imports from third

countries. Turkey signed a customs union with the EU in 1996, eliminating all duties and charges on

goods imported from EU member countries, excluding services, public procurement and unprocessed

28 | P a g e

agricultural products. Turkey has signed free trade agreements with various countries and extends

preferential treatment for least developed countries and some developing countries.

EXPORT REGULATION

TRANSIT – 1

o Increased concern on the transit of dual-use items within Turkey as well as within

the international community.

o Relevant Turkish legislation – 1

o The related provisions of the under secretariat of Foreign Trade Communiqué

2003/12 on the Control of Exports of Dual-Use

o and Sensitive Items.

o The related provisions of the Customs Law no. 4458 dated 5 February 2000 which

conforms with EU Customs Code (Council Regulation 2913/92).

TRANSIT – 2

o Relevant Turkish legislation – 2

o Anti Smuggling Law no. 5607.

o Within this legislative framework, transits of items that are subject to export

controls are treated on a case-by-case basis within the scope of interagency

cooperation.

ENFORCEMENT -1

o Located in a sensitive geography where transit-trade and transit-shipment is

common, customs enforcement and ground interdiction in general is of prime

importance to Turkey.

o Customs authorities use an extensive database for enforcement purposes.

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o New security systems have also been developed and established to prevent illegal

trafficking of goods.

ENFORCEMENT- 2

o “Intelligence and Land Border Gates Vehicle Pursuit Program” has been

developed.

o System currently operates at strategically important land border gates and

seaports.

o All alerts and intelligence information about suspected vehicles, goods, firms,

brokers and other actors are introduced into this program and forwarded to all

regional units

BUSINESS VOLUME OF DIFFERENT PRODUCTS &

INVESTMENTS

MAIN PRODUCTS OF TURKEY:

STEEL

AUTOMOBILE

TOURISM

SHIP BUILDING

MINING

GENERAL ECONOMIC OUTLOOK OF TURKEY

With approximately 73 million of population and 16th largest economy in the world, being a

young, growing and EU candidate country, Turkey’s economic policies have shown significant

differences before and after 1980. Industrialization strategies based on an import substitution

30 | P a g e

policy had been left and the reforms were designed to transform the structure of the economy in

the direction of an open, liberal and market-oriented since 1980’s. The main components of the

economic reform of Turkey are diminishing government intervention and liberalizing economic

sectors, implementing a floating exchange rate policy, loosening import and export regulations,

encouraging foreign investments, deregulating financial markets and privatizing public entities

Today, Turkey is far more integrated into the global economy and the Turkish economy has

experienced an average growth rate of almost 5 percent over the past 20 years (Figure 1). The

gross national product (GNP) increased by 100% since 2000 to $400 billion, and the per capita

GNP rose to $5,500 . The share of industrial product in GNP is 26% and agriculture is

approximately 10%

Turkey is a lucky country with her very diverse mineral resources and produces around 60

different metals and minerals (Table 1). The country has worldwide reserves of barite, boron,

clays, emery, feldspar, limestone, magnesite, marble, perlite, pumice, strontium, thorium, trona

and zeolite and a leading producer of antimony, boron minerals, chromite, feldspar, magnesite,

marble, meerschaum, perlite, pumice, sepiolite and strontium

Much of Turkey's mineral production is from a large number of small mines. There are38,320

licensed mines in Turkey and 7,220 of the mines are in operation. Turkey’s total mining

production was realized as approximately 250 million tons and about 50 percent of this figure

was cement raw material production (General Directorate of Mining Affairs).

Subsector Production (tons)

Energy raw materials (asphaltite, bituminous shale, lignite and hard

coal) 55,612,693

Metallic minerals 11,522,890

Natural stones (diabase, marble, onyx, travertine, andesite, basalt,

granite, sandstone, serpentine) 8,800,000

Cement raw materials (limestone, marl, clay, pyrophillite, trass,

schist) 122,116,677

Industrial minerals 51,689,002

Total 249,741,262

Due to its highly varied geology, Turkey has also several other minerals and metals. Gold and

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base metal exploration and development have been on the increase recent years. Iron and steel

industry in Turkey is fairly developed. Turkey produces large amount of chromite, some smaller

gold, base metal, bauxite and limited amount of antimony. The important mining exports of

Turkey are marble, boron minerals, copper, chromite, magnesite, zinc ores and feldspar. Recent

explorations have also showed increased amount of reserves of metallic minerals and coal. Best

known for its industrial minerals, Turkey has enormous amount of marble and natural stone

reserves. The country has also significant lignite deposits spreading all over the country. Richness

classification of mineral reserves of Turkey is given in Table 2 (State Planning Organization).

The mining industry in Turkey is very dynamic especially in recent years. Over 100,000 people

are employed in the mining and mineral processing sectors in Turkey. Approximately 1.4 percent

($5.2 billion) of Turkey’s GNP of 2005 was contributed by the mining and mineral processing

industries. Although it shows some variability in recent years, the growth rate of mining industry

has accelerated especially in the last few years . The growth of the sector in 2004 was 2.6 percent

and 12.9 percent

Very rich

Chromite, Mercury, Thorium, Lantan, Fluorite, Feldspar, Gypsum,

Bentonite, Boron, Magnesite,

Marble, Perlite, Limestone-Marl, Dolomite, Emery, Salt, Barite, Zeolite,

Pumice, Meerschaum

Rich

Gold, Silver, Scheelite, Antimony, Aluminium, Lignite, Silica, Asbestos,

Sodium sulphate,

Strontium, Huntite, Sepiolite, Calcite, Disten, Diatomite, Alunite,

Olivine, Vermiculite,

Phlogobite, Natural Stones, Pyrophillite, Sand-Gravel, Pyrite, Glaoconite,

Trass, Quarsite

Normal

Copper, Lead, Zinc, Cadmium, Iron, Manganese, Cobalt, Nickel,

Molybdenum, Titanium,

Titan, Arsenic, Uranium, Hard coal, Petroleum, Natural gas, Sulphur,

Clay, Kaolin, Graphite,

Phosphate, Vollastonite, Mica, Ornament Stones, Talc, Slate

None

Platinu

m, Tin,

Vanadiu

m,

Potash,

Zircon,

Rutil

e,

Sillimanite-Andaluzite,

Corondon,

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PESTLE ANALYSIS

POLITICAL

One of the current political strengths in Turkey is that their government have policies on liberalisation.

Turkey is supporters of liberal trade and investment policies which allow open trade between different

countries in the EU. Turkey forged a custom union agreement in 1996 to allow many Turkish firms to get

bigger and more successful in the global economy. Exports have been rising on average at a rate of 10%

every year and this will allow the fashion industry to flourish with the exports produced in the Turkish

plant.

One of the current political challenges in Turkey is the series of violent terrorist attacks that have

happened in the country due to Islamic extremist, Kurdish radicals, Turkish militants that may have link

with Al-Qaeda. This is a disadvantage for bringing the plant to Turkey as it may be targeted by these

terrorist.

ECONOMY

One of the current economic strengths in Turkey is that there is a high flow of foreign investment coming

from abroad. The investment plays apart in Turkey's speedy expansion and this has been driving the

country's economic growth. In Turkey there is a privatisation program planned to start from 2008 that will

allow the sale of major bridges, highways, electricity grids and a share in the partly commercial bank. The

money generated from foreign investment will be used for expanding the infrastructure of the country;

this will be an advantage for bringing the plant into Turkey as the Turkish economy will be in growth and

to bring the plant here will only benefit the company and the fashion industry.

One of the current economic challenges in Turkey is the current account deficit for Turkey. The declining

current account has been was delayed the economic stability. The import market has seen a quick rise as

an outcome of increased global commodity prices and a sturdy Turkish lira. Turkey is even more

Potassium nitrate, Lithium, Diamond, Brome-Iodine, Colombium

33 | P a g e

vulnerable during times of global financial doubt. This will be a disadvantage for bringing in the plant

into Turkey as it the company may need to relocate if there is a financial crisis which may happen with

Turkey.

SOCIAL SYSTEM

One of the social system strengths in Turkey is that they have growing proportion of young population as

they have more than half the population being aged below 30. This will allow Turkey to increase their

employment rate by getting the most out of the young labour force. This is an advantage for the plant

being brought into Turkey as shows there is a healthy supply of young population willing to work so the

company could create jobs for these people.

One of the social system challenges in Turkey is that they have a high level of unemployment. Turkey

unemployment level rose by 38,000 in that year to 2.3 million in 2007 but then in 2008 it rose again by

737,000 from the previous year so this shows that there was a substantial increase from the previous year.

This is a disadvantage to bring in plant into Turkey due to the high level of unemployment as they may

not be skilled workers in the pool of unemployed people. There is another side to this where it can

become an advantage by hiring these unemployed and training them to work sufficiently for the company.

TECHNOLOGICAL

One of the technological strength's in Turkey is the significant development in the ICT sector. During

2001-2007, Turkey's ICT sector expanded so rapidly it expanded by double-digits so that shows that it

was a very successful growth. In 2007, Turkey's ICT market reached $24 billion and in the previous year

it reached $21 billion so this shows that in a space of one year the market grew by $3 billion which is a

very substantial amount of money. The reason for this sharp increase is due to the Turkish

telecommunications sector as they have been privatised by the government. This is an advantage for the

plant being brought into Turkey as this will attract more foreign investment project as well as creating

more jobs for the people of Turkey.

One of the current technological challenges in Turkey is the low expenditure cost on the research and

development. Turkey's research and development cost in 2006 was around 0.6% which is below the

average of the European countries which are at an average of 2.3%.This is an disadvantage for bringing in

the plant into Turkey as there is not that much investment being put into the Turkish research and

development, they will need investment from both the private and public sector because the country will

need to have a healthily amount of investment in order to grow into a country which is in the EU. In the

34 | P a g e

future is the research and development cost are still low then this will erode and stop the competitiveness

of different industries in Turkey which will be bad for the long run.

*LEGAL

One of the legal strength's in Turkeys is the comprehensive legal structure they have. The judicial system

is made up of general courts which deal with domestic cases, heavy penal courts which deal with more

serious case, military courts which will deal with the military cases and the Constitutional Court which is

the highest level of courts that will deal with many different cases which is essential in the Turkish

government such as war crimes. This is an advantage for the plant being brought into Turkey as this

shows that the Turkish government are strict on the law and will enforce the law if need be, it will allow

the company to have a fair trial if any form of disruption were to come up such as trade union issues that

would cause the company any serious problems.

Another legal advantage in Turkey would be the robust framework for the business entities, as the

company who are looking to invest into Turkey will not need to go through a very long and lengthy

business registration process as there is a freedom to start, operate and close a business by the Turkish

regulatory environment. so for example in Turkey, it will take on average 6 day to starting up a business

compared to 43 days in the other world countries which is a much longer time and could be beneficial for

the type of market the company is involved with. As the fashion industry clothe range change very often

and will need to be able to adapt quickly if the plant is being brought over to Turkey.

One of the current legal challenges in Turkey is the judicial inefficiencies as there are some delays in the

Turkish judicial system which can cause some serious issues. There are also judges who are politically

biased and this has affected legal outcome. This is a disadvantage for bringing in the plant into Turkey as

there may be a decision made against the company if ever in a legal battle as the judges may not have an

unbiased view of the case but in fact have a biased view according to the political situation at the time.

ENVIRONMENTAL

One of the environmental strength's in Turkeys is the prosperous biodiversity they have. Turkey has a

very affluent natural resource base and has ranked ninth on biodiversity in the European countries.

Examples of the type of biodiversity they have are not only a range of wild species but important

domestic species such as wheat, lentils, chickpeas, pears, apple, chestnut and pistachios. The biodiversity

has a very great potential for the development for Turkey and this is an advantage for the plant being

brought into Turkey as this will materials such as cotton to be grown in Turkey and used in the plant so

35 | P a g e

the material will be home grown and will have a cheaper price and there will be more jobs created for the

company involved in cotton picking.

One of the current environmental challenges in Turkey is the high pollution levels and the global warming

being caused from the pollution levels. The water treatment facilities, wastewater treatment equipment

and solid waste management in Turkey needs urgent attention as there is high level of environmental

pollution as the is an increase in chemical and detergent overflow and this rises in the air and can cause

severe illness to people who inhale especially in urban areas. The air pollution has increased over the past

since 1990s and is the air pollution is quite severe in the capital of Turkey, Ankara and other city such as

Istanbul. Smog in these cities is due to the increasing number use of cars. Also there is a lot of industrial

air pollution from power plants and facilities used by the fertilizer, cement and sugar industries which

don't have the flirtation equipment needed to filter out the pollution. Turkey loses out on approximately

one billion tons of topsoil annually and this has an increasingly level of environmental pollution and that

could harm the people and economy of Turkey.

The air pollution is a disadvantage for bringing in the plant into Turkey as there many form of pollution in

Turkey which are harmful and could affect the environmental value our company holds and the ‘green'

credential which many of our customers may consider before doing business with our company. Also the

disadvantage is that the contribution to global warming where there are so many efforts to reduce the

green house gas but Turkish government should invest into becoming green so that it could become a

cleaner environment also it may need to cut down on the pollution level as they are in the EU and will

have to meet the pollution level they have planned to cut to.

SWOT ANALYSIS OF TURKEY

STREGNTHS:

The macro perspective created out of the diversity of activity areas;

Serving as a model for other public institutions thanks to the quality of its activities;

A strong technological infrastructure;

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A strong and reliable organizational structure in rural areas in communication with urban regions;

The effective participation of rural financial branches in the formation, application and

orientation of regulations;

An organizational structure that is suitable for fast and accurate decision-making;

The ministry’s position as an experienced, reliable and respectable institution;

Effective exploitation of international channels of cooperation; and

Specialized human resources.

WEAKNESS:

Failing to provide an uninterrupted flow of information between units;

Resistance to change;

An underdeveloped understanding and culture of teamwork;

Inadequate workplaces;

Unnecessary bureaucratic operations and excessive “red tape-ism”;

Lack of sufficient in-service training, experience abroad and foreign language skills;

Lack of performance assessment and award mechanisms;

Insufficient social benefits; and

Failure in long-term planning and policy making.

OPPORTUINITIES:

Steps to be taken on the way to EU membership;

Developments in supervisory techniques and standards;

An increase in the educational level of workers, translating into a higher quality of worker;

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Economic and political stability in the country;

Developing information technology and faster access to information resources;

An increase in the opportunities of international collaboration in the battle against unregistered

economic activity and the “economy of crime”;

A young and dynamic population; and

Increasing interest in the concept of strategic management.

THREATS

Diminishing trust in the EU and a declining belief in Turkey’s membership;

Negative perception on the part of taxpayers about supervision and inspection;

Lack of concern over the fragmentation of public financial management;

Low propensity to save; and

Lack of voluntary cooperation with tax regulations.

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CAPTER:4

SUMMARY OF AN INDIVIDUAL TOPICS (SEM-IV)

GROUP:1

INTRODUCTION OF TURKISH TEXTILE INDUSTRY

This industry plays an important role in generating employment and help to ease the pressure

of high population growth rate.

This industry was also the engine of the export boom Turkey experienced in the first half of

the 1980s.

Although Textile industry has a very significant share in manufacturing employment and

exports, their shares are much lower in manufacturing value added because of low labour

productivity.

TEXTILE INDUSTRY IN TURKEY: AN OVERVIEW

The Textile industry produces one of the most essential consumer products.

The Textile industry has played a significant role in the early industrialization process of

almost all countries since the Industrial Revolution.

As other developing countries, the Textile industry has played an important role in the

process of industrialization of Turkey.

Sumer bank was established in 1933 to develop a number of industries, including the Textile

industry of Turkey.

The share of state-owned establishments in textiles employment declined sharply from 18%

in the early 1980s to 2% in 2000.

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As a labour-intensive industry, employment shares of Textile industry show significant

increases since 1980.

The share of textiles fluctuated around 20% since the mid 1990s, and then jumped to 24-

25% in the second half of 1990s.

Textile industry was behind the export boom in the 1980s.

The share of Textile industry in total export revenue doubled from 1980 to 1995.

As a result of rapid increase in imports from Turkey, the EU started to impose quantitative

restrictions on Turkish exports in 1984.

These restrictions were eliminated after the customs union in 1996.

Although the share of Textile industry in total imports is still very low, it had a sharp increase

from 1981 to 1995.

TURKEY REMAINS AN IMPORTANT TEXTILE MANUFACTURING

COUNTRY

The Republic of Turkey - located at the crossroads of south-eastern Europe and western

Asia - has a textile manufacturing history dating back to the 16th century.

Today, Turkey's textile industry is a generator of economic activity and simultaneously

ranks among the leading exporters globally.

Turkey is a vibrant emerging economy with a rich cultural heritage located at the

Crossroads of Europe and Asia.

Turkey, a large country which has served as a key regional trade hub for centuries given

its strategic location and maritime control of key waterways between the Black and

Aegean Seas.

Though lacking in natural resources, Turkey benefits from large tracts of rare able land,

miles of coastline, and a young and growing population.

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SECTORS OF TEXTILES

Technical Textiles and Nonwovens Industry in Turkey

Textile and Clothing Supplies in Turkey

Textile Machinery and Equipment Industry in Turkey

Turkey's Cotton Textile Industry

PERIODIC ANALYSIS OF TURKISH TEXTILE INDUSTRY

From Past to Today :1923-1933

From Ottoman Empire, 8 cotton 4 woollen spinning mills (80 000 spindle, 762 weaving

frame).

Main Investment by the State: 1933-1952

Sumer bank: The state owned factories all over the country.

Sumer bank is the core factor in development of today’s Turkish textile industry.

In 1952, 59% of spinning and 63%of Weaving was belonging to Sumer bank factories.

Private Sector Period: 1953-1962

Shift from state to private sector

In 1962, 60% of spinning and 62% of weaving belong to the Private Sector

1963-1972

I and II. State Development Plans

Aim: Turkish textile industry to stay alive by its own national suppliers so that it can get

stronger

Increase in spinning capacity by 79%, weaving capacity by 75%

In 1972, 51 million USD textile product Export

Creation of a Textile Industry Based on Exports: 1973-1982

Incentives for new factories

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In 1976, 160million USD textile products export (25% of six EEC countries’ import)

First significant export in apparel products

Boom in Production and Export: 1983—1988

Golden period

Approx. 35% increase each year in apparel Exports

Stable Period: 1989—1993

Production and export in textiles: Stable

Increase in apparel industry

Increase in yarn and fabric import

Tendency for more value-added products in apparel

GROWTH OF TURKISH TEXTILE INDUSTRY FOR LAST DECADE

The industrialization hard work of the 60's and 70's gave birth to the modern textile industry

in Turkey.

At the beginning, this sector was operating as small workshops.

But the segment showed speedy progress and during the 1970's began exporting.

nowadays, Turkey is one of the vital textile and clothing producers and exporters in the

world.

Turkey's textile and clothing manufacturers began relocating production in Eastern Europe

and Central Asia.

In the last 3 years, Turkish textile and apparel companies faced raising difficulties, after

having substantially succeeded in the eighties and the first part of the nineties.

The textile and apparel sector has been the stamina of the Turkish economy with a vital

role to play in the industrialization process and market orientation of the economy in the

last two decades.

In the 1980s, it was the leading sector related to the global economy and the export

revenues of this hard currency earning sector contributed substantially to the overall

economy.

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The textile sector continued to be one of the major contributors to the Turkish economy,

being one of the fastest growing segments in the 1990s with an average 12.2% annual

growth, while the Turkish economy had an average growth of 5.2% per year.

Total investment in the segment exceeded US$ 150 billion, of which more than US$ 50

billion was invested in the last 5-10 years.

Textile industry started out in the 1960s in small workshops, have rapidly developed and

transformed Turkey into a global competitor.

The total number of firms in the sector, dominated (95%) by the private sector, number

around 44,000 and 25% of them are active exporters.

The apparel industry is constituted mainly (80%) of small and medium sized firms

whereas the technology-intensive textile production has been undertaken by large-scale

companies.

Today, around 20% of Turkey's 500 largest companies are involved in the textiles and

apparel sector.

Little labour expenditure, a capable workforce, comparatively cheap raw materials have

played an important role in the significant growth of the sector; as well as a liberalized

economic environment and export-led policies in the last two decades.

The production value of the sector is over US$ 20 billion. Employment in the segment is

anticipated to be about 4 million people (2.5 million employed directly and an additional

1.5 million not directly through the sub-segments).

Official figures also reveal that approximately 500,000 employees in the sector due to

unregistered labour force.

The apparel sector exports approximately 60% of its production.

Capacity utilization rates are approximately 75% especially among exporting

manufacturers.

Turkey ranks also among the top ten global producers of wool cloth, carpets, synthetic

filament and fibber, polyester & polyamide filament.

While Europe's 3rd largest polyester producer is a Turkish-US joint venture, Turkey's

synthetics production mounts to 15% of Western Europe's capacity.

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Textiles and clothing are among the most important sectors of the Turkish economy and

foreign trade.

Accounting for about 6-7% of the GDP together, these two sectors are the Core of

Turkish economy in terms of GDP contribution; share in manufacturing, Employment,

investments and macroeconomic indicators.

These sectors had an 18.5% Share in total export volume in 2011.

There are more than 40,000 textile and clothing Companies in Turkey with an estimated

labour force of 750,000 human resources.

Turkey is one of the main actor in the global clothing industry.

Turkey ranks 8th

in world cotton production and 4 in world cotton consumption.

Turkey also ranks 3rd

in organic cotton production after India and Syria.

The Turkish clothing industry is the 6th

largest supplier in the world, and the 2nd

biggest

contributor to the EU.

It has a share of 4% in knitted and clothing exports and it ranks 5 among the exporting

countries.

With a share of 2, 6%, Turkey ranks 10 among the woven clothing exporters in the

world.

The Turkish textile industry, which is listed in the world’s top 10 exporters, is also the 2nd

major supplier to the EU. The Turkish textile and clothing manufacturing has a

significant role in world trade with the capability to meet far above the ground standards,

and can fight in international markets in terms of high quality and a wide range of

products.

The established capacity of woven production in Turkey is estimated to be around

1.350.000 tons while that of knitted products is approximately 2.250.000 tons. In current

years, pantyhose, tights, stockings, socks and other hosiery production in Turkey shows a

faster growth and with the new investments it is estimated to have reached a production

capacity of 200 million dozens per annum.

Textile factories are 42% of all in the region

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COMPETITIVENESS OF THE TURKISH TEXTILE & CLOTHING

INDUSTRIES

COMPETATIVE POSITION OF TURKEY IN THE WORLD

It is necessary to explore the competitive position of Turkish producers in the EU and the

US markets, as they are major markets for Turkish textile products.

Turkish textile firms have also succeeded in increasing their market share by 1% from

2% in 1991 to in 2000.

It is interesting to observe that there is no break in market share trend around 1996 when

Turkey joined the customs union with the EU.

Outward processing trade is quite important in explaining textile trade flows between the

EU and the East European and the Mediterranean Basin countries.

The EU firms started to relocate their labour-intensive (assembly) operations towards

those countries to reduce production costs.

Turkish producers have substantially increased their markets shares in the last decades.

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Turkish producers tend to gain ground in most of the rapidly growing markets and they

charge relatively higher prices for main product categories.

Textile imports from Turkey have grown at a very high rate 19.0% for textiles (the 1990-

2001 periods).

The price effect in the case of textile products is, on average, negative in the last five

years, i.e., Turkish textile products are getting relatively cheaper.

On the other hand, the market share effect is quite substantial except the last year, 2001,

that merely reflects rapid penetration of Turkish textile products into the US market.

The market share effect alone explains on average 13.7% annual growth in textile exports

to the US.

As in the case of Turkish Textiles exports to the EU, there is a strong negative correlation

between relative price effect and market share effect for Turkish Textiles exports to the

US whereas the correlation is much lower for Chinese imports.

Turkey has a higher and growing market share in textiles.

A COMPARISON BETWEEN TURKEY AND MAJOR PRODUCERS

This section identified a number of global competitors for Turkish textile producers that

have increased their market shares in the last decade: in the EU market, some Asian

countries (India, China and Bangladesh), East European countries (Poland, Romania and

Czech Republic), and Mediterranean countries (Tunisia and Morocco); in the US market,

Latin American countries (Mexico, Honduras and Dominican Republic), and Asian

countries (China, Thailand, Indonesia, India and Bangladesh). Domestic producers (EU

and US producers) should also be added to this list of competitors.

The share of textile in manufacturing value added is inversely related with the level of

economic development (as measured by output per capita).

The value added share has remained constant in a few countries (Indonesia, Italy and

Turkey) or declined in most of them.

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The only exception here is Pakistan where the share of textile has increased to some

extent.

Turkey's competitors, China, South Asian countries, Poland and Hungary, and Morocco

have very low and declining relative productivity levels (on average, 2-10% of the US

level). Tunisia performs better (36% in textile and 17% in clothing in the late 1990s).

East Asian countries (Japan, Korea and Hong Kong) are the only countries that have

substantially improved their relative productivity levels.

China and South Asian countries have quite low wage rates (2-10% of the US level).

Wages are relatively higher in Tunisia and Morocco (35% and 15%, respectively, in the

second half of the 1990s).

The relative wage level for Turkey fluctuates within the 15-30% range with the mean

around 20% of the US level.

The relative productivity level in Turkey is substantially higher than the relative wage

rate level especially in clothing (The ratio of relative productivity/relative wage is more

than 1.5 in the late 1990s).

Turkey has a strong competitive position as the wages are relatively low in Turkey.

Among all other competitors, only South Asian countries have such a high ratio in the

textile production.

Although it is less productive than major EU countries and the US, the wage differential

compensates for low productivity and makes Turkish producers competitive.

Moreover, the wage differential between Turkey and the EU countries tend to widen

over time.

With the exception of Korea, who is not one of the main competitors for Turkey, there

seems to be no significant change vis-a-vis other developing countries in terms of labour

productivity and wages.

The historical data on productivity and wages suggest that Turkish exporters are likely to

be competitive in major markets in the near future on the basis of very low wages.

The failure in improving relative labour productivity deters increases in relative wages as

well, and prevents structural transformation in the economy

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LIST OF TEXTILE COMPANIES IN TURKEY

Anka Textile

Erdem Tekstil

Beymen

Network

Kiğilı

Mavi Jeans

Sarar

Oztas

Vakko

OZRA Textile Ltd

Karaca

Damat

Beymen

Bisse

Altınyazı Gomlek

Rodi

LCW

Colins'

De Facto

X-Side

Seven Hills

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INNOVATION & INITIATIVES

Although Textile industry are regarded “traditional” sectors using “mature” product and

process technologies, product innovations have become an significant factor for

competitiveness.

New product characteristics (inflammable, flexible, wrinkle-proof materials, etc.), and

new products (technical textiles, eco-textiles, etc.) have become increasingly more vital.

The industry could defend its competitive position in the near future

i) by adopting new marketing strategies (developing their own brands, establishing

new promotion channels, combine with their strategies with the EU and US

companies),

ii) by specializing in niche markets, and

iii) By being innovative in generating and adapting new products (/technical textiles,

eco-textiles, etc.) and processes (non-woven fabrics, et cetera.).

These strategies would be successful only if they are complemented with a supportive

technological and legal infrastructure.

So, the community policy could aim at providing incentives for R&D activities,

encouraging the development of supplier industries and developing a system of standards

and accreditation.

Macroeconomic policies falling, for instance, exchange rate uncertainty are also

important in supporting the Textiles industry.

The public policy should also aim at changing the structure of the industry.

The productivity of textile industry should certainly be increased, but this process needs

to be accompanied by the reallocation of resources towards more productive sectors of

the economy so that wages, per capita income, and living standards could be improved in

the long run.

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RECENT INITIATIVES FOR COMMON RESEARCH CENTERS FOR

TEXTILES&APPAREL COMPANIES İSTANBUL TEXTILE AND APPAREL R&D

CENTRE (ITA)

The Fashion and Textile Cluster (FTC) project represented by Istanbul Textile and

Apparel Exporter’s Union

ISTANBUL TEXTILE AND APPAREL R&D

New support programs

Tax incentives R&D departments of companies

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Incentives for companies for market seeking, exhibitions, opening overseas stores,

branding activities, machinery modernization

Focusing on R&D and Innovation activities more and more

Alternative markets for Turkish exporters to diversify the risks

Branding and creative design issues are hot topics in the agenda

Istanbul has becoming Fashion Centre of the region

Textile doesn’t have to be the sector only for poor and developing countries Innovation

and new value-added products including technical textiles: The buzz words

Productivity remain as one of the key issues for Turkish textile & apparel industry

Competitiveness will continue: Analysis of changing customer attitudes Active marketing

Needs re-shape its position from being supplier only to creator of own market

RESTRUCTURING

The industry is undergoing a major restructuring because of increased competition from

low cost products from China in the European Union and the U.S., Turkey’s major

markets for textiles.

Particularly hard hit have been Turkish ready-wear manufacturers, who are seeing their

profits decrease and markets shrink.

The strong Turkish Lira alongside the U.S. dollar and the euro and rising domestic labour

and energy costs are also making many ready-wear producers uncompetitive.

Nevertheless, Turkey's vast clothing and apparel industry is changing its image from a

mass producer of ready wear for manufacturers, fashion houses and department

provisions in western Europe and the United States to a creator and retailer of new

designs, fashions and superiority labels, turning out higher end and higher priced

products for upper income families.

This is reflected in Turkey’s trade figures. even though the industry contracted by a total

18 percent in 2006 and 2007, according to the Istanbul Chamber of Commerce, textile

exports increased 17.31 percent in the same period over 2006.

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Scores of leading Turkish clothing manufacturers are beginning to open their own fashion

stores, building sales networks abroad, forming joint ventures with foreign distributors

and acquiring retail chains to sell their own brands, and even buying popular Western

labels.

Turkish clothing manufacturers say that they must create and market their own brands,

produce higher value-added apparel abroad and focus more on technical textiles, based

on synthetic fibbers and non woven’s rather than on cotton, to survive the Chinese and

Indian onslaughts.

The industry is expected to lose 30 percent of its market share in the European Union

(EU) as low cost products from China flood the market in wake of the lifting of EU

quotas on all textiles from the Asian country, according to one study.

“The expected decline in the market share of Turkey in the EU’s net textile and clothing

imports will result in a net damage of $2.5 billion. Such a loss accounts for 3.5 percent of

Turkey’s projected export figures,” Özgür Altuğ, chief economist of Raymond James

Securities, wrote in a report on the Turkish textile industry.

Altuğ also warned that Turkey could lose as much as 10 percent market share in its

textiles (cotton yarn, fabrics, home textiles, synthetic fibers, yarns and fabrics) in the

United States, a major market for textile products, as China and India raise their market

share.

To preserve their foreign markets and find new ones, some 50 Turkish ready-wear

manufacturers have invested in factories in the low labor cost countries of Tunisia,

Bulgaria, Egypt, Uzbekistan, Jordan, Moldova, China, Russia, Pakistan, Sudan and the

Czech Republic and the Gaza Strip. Another 100 Turkish firms -- mainly ready-wear

companies -- are planning to invest a total $4 billion in a special industrial zone in Egypt.

Turkey’s ready-wear manufacturer Söktaş and the International Finance Corporation are

planning to invest $80 million together in a shirt fabrics manufacturing plant in India.

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GROUP:2

OVERVIEW OF THE STEEL INDUSTRY IN TURKEY

Turkey was Europ’s third largest producer of steel and ranked 11th

in the world. The Turkish iron

and steel sector is in existence since 1930.

Turkey is a major player in world steel production and exportation with the record of producing

quality products to meet the market needs.

Initial Time:

In 1966 Turkey agreed with European Coal and Steel Commission to abolish customs duties on

bilateral steel trade. The agreement allowed Turkey to trade its iron and steel products freely

with all EU member states.

The Turkish steel industry saw considerable growth and innovation over last 20 years. Which

reflect a commitment to respond to the evolution in world steel market. The turkey has expanded

exponentially over the past 5 years in response to strong world demand for quality steel

products.

The liberalization of economy of Turkey during 1980s was a turning point for the development

of the Turkish economy as well as for the iron and steel industry in particular.

That period was a period of great progress for the Turkish iron and steel industry. Which began

with the establishment of electric arc furnacemills. Progress has continued unabated. And today

turkey has 18 electric arc furnaces with a capacity range from 500,000 to 2.5 million tones(mt).

and its integrated parts have capacities ranging from 1.1 to 3 million tones.

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Current Performance:

Today all the steel producing companies in Turkey are privately held, and Turkish steel makers

continue to pursue technological developments to enhance long term viability of the industry in

the global marketplace.

The Iron and Steel industry has became one of the most developed sectors in Turkey and today it

count as the third largest contributor to the Turkish economy.

According to a report by Turkish Iron and Steel Producers Association (TISPA), Turkey has

shown stable growth in steel between 2000 to 2008. But in 2009 turkey’s steel production

capacity reached around 38.5 mt which is 94% from 19.8 mt in 2000.

Despite of financial crisis Turkey’s steel industry continued its investments and steel production

capacity rose around 4.4 mt compared to 2008.

Electric furnace based steel production capacity of Turkey grew by 120 percent from 13.6 mt to

29.9 mt and BOF based production by 37 percent to 8.5 mt during the same period.

The new level of crude steel is 78 percent higher than it was in 2001, touching 25.3 mt

representing a huge boon for the industry.

Turkey showed the best performance after China in 2009 among the top 15 streel making

countries. At that time Turkey moved up to 10th

place in the world and 2nd

in Europe.

Turkey has become one of the largest traders of steel and steel articles.

Iron and steel exports accounted for US $15.2 billion in 2007 including crude and all kinds of

finished goods. The sector now boasts of over 1,000 foundries and 20,000

Employees nationwide, making it a vital component of the Turkish economy.

Steel production in Turkey has increased significantly year-on year since 2001, growing from

14.9 mt in 2001 to 26.8 mt in 2008.

After entirely compensating the losses of the crisis period by growing 15 %, production growth in

the world steel industry slowed down to 6.8 % in 2011.

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Compared to the previous years, it is observed that Chinese effect in the world steel industry

growth continued to ease. Chinese steel production growth leveled off to 9-10 % levels during

the last 2 years after growing consistently by 20 % in 2000’s.

In comparison to 2010, production of Japan and Spain dropped and growth rate of the USA,

India, Russia, Germany, Ukraine, Brazil and France, stayed below the world average.

While world crude steel production growth dropped from 15 % to 6.8 % in 2011, Turkey

achieved 2 percentage points higher growth rate of 17 % compared to 2010.

With this growth rate of around 2 times higher than the Turkish economy growth, Turkey

became the top growing country among the 30 largest steel producers.

In fact, Turkey is the third fastest growing steel producer in the world.

The Domestic Demand:

Turkey has also proven to be a good consumer of iron and steel, with consumption up to 18.5 mt

.a 110 percent increase since 2001.

Growth of the industry in Turkey has been driven in part by strong domestic consumption.

In the three years from 2005 to 2008 per capita crude steel consumption in Turkey has increased

considerably.

The recent years have witnessed a strong international demand for steel and Turkey is well

placed to meet future increases in international demand for steel.

Capacity

Increasing by 10% in 2011, Turkey’s crude steel production capacity reached around 47 million

tons level, up from 42.7 million tons in 2010.

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Steel Production in Turkey

Turkey’s crude steel production reached a record high of 34.1 million tons in 2011 up by 17 %

yoy. Owing to the high production growth performance, this is also the highest among the top

steel producers of the world.

Turkey’s crude steel production surpassed the pre-crisis production of 2007 by 32.2 %. In this

respect, Turkey has been the 4th producer in terms of carrying its production beyond the pre-

crisis level after China, India and South Korea.

However, it is observed that the production of Spain, France, Ukraine, USA, Japan, Germany,

Italy and Russia has not caught the pre-crisis levels yet.

Turkey’s billet production grew by 11.8 % to 24.4 million tons in 2011. With the support of new

capacities came on stream, slab production continued its sharp rise by 33 % to 9.7 million tons

after growing by 53 % in 2010.

As new steel production facility investments are all focused on EAF route, EAF mills accounted

for 88 % of the total crude steel production upsurge of 4.96 million tons. While total crude steel

production of EAF mills rose by 20.9 % to 25.28 million tons, expansion in the crude steel

production of BOF route stayed at 7.2 % to 8.83 million tons.

Turkey’s Steel Export:

The Iron and Steel Industry is the third largest exporting sector in the Turkish economy and is

becoming one of the major forces driving Turkish exports.

Turkey is the world's leading exporter of Rebar (reinforced bars), and international demand for

Turkish steel products is high.

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In 2008 the country exported $19.36bn worth of steel products, such as semi products(billet),

long-flat, pipe, construction products and appliances, etc. for 19.64 million tones, an increase of

70 percent and 21 percent respectively on 2007 figures.

The biggest markets for Turkish steel exports were the Middle East and the Gulf region (37

percent), North Africa (26 percent), SU-27 (15 percent) and Far East (9 percent).

Turkey’s total iron and steel exports, including the articles of steel and steel pipes, reached 18.54

billion USD up by 5.3 % in terms of tonnage, and by 25.2 % to 16.63 billion USD in terms of

value.

Turkey’s semi finished steel export dropped sharply by 34.3 % to 2.45 million tons in 2011.

Most remarkable export growth was seen in flat products due to the increasing capacity and

production, which grew by 51 % to 2.3 million tons in terms of tonnage and by 65 % to 1.94

billion USD in terms of value.

Long products export, which is the largest product group that Turkish steel industry traditionally

exports, rose by 14 % to 10.5 million tons and 38 % to 7.36 billion USD.

In this respect, while share of semi finished products in Turkey’s total steel export declined from

21 % to 13 %, share of flat steel products stepped up from 9 % to 12 % and share of long

products from 52 % to 57 %.

In terms of regions, because of the social and political instabilities, largest export drops in

Turkey’s total steel products export excluding articles of steel and steel pipes, is seen in Middle

East and North Africa Regions.

Turkey’s steel products exports to Middle East and Gulf Region, which is the biggest export

market of Turkish steel fell by 13.6 % to 6.36 million tons.

Exports to North Africa Region, which had been the second biggest export market for Turkish

steel products declined by 27.5 % to 1.56 million tons, moving the region to the third place

among the biggest export markets.

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In 2011 EU became the 2nd largest export market for Turkish steel products, with the help of the

first half strong performance. Export to the EU rose by 59 % to 2.28 million tons.

List of Major Players in Steel Industry of Turkey:

Five companies have been named among the world’s biggest steel producers in the list of World

Bulletin’s Annual List.

Erdemir Group

Habas Steels

Icdas steels

Diler Group

Colakoglu Metalurji

These Turkish companies were included in the world’s leading steel & metal markets publication

metal Bulletin’s “Biggest steel producer” list.

OVERVIEW OF STEEL INDUSTRY IN INDIA

After independence, successive governments placed great emphasis on the development of an

Indian steel industry. In Financial Year 1991, the six major plants, of which five were in the

public sector, produced 10 million tons. The rest of India steel production, 4.7 million tons, came

from 180 small 29 plants, almost all of which were in the private sector.

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Initial Time:

At the time of Independence in 1947 India's steel production was only 1.25 Mt of crude steel.

Following independence and the commencement of five year plans, the Government of India

decided to set up four integrated steel plants at Rourkela, Durgapur, Bhilai and Bokaro.

The Bokaro plant was commissioned in 1972. The most recent addition is a 3 Mt integrated steel

plant with modern technology at Visakhapatnam.

Steel Authority of India (SAIL) accounts for over 40% of India's crude steel production. SAIL

comprises of nine plants, including five integrated and four special steel plants. Of these one was

nationalized and two were acquired; several were set up in collaboration with foreign companies.

SAIL also owns mines and subsidiary companies.

In conclusion, it can be said with a certain measure of confidence that India’s iron and steel

industry which had a glorious past and has an uncertain present may now look forward to a

bright future.

Current Scenario:

Immense growth potential in Indian Steel Sector

Domestic crude steel production grew at a compounded annual growth rate of 8.4% in the last

few years.

Crude steel production capacity of the country is projected to be around 110 million tonne by

2012-13.

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Increase in the demand of steel in India is expected to be 14% against the global average of 5-6%

due to its strong domestic economy, massive infrastructure needs and expansion of industrial

production.

Demand of steel in the major industries like infrastructure, construction, housing, automotive,

steel tubes and pipes, consumer durables, packaging and ground transportation.Target for $ 1

trillion of investments in infrastructure during the 12th Five Year Plan. Infrastructure projects

(like Golden Quadrilateral and Dedicated Freight Corridor) will give boost to the demand in the

steel sector in near future.

China remained the world’s largest crude steel producer in 2011 (684 mt) followed by Japan

(108 mt), the USA (86.4 mt) and India (72.2 mt; prov) at the 4th position.

As per The WSA, global apparent steel use increased by 3.6% to 1422 Mt in 2012, following

growth of 5.6% in 2011.

In 2013, it is forecast that world steel demand will grow further by 4.5% to around 1486 Mt.

China’s apparent steel use in 2012 and 2013 is expected to increase by 4% in both the years.For

India, growth in apparent steel use is grown by 6.9% in 2012 and it is expected to grow by 9.4%

in 2013

Steel Production and Consumption in India

The Indian steel industry witnessed a period of strong growth in the period of 2003-07, with

production and consumption increasing at CAGR of 13% and 11% respectively.

But after the global financial crisis and liquidity crunch, domestic production and consumption

remained flat in 2009. However, demand has picked up recently, stimulated by a huge thrust in

infrastructure development and robust growth in automobiles.

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DEMAND OF STEEL IN INDIA:

Driven a booming economy and concomitant demand levels, consumption of steel has grown by

12.5 per cent during the last three years, well above the 6.9 percent envisaged in the National

Steel Policy.

Steel consumption amounted to 58.45 mt in 2006-07 compared to 50.27 mt in 2005-06,

recording a growth rate of 16.3 per cent, which is higher than the world average.

During the first half of the current year, steel consumption has grown by 16 per cent. A study

done by the Credit Suisse Group says that India's steel consumption will continue to

grow by 17 per cent annually till 2014, fuelled by demand for construction projects worth US$ 1

trillion. The scope for raising the total consumption of steel in the country is huge, as the per

capita steel consumption is only 35 kgs compared to 150 kg in the world and 250 kg in China.

With this surge in demand level, steel producers have been reporting encouraging results. For

example, the top six companies, which account for 70 percent of the total production capacity,

have recorded a year-on-year growth rate of 13.4 per cent, 15.7 per cent and 11.7 per cent in net

sales, operating profit and net profit, respectively, during the second quarter of 2007-08 We

expect strong demand growth in India over the next five years, driven by a boom in construction

(60%-plus of steel demand in India).

Soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad,

has put India's steel industry on the world steel map.

Demand-Availability Projection

Demand – Availability of iron and steel in the country is projected by Ministry of Steel in its

Five Yearly Plan documents.

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Gaps in availability are met mostly through imports. Interface with consumers by way of a Steel

Consumers’ Council exists, which is conducted on regular basis. Interface helps in redressing

availability problems, complaints related to quality

EXPORT AND IMPORT OF STEEL BY INDIA

Iron & steel are freely exportable. Advance Licensing Scheme allows duty free import of raw

materials for exports.

The steel exports of India over the decade have the compounded annual growth rate (CAGR) of

22.27% against CAGR of imports of steel, which accounted 14.20% in the respective period.

In 1991-92, very inception of the Liberalization, the steel exports amounted to 368

thousand tons, which increased year-by-year and reached to 5221 thousand tonnes in 2003-04. It

accounted for thirteen-fold increase over the period.

The Annual growth rates of exports of steel for the period showed the fluctuating trend, which

ranged between –14.41% in 1994-95 and 101.36 in 1992-93. In 2003-04, the growth rate was

15.87 %.

Last five year’s export of total finished steel (alloy + non alloy) is given below:-

Indian steel industry : Exports (in million tonnes)

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Category 2007-08 2008-09 2009-10 2010-11 2011-12*

Total Finished Steel (alloy + non alloy) 5.08 4.44 3.25 3.64 4.04

Imports:

Iron & steel are freely importable as per the extant policy.

The imports are also growing. In 1991-92, the imports of steel amounted to 1043 tonnes. But in

1999-2000, it touched 2200 tonnes, which is the highest import of steel

in India, and then the imports went down and reached 1650 tonnes in 2003-04.

In 1991-92, the year of liberalization, the imports of steel in India exceeded over the exports of

steel. But in the following years the trend changed. From 1997-98, India exported steel and steel

products which was more than its imports of steel and steel products.

Last five year’s import of total finished steel (alloy + non alloy) is given below:-

Indian steel industry : Imports (in million tonnes)

Category 2007-08 2008-09 2009-10 2010-11 2011-12*

Total Finished Steel (alloy + non alloy) 7.03 5.84 7.38 6.66 6.83

Source: Joint Plant Committee; *provisional

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Major Players in Steel Industry of India

Among these top companies there are some Public Players there like SAIL, RNIL etc.

While TISCO, ESSAR, ISPAT, JSWL etc are Private Players.

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GROUP:3

OVERVIEW OF PHARACEUTICALS INDUSTRY

INTRODUCTION

Today pharmaceuticals have become an indispensable part of health care system around the

globe. Historically pharmaceuticals have played a vital role in the human development by

improving the quality of life and reducing the time spent in the hospitals. Thanks to innovative

pharmaceutical industry that almost all epidemics and chronic diseases are curable today. Due to

its direct link with the welfare and wellbeing of human beings pharmaceutical industry is of

strategic importance for the development of a healthy and productive nation. Today,

pharmaceutical industry is considered to be one of the largest and rapidly growing global

industries. It is a major source of employment generation and foreign exchange earnings for

many countries around the globe.

However, despite all these extraordinary achievements it’s a harsh reality that every year

millions of people die across the world, mostly in low income developing countries, due to

unavailability and inaccessibility of necessary medicines. According to the World Health

Organization (WHO), on average, 30% of the world population lacks access to life-saving

medicines; whereas, in some countries in Asia and Africa, the number may be as high as 50%

(Roger Bate, 2008). Many developing countries, including some OIC member countries, has

insufficient or no manufacturing capacities in the pharmaceutical industry. Local industry covers

a tiny fraction of domestic pharmaceutical demand and they rely heavily on imports and

medicinal aid. In addition, the share of medicines in “Out-of-pocket” health payments (i.e. paid

by the patient) is ranging between 40 to 60% in these countries. Consequently, medicines are

neither available nor accessible to a large fraction of population and hundreds and thousands of

people die of preventable and treatable diseases.

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PHARMACEUTICAL PRODUCTION AND CONSUMPTION:

WORLDWIDE TRENDS

The global pharmaceutical industry has shown rapid growth over the years and emerged as one

of the fastest growing industries in the world. However, world pharmaceutical production and

consumption is still unevenly dispersed around the world with the developed countries as the

leading producers and consumers of pharmaceuticals. According to IMS Health (an international

consulting and data services company), in 2010, world pharmaceutical market was valued at US$

875 billion with a growth rate of 4.1% over the previous year at the constant exchange rate. The

volume of pharmaceutical industry has surged from US $ 647 billion in 2005 to US$ 875 billion

in 2010, corresponding to an increase of 35.2%. During this period, the industry’s growth rate

has witnessed a declining trend from 7.2% in 2005 to 4.1% in 2010. This decline is mainly

associated with the slowdown in economic activity, especially in the developed countries which

consume a large chunk of global pharmaceutical products. In 2008, economic slowdown in

developed countries culminated into one of the worst global financial and economic crisis since

the Great Depression. The negative effects of this meltdown of historic magnitude were felt

across the globe and all sectors were hard hit. The pharmaceutical industry was not an exception

and it has witnessed one of the lowest year-on-year growth rates of 6.1% in 2008. In 2009,

however, the negative effects of the crisis subsided and global economy has started to recover.

These positive developments helped the global pharmaceutical industry to rebound to its pre-

crisis level and its growth rate climbed to 7.1% in 2009 (Figure 1). Global pharmaceutical

market, both in terms of production and consumption, is highly concentrated in the developed

regions. In 2010, North America (38%), Europe (29%) and Japan (12%) accounted for nearly

79% of global market. On the other hand, developing regions with a share of nearly 85% of

world population, accounted for only 21% of global pharmaceutical consumption in 2010

(Figure 2). A breakdown of pharmaceutical market in developing world reveals that Asia,

Australia and Africa represent nearly 15% whereas Latin America accounts for 6% of the global

pharmaceutical market.

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MAJOR PHARMACEUTICAL COMPANIES OF THE WORLD

Company HQ location

Revenue of

pharmaceutical

segment, mln

USD

Total sales,

mln USD

Share of

pharmaceutical

segment, %

Pfizer NY, U.S. 46,133 52,516 87.85%

GlaxoSmithKline UK 31,434 37,324 84.22%

Johnson &

Johnson NJ, U.S. 22,190 47,348 46.87%

Merck NJ, U.S. 21,494 22,939 93.70%

AstraZeneca UK 21,426 21,426 100.00%

Novartis Switzerland 18,497 28,247 65.48%

Sanofi-Aventis France 17,861 18,711 95.46%

Roche Switzerland 17,460 25,168 69.37%

Bristol-Myers

Squibb NY, U.S. 15,482 19,380 79.89%

Wyeth NJ, U.S. 13,964 17,358 80.45%

Abbott IL, U.S. 13,600 19,680 69.11%

Eli Lilly IN, U.S. 13,059 13,858 94.23%

Takeda Japan 8,648 10,046 86.09%

Schering-Plough NJ, U.S. 6,417 8,272 77.57%

Bayer Germany 5,458 37,013 14.75%

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TURKEY’S PHARMACEUTICAL OVERVIEW

In the Central Asian region, Turkey emerged as a promising pharmaceutical market. Today,

Turkey is the largest pharmaceuticals producer in the OIC and is ranked 16th among the world’s

35 leading producers. There are 134 pharmaceutical companies operating in Turkey and

domestic industry meets 90% of local demand. In 2006, Turkey produced US$ 3947 million

worth of medicines compared to US$ 1932 million in 2000 (Export Promotion Centre of

Turkey). Turkish pharmaceutical industry and market has great growth potential and is placed in

a group of countries called “Pharmerging Markets” which represents fastest growing

pharmaceutical markets in the world.

Turkey, being the sixth largest pharmaceuticals market in Europe and largest pharma market in

the Middle East, has seen significant changes in health policies and social security during the

past years, paving the way for a solid growth in the pharmaceutical market. The sector faced

fundamental regulatory reforms in the last five years aligned with that of the EU and is one of the

few industrial sectors in Turkey where the government has strict control over prices. The

introduction of a new Research & Development law in 2008 aims at a boosting of local R&D as

well as increasing the R&D investments of global corporations into Turkey by primarily offering

tax incentives for R&D expenditure

3.2 MARKET STRUCTURE

There are two types of production companies on the pharmaceutics market in Turkey:Original

drug producing companies: these companies produce and distribute under patent protection.

They incur the costs of drug discovery, bear the burden of safety and efficacy of the drugs

through clinical trials, and make marketing efforts. For as long as a drug patent lasts, a brand

name company enjoys a period of market exclusivity in which the company is able to set the

price of the drug at a level which maximizes profitability. This price often greatly exceeds the

production costs of the drug, which can enable the drug company to make a significant profit on

their investment in R&D, thus enabling them to fund the research and development of new

medicines.

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Equivalent Generic drug producing companies: these companies produce and distribute drugs

without patent protection and generatly operate on small regional level. Companies incur fewer

costs in creating the generic drug and therefore are able to maintain profitability at a lower cost

to consumers. When these generic products become available, the market competition often leads

to substantially lower prices for both the original brand name product and the generic forms. The

market for generics in Turkey is strong, with a high domestic production. Most of them are

branded and supported by intensive promotion activities. Government policies supporting the

growth of the generic industry increase the export potential of Turkey.

3.3 MARKET SALES & CONSUMPTION

The Turkish prescribed pharmaceutical market has reached 14,1 billion Turkish Lira (9,1$ bn)

and 1,4billion units by volume in 2009. The growth rate of the market in terms of lira is 3,1%

and 3,9% by 2volume. The prescribed pharmaceutical market, including both original and

generics drugs, accounts for 90% of the whole Turkish pharmaceutical market. In 2000, officials

passed the law regarding nonprescription drug regultions in order to take control of the market.

However, despite the newregultion non-prescribed drugs still have a 10,2% (1,2$ bn) market

share in Turkey. The per capita pharmaceuticals consumption was 132 dollar. Turkey’s large and

growing population with a rise in life expectancy and increasing older population together with a

relative low pharmaceutical consumption per capita offer high growth for potential.

In 2009, there are 7,413 pharmaceutical products in the market. 4,928 of these are prescribed

products. The share of imported products in the Turkish pharmaceutical market was around

21,7% by volume in 2009, where the majority of imports comprised original products. On the

other hand, local production was around 78,3%, with generic products accounting for 72% of

total

3.4 PRODUCTION

Turkey has a developed pharmaceutical industry in terms of production standards, technology

andcapacity. The production facilities have been inspected continuously by the Ministry of

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Health, and accredited internationally by International Accreditation Authorities.Turkey does not

participate in the Pharmaceutical Inspection Convention and Pharmaceutical Inspection

Cooperation Scheme (PIC/S). However, after the application of Good Manufacturing

Practices (GMP) in 1984, the Turkish Pharmaceuticals Industry today reaches a technological

level, which can almost be compared to European Union countries except in biotechnology and a

few brand new pharmaceuticals production technologies. Pharmaceuticals groups, which are not

locally produced, are restricted with some high-tech or biotechnology products.

Pharmaceutical industry is mainly concentrated in the Marmara Region especially in provinces

of İstanbul, Kocaeli and Tekirdağ. Better infrastructure, easy supply of packaging materials and

technical personnel, telecommunication and transportation facilities and the existence of a high

number of health institutions in the region are the main reasons for the concentration.

The industry has a production structure which has high level of technology and automation.

Approximately 25.000 people are employed in the sector, of which 50% have a university degree

MAIN PHARMACEUTICAL MANUFACTURERS

Nowadays there are approximately 300 entities operating in Turkey; there are 43 manufacturing

facilities and 14 of them are multinational firms. The leading 10 companies account for less than

50% of the market, the first 20 companies account for over 70%. This fragmented structure

coupled with intense competition will necessitate further consolidation in the Turkish market.

The leading Turkish manufacturers are EIS Eczacıbaşı (Zentiva), Abdi İbrahim, Fako (Activis),

Deva (Eastpharma), İlsan İltaş, Mustafa Nevzat, İbrahim Ethem Ulugay and Bilim. The

following international pharmaceutical companies have subsidiary manufacturing operations in

Turkey: Bayer (Germany), GlaxoSmithKline (UK), Pfizer (US), Roche (Switzerland), Sanofi-

Aventis (France), Novartis (Switzerland) and Baxter (US). The market has attracted substantial

interest from international strategic and financial investors in the past three years; the total

number of deals reached 39 in this period. Especially Western Europe continues to be the most

active region in pharmaceutical deals in Turkey. Most of the foreign transactions’ show that

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foreign players prefer to acquire a significant majority (usually over 85% and 100% in most

cases) of the target companies.

IMPORT OF TURKEY PHARMACEUTICALS

The Value of Imported Raw Material and Finished Pharmaceutical Products in Turkey by Years (US

$ in million)

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EXPORT OF PHARMACEUTICALS

The Value of Exported Raw Material and Finished Pharmaceutical Products in Turkey by Years (US

$ in million)

Source

OUTLOOK FOR THE FUTURE OF TURKEY’S PHARMACEUTICAL INDUSTRY

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Turkey’s geographical position plays a central role in its aspirations to become a pharmaceutical

production hub for the region. Its proximity to Europe, CIS and MENA, combined with its

competitive cost structure and developed production capabilities, will support Turkey’s

ambitions described above. Not but least the accession process with EU will improve Turkey’s

institutional and business capabilities.

As of today the industry do export to more than 100 countries including EU member states as

well as the US. This demonstrates Turkey’s developed installed capacity and the fullfilment of

the strictest quality and production standards. In this context, the challenge for Turkey and

ISPAT is to further increase FDI to ensure long term sustainability of national healthcare

provision with new investments to manufacturing of drugs and R&D.

In order to maximize growth and efficiency within the healthcare industry ISPAT work with

relevant bodies such as the Ministry of Health, Scientific and Technological Research Council of

Turkey (TUBITAK), research institutes, and universities as well as private stakeholders

including both international and domestic firms. As a recent example of a joint effort in

promotion of investment opportunities in Turkish pharmaceutical, healthcare and biotechnology

industries, ISPAT has organized Turkey’s participation in the 2012 Bio International

Convention. In addition to the Ministries of Health and Science, Technology and Industry as well

as TUBITAK, industry representatives such as the Association of Research-based

Pharmaceutical Companies (AIFD), the Pharmaceutical Manufacturers Association of Turkey

(IEIS) and several firms were presented with the opportunity to inform international business and

science communities about the potential of Turkey.

Despite certain market access issues in the short run, we would highly recommend it to

international investors to take into account the opportunities in Turkey provided by a growing

market. It is important to make investment decisions by looking at the opportunities within a

longer term perspective taking into account favourable long-term macroeconomic conditions and

prospects for growth due to demographic and welfare dynamics.

Turkey has a favourable long-term macroeconomic outlook, reflected in BMI’s ten-year forecast

which predicts improved access to medical care through the extension of state-funded health

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insurance towards European-style universal coverage. This positive outlook is further enhanced

by various factors, such as increased life expectancy and strong population growth, which

combine to give the market’s long-term promise.

INDIA and Turkey trade relations

Introduction

India and Turkey are both emerging economies who are also developing

economic and strategic interests outside their immediate region.

Ind ia , a l ong t e rm p roponen t o f non alignment and who pushed a foreign

policy based on moral precepts, is moving to a foreign policy more focused on pursuing

tangible interests. Turkey, a NATO member, that for decades saw its future as a European

state embedded in the Western political structure, is now positioning itself as an

important player in West and Central Asia as well.

India has undergone major structural changes to its economies going back to

the mid-1980s that have rolled back regulatory barriers on its private corporate sector and

opened up its economy to foreign capital and investment.

India-Turkey Relations: A Snapshot View

Turkey India

GDP Total USD 1.073 trillion USD 1.9 trillion

GDP /Capita Income USD 9,500 USD 1,340

Population 73.6 million 1.2 billion

Major Trading Partners

EU (46.3%), Iraq (5.3%),

Russia (4.1%), USA (3.4%)

UAE (13.6%), China (12%),

USA (10.1%)

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5.2 BILATERAL TRADE BETWEEN INDIA AND TURKEY

Bilateral Trade

Volume: USD 6.6 billion (Jan-Nov 2011)

India’s exports: petroleum products, clothing and apparel,

aluminum, cars, mobile handsets

Turkey’s exports: marble, textile, machinery, copper ores,

inorganic chemicals, jewelry

Investments

Indian investments in Turkey: railway construction, pipelines,

hydrocarbons, IT services

Turkish investments: tourism, textile products, construction

Recent High level Visits

Prime Minister Erdogan (2008)

President Gül (2010)

Vice President Ansari (2011)

Key Agreements

Bilateral Investment Promotion and Protection Agreement 1998

(BIPA)

Avoidance of Double Taxation and the Prevention of Fiscal

Evasion 1997 (DTAA)

Institutional Arrangements

Joint Commission for Economic and Technical Cooperation

Joint Business Council

Joint Study Group for Free Trade Agreement feasibility

Education and Culture

25 slots offered to Turkish students under Indian Technical and

Economic Cooperation (ITEC)

MOU signed between Ankara University and JNU and Bogazici

University and Shantiniketan

Language professors are on deputation through the Indian

Council for Cultural Relations

Defense

High level visits: Chairman of Chiefs of Staff Committee and Chief of

Army Staff Air Chief Marshall V. P. Naik (2011)

Chief of Naval Staff Admiral Nirmal Verma (2011)

Diaspora

A small group of working professionals are found in each country.

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GROUP:4

An overview of Automobile Industry of Turkey

The automotive industry in Turkey plays a significant role in the manufacturing sector of

the Turkish economy. Companies operating in the Turkish automotive sector are mostly located

at Marmara Region.

Turkey produced up to 1.2 MN motor vehicles annually, ranking as the sixth largest producer in

Europe and the 17th largest producer globally. With a group of car manufacturers and suppliers,

the Turkish automotive sector has become an essential part of the global network of production

bases, exporting over $22,944,000,000 worth of motor vehicles & components.

Turkey is one of the most noticeable export oriented automobile markets in the world. The

country is driven by high production volumes and a very high ratio of exports to production.

Domestic market is categorised by great demand potential, low permeation and inspiring

regulatory strategies. Supported by all these factors, the production growth of automobile

production again improved in 2010 and sales grew faster than the preceding year. It is expected

that the sales of vehicles in terms of volume will increase at a CAGR of around 13.5%

throughout years 2011-2014.

PRODUCTION

In first 8 months of 2012, the total automotive production gathered as 694,357 units, which

represents 11% decrease compared with a year ago. CUR was 66% in 8M12, down from last

year’s 74%. Oyak Renault maintained its superior position in automotive production with

191,079 units, followed by Ford Otosan and Tofaş

2009 2010 2011 2012

Production 869,605 1,094,557 1,189,131 36,812

Retail Sales 575,869 793,172 538,532 60,871

Domestic Factory Sales 255,176 341,636 379,092 14,591

Exports 628,970 754,469 790,966 26,296

CUR 57% 72% 75% 27%

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Major Producers of Automobile Industry

Maruti Udyog Ltd., G.M India, Ford Ind Ltd., Eicher Motors, Bajaj Auto, Daewoo Motors India,

Hero, Hindustan, Hyundai Ind Ltd., Royal Enfield Motors, Telco, TVS Motors, DC Designs etc.

Automotive Manufacturers in Turkey

Indian Producers in Turkey Market

Indian Tractor Industry Leader Tafe Makes a Greenfield Investment in Manisa Industrial Zone

Istanbul on October 13, 2008. An Investment Support & Promotion Agency of Turkey &

India's leading tractor manufacturer Tractors and Farm Equipment Limited (TAFE), today

jointly announced TAFE's decision to invest in a tractor assembly/manufacturing facility at

Manisa Organized Industrial Zone, with plans to manufacture 15,000 tractors/year. While an

investment plans are being confirmed, in order to launch a full range of tractors for the Turkish

market at the earliest, production will start primarily with the support of aggregates from TAFE's

plants in India, while production is expected to start in the 1st quarter of 2012.

TAFE, an Indian JV based at Chennai is the world's 2nd

largest producer of tractors in the

sub 100 horse power series with an annual production & sales of 80,000 units in India, South

Asia, and Africa & North America. With a history of designing, manufacturing & marketing

tractors around 50 yrs. & nearly a MN satisfied tractor clients, TAFE has huge experience in

manufacturing tractors to suit every possible type of agro-climatic condition & operation in the

small and medium horse power range. TAFE is the first Indian manufacturer to set up a

manufacturing base in Turkey. The company has selected to locate its new plant at

Manisa, which in addition to its strategic location & has exceptional infrastructure.

Commenting on the issue, Mallika Srinivasan, TAFE's officials said, the tractor market in

Turkey is of great significance to us as its composition is well within our experience &

manufacturing range. Turkey is an investor friendly country & we have been welcomed

and assisted in our investment proposals by the authorities at the Manisa Organized Industrial

Zone as well as directly by the Prime Minister's office at Ankara. With ISPAT's support, we

are confident in beginning manufacturing operations by the first quarter of 2009. Manisa is

well located in terms of proximity to the well-developed automotive component manufacturing

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base in Turkey & TAFE is expected to leverage this for its local as well as global

requirements. It is noticeable that over 2,000 TAFE tractors are already in operation in Turkey

& negotiations for sales and distribution of tractors from new plant are in progress with a

world leader in agricultural equipment, while final arrangements are expected to be announced

soon.

Main Producers

India-Turkey Relations India’s Exports to Turkey

India’s exports to Turkey include petroleum products, vaccines, cotton yarn, synthetic yarn,

organic dyes, organic chemicals, denim, steel, and granite, antibiotics, carpets, tobacco, cars,

sesame seed, TV CRTs, mobile handsets, clothing & apparel.

Turkey’s exports to India include poppy seeds, auto components, marble, textile machinery,

denim, carpets, cumin seeds, copper ores and concentrates, flat rolled iron and steel & gold.

Turkish Investments in India

Turkey grades 40th overall in terms of FDI Inflows to India with cumulative direct investment

into India amounting to US $ 45 MN accounting for 0.03% of total FDI inflows.

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Indian Investments in Turkey

More than 150 companies with Indian capital have listed businesses in Turkey in the form of

JVs, trade & representative offices. They include M/s Polyplex, GMR Infra, TATA Motors, M &

M, Reliance, Ispat, Aditya Birla Group, Tractors & Farm Equipment Ltd., Jain Irrigation, and

Wipro & Dabur.

VARIOUS INDUSTRY ANALYSIS

SWOT ANALYSIS OF AUTOMOBILE INDUSTRY OF TURKEY

Strengths

Turkey has an advantages of being a production center cheers to both amplitude of

demand in domestic market & also its geographical status & nearness to developing

potential markets. Such advantages become more evident in new centers of automotive

production compared to East-European Countries.

Conventional quality understanding.

Technical qualification.

High quality production compatible to international standards & know-how.

Competence of producing for multi-branded vehicles.

Lesser labor pays than in particular West European Countries.

Adequacy of long working hours.

Ability of fast feedback to development, evolution and demands.

Expertise of crisis management.

Young, trained, dynamic, enthusiastic and skilled labor potential.

Weaknesses

The weak points in competition are comparatively high costs of energy, raw material &

labour.

Weak protection of intellectual property rights.

Due to the absenteeism of the certainty & certainty of the law & transparency catching

investors depends on providing high yield & tax incentives.

Prejudiced application of the law & Poor business ethics.

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Business Opportunities

Bearing in mind developments during the last period, one can suggest that Turkey has

become an authoritative base for automotive main as well as subcontracting sectors.

Turkey has succeeded to be a significant production base in Europe for key

manufacturers especially in commercial vehicle production and vehicles produced in

Turkey are exported at high volumes.

It’s possible to mention a similar successful tendency for automotive delegating

companies. Those companies, which at the very beginning are engaged uniquely in

domestic main contractors, today produces for important manufacturers and after market

throughout Europe. Export figures in sector also support such findings. Merely the above

examples appropriately define present accomplishment of sector.

Threats

One of the major threat for Turkey is increased global competition. Increased exports to European countries from Asian countries due low cost. New auto competitors are also trying to establish themselves in the region.

Competition arises on many fronts within the broader region of Africa and the Middle

East.

Developing auto industries in Egypt, the UAE, and South Africa are likewise trying to

become players in the world car market.

PORTER’S FIVE FORCE ANALYSIS FOR AN AUTO INDUSTRY

Porter's Five Forces, also known as P5F, is a technique of examining the attractiveness of an

industry. It does so by looking at five forces which act on that industry. These forces are bases of

that industry's profitability.

1. The threat of new entrants

In the auto manufacturing industry, there is generally very low threat. Factors to observe for this

threat include all obstacles to entry such as upfront capital requirements, brand equity, regulation

and government policy, ability to distribute the product

As Turkey has an agreement with European Union & permanent member leads to less threat of

new entrants. Another reason for less threat of new entrants is its government policies labor laws

which are in favor of country’s own.

2. The bargaining power of buyers/customers In 2009 especially, Turkey dealers were giving great deals to buyers to get the industry moving.

While quantity a buyer purchases is usually a good factor in defining this force, even in the

automotive industry when buyers only usually purchase one car at a time.

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However, this may be different in other markets. But in Turkey’s competitive countries it sure is

lower than in the Turkey, creating a more satisfactory situation for industry.

Generally, however, it is safe to say that customers have some buying power, but after all it

depends on the market the country is serving for its products of a particular industry to survive in

the competitive world.

3. The threat of substitute products If buyers can look to the competition or other comparable products, and switch easily there may

be a high threat of this force. With new cars, the switching cost is high because you can't sell

brand new car for the same price you paid for it. Porter five force analysis of car industry covers

new market, not used.

But what about the threat of substitute products before the buyer makes the purchase? You need

to know whether the market you are analyzing has many good alternatives to new cars. A vibrant

used car market perhaps? Used cars threaten the new market. Product differentiation is important

too. In Turkey’s car industry, typically there are many cars that are similar - just look at any mid-

range Toyota & you can easily find a very similar Nissan, Honda, or Mazda. However, if you are

looking at amphibious cars, there may be possibility of little threat of substitute products for an

existing one.

4. The amount of bargaining power suppliers have In the car industry this refers to all the suppliers of parts, tires as well as components, electronics

and even the assembly line workers. We know in the Turkey the auto unions are tremendously

powerful. But we also know that some suppliers are small firms who rely on the carmakers, and

may only have one carmaker as a client. So this force can be tricky to evaluate.

5. The intensity of the competitive rivalry We know that in most countries all carmakers are engaged in fierce competition. Tit-for tat price

slashes, ad campaigns, and product developments keep them on the edge of innovation and

profitability. Margins are low & pressure between competitors is high. All major car

manufacturing countries experience this strong rivalry. This includes US, Japan, Italy, France,

UK, Germany, China, India and other more. A P5F analysis should always be done in

conjunction with other assessments, and should not be regarded as being absolute. It should only

serve as an indicator, not absolutely accuracy. There are many critical assumptions that should be

made and explained in one's P5F analysis. The market must be described, the competition must

be explained & defined product. Another example is the type of automotive industry. A P5F

analysis of the electric car industry would be entirely different than one of the conventional car

industry.

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Porter-Diamond Model

Factor Conditions

As Turkey is highly populated country leads to significant amount of human resource as

well as Highly Skilled workers & advanced technological know-how shows high

knowledge resources.

As there are so many world-wide companies have set up their plant & manufacturing

units in Turkey tends to show higher amount of infrastructure facilities.

Turkey invests 1/4th

of its nations income which leads to high amount of capital inflows

from domestic and other capital inflows flow from FIs

Demand Conditions

Higher domestic production and domestic sales data shows higher demand of domestic

market & higher exports almost 70% shows higher demand of global market.

Related & supporting industries

Efficient supplier & dealer network tend to raise I/Ps and higher production leads to low

costs as well as globally increased competition forces to invention.

Firm strategy, structure and rivalry

Turkey’s main strategies for an automobile industry are effective production, lower cost,

higher investment of income and higher exports to European countries leads to more

inflow of money.

Turkey’s Automobile associations predictions for future & set its goals accordingly by

taking global economic scenario in to consideration.

As well as highly planned & intensive goal & investments keep managing liquidity and

other aspects.

Government

Turkey’s government policies play key role in the development of its domestic market &

stopping it from competitors entrants by putting high taxes & incentives, complex, long

& favorable legal system for its own as well favorable labor legislations and laws for

employees.

As well as urban trade relations with European countries & become member of European

Union leads to increase its exports to Europe.

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Chance

This factor affects Turkey’s automobile industry lesser due to highly regulate &

controlled markets and its regulations

BEFORE INVESTING IN TURKEY

Business Environment

Due to the absences of the certainty and predictability of the law &

transparency catching investors depends on providing high yield & tax

incentives.

Selective application of the law. Deprived business ethics. The concept of a

written "contract" is not mainstreamed. Turkey will always have great potential.

I wonder if they will ever reach that potential.

The fact that intellectual property isn’t adopted prevents every kind of

intellectual capital investment

Macro economics Taxes are very high. Public entities with strong macroeconomic function

such as sgk and teias delaying payments. Continuing populist

applications at municipal levels drawing on resources.

Trade deficit is unsustainable .linkages to neighboring emerging markets

will bring the biggest gains.

Determined and disciplined application of fiscal policy in coordination with the

monetary policy will pay off in the longer term. It seems that the fiscal side

is quite weak and is lacking an anchor.

Still risks to inflation/interest rates from government spending policies and lack

of IMF program.

Taxation

Tax system: there are hidden taxes. There is always an additional fee etc. which

increases overall tax burden & complicates the business transactions. For example,

stamp tax levied on business contracts.

International investors and corporations are punished by higher rates of tax that are not

viable with lower tax countries like Singapore or Ireland. The reduction in corporate

taxation was a good start but an organized, corporate sector is subsidizing the informal

sector efforts to address tax evasion in the informal sector is welcomed, but we

should also be asking if taxing production, capital and investment is better than taxing

consumption, in terms of encouraging economic growth

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Turkey is an underdeveloped country & do not have a structure which can bear

heavy taxes. Since taxes are not collected from the revenues generally,

consumption taxes are very high. Besides, institutions who pays the taxes via

revenues and people pay taxes 2t

Legal System

It is better to settle down differences outside of the courts if possible. Courts

are too slow to react.in the matters of technical issues, the courts are

ineffectual. Certain courts are unfair in their decisions.

Principles of trademark protection has to be strengthen & delays in the

juridical processes & discr iminat ion of local vs. Foreign in minds are

important problems as well as Implementations about the copyrights and patents

should be elaborated in an international level.

Reasons to Invest in Turkey SUCCESSFUL ECONOMY

Flourishing economy

Sustainable economic growth.

Favourable economy with an optimistic future as it is projected to be the fastest growing

economy among the OECD members during 2011-2017 with an annual avg real GDP

growth rate of 6.7 percent.

16th largest economy in the world & 6th largest economy compared to the European

Union area.

Established economy fuelled by over USD 83 BN FDI in the last 7 years

& ranked as the fifteenth most attractive FDI destination.

POPULATION

A population of 73 MN people.

Largest young population compared with the European Union,

Median age is of 28.8 years.

60 % of the population is under the age of 35.

Young, dynamic, well-educated and multi-cultural population,

QUALIFIED LABOR FORCE

Over 24.7 MN young, well-educated & motivated professionals, 5th largest labour force

compared with the European Union, Consumer base & motivated work force, Project

International Marketing Automotive Industry and approx. 450,000 graduates from circa

150 universities.

Around 550,000 high school graduates, including one third from vocational and technical

high schools.

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LIBERAL AND REFORMIST INVESTMENT ENVIRONMENT

A vibrant and established private sector with $ 102 billion worth of exports & an increase

of 183 % between 2002 and 2009.

Highly modest investment conditions, Strong industrial and service culture equal conduct

for all investors & More than 23,000 companies with international capital.

INFRASTRUCTURE

New & highly settled technological infrastructure in transportation,

telecommunications and energy, well-developed and low-cost sea transport facilities &

railway transport advantage to Central and Eastern Europe.

CENTRALLY LOCATED

A natural connection between both East-West and North-South axes, thus creating an

efficient and cost effective outlet to major markets.

Easy access to 1.5 BN customers in Europe, Eurasia, the Middle East and North Africa.

ENERGY CORRIDOR AND TERMINAL OF EUROPE

Domineering energy terminal and corridor in Europe connecting the East & West.

As an energy transit country, Turkey presently has the capacity to transport 121 MN tons

of oil to the world markets per annum. Once the continuing projects are completed, the

annual transit capacity will rise to 221 MN tons of oil and 43 BN m³ of natural gas.

LOW TAXES & INCENTIVES

Corporate IT reduced from 30 to 20%.

Individual Income Tax fluctuates from 15 to 35 %.

Tax benefits and incentives in Tech Development Zones, Industrial Zones and Free

Zones could include total or partial exemption from Corp IT, up to 80 % grant on

employer’s social security share, as well as land allocation.

New R&D and Innovation Support Law.

Region and sector based incentive system.

CUSTOMS UNION WITH THE EUROPEAN UNION SINCE 1996

Customs Union with the European Union since 1996, and Free Trade Agreements with

16 countries.

More FTAs underway.

Accession negotiations with the European Union since so many years.

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GROUP :5

MINING INDUSTRY

INTRODUCTION OF MINNER INDUSTRY

At first, Istanbul seems to have changed very little since the time of Ara Güler’s black and white

photographs. Its streets are still crammed full and confused, and its wooden houses as neglected as the

camera of Güler, “the eye of Istanbul,” captured them 50 years ago. Despite the appearance, however,

things have changed dramatically. Istanbul has become a 17 million people megalopolis with a brandnew

metro system, two bridges stretching between Europe and Asia, a vibrant service sector, real estate

developments springing up on every available piece of land, shopping boulevards packed with the

glittering windows of international boutiques and 35 billionaires living in its yalis (waterfront villas)

along the Bosphorus. Over the last 20 years, meanwhile, Turkish cities such as Balıkesir, Bursa, Denizli,

Gaziantep, Kahramanmaraş, Kayseri and Konya have become important business and industrial centers.

Ankara is no more the provincial town that was despised by international diplomats in the 1920s,

but a dynamic political capital with a population of 4 million. Since Turgut Özal opened up the country to

private and international investment in the 1980s, Turkey has been growing at impressive rates. Neither

the domestic financial crisis of 2001, nor the more recent global financial crisis managed to invert this

trend, even if they did take some toll. The country ranks 17th in the world in terms of nominal GDP and

Prime Minister Tayyip Erdoğan has vowed to make it one of the 10 biggest economies by 2023, the 100th

anniversary of the Turkish republic. Turkey’s mining industry has gone through the same dramatic

changes. Only 15 years ago, 85% of the mining operations were controlled by the state; today the ratio is

reversed.

In gold mining alone, three new mines have opened in the last couple of years and several

projects are due to be fully developed in the coming years. International investors showed their interest in

the recent developments in Turkey’s gold mining by subscribing 40% of the initial public offering (IPO)

of Koza Gold, the sole local gold producer on the Istanbul Stock Exchange. Overall, investors laid down a

total of $436 million to subscribe 30% of Koza’s capital, giving the company, which at the time was

producing around 230,000 oz/y of gold with further resources for 8.1 million oz, a market value of $1.45

billion. Meanwhile, the Turkish government paved the way for new investments by amending the mining

code in 2010.

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Turkish mining sector achieved a remarkable CAGR of 32.1 percent between 2002 and

2008, with revenues that rose from USD 1.9 billion in 2002 to USD 10.2 billion in 2008. There

was a modest decline to USD 9.2 billion in 2009. The sector’s share in Turkey’s GDP ranged

between 1 and 1.5 percent, reaching a 4.2 – 4.9 percent1 share in the total industry during the

past five years. These figures are low compared with the sector’s importance; however, with the

recovering economy and the increasing capacity of the manufacturing industry, together with the

implementation of advanced mining technologies, the sector is likely to grow further.

Turkey holds 2.5 percent of the global industrial minerals reserves, 72 percent of global

boron reserves, 33 percent of global marble reserves, 20 percent of global bentonite reserves and

more than half of the global pearlite reserves. Boron is the richest reserve found in Turkey: the

866 million tons of reserves of B2O3 comprise approximately 72 percent of the total global

reserves of 1,201 million tons in 2009. Apart from Turkey, boron reserves are mainly found in

Russia and the US. Eti Maden supplied 37 percent of global boron demand in 2009, followed by

RT Borax with 35 percent.3 Boron reserves in Turkey are mainly found near Eskisehir, Balikesir

and Kutahya1, all in Western Anatolia.

As part of the EU membership accession negotiations, the government started intense

studies for liberalization and privatization in several industries, mining being one of them. With

the regulatory changes, incentives offered, and reduced bureaucratic processes for obtaining

mining licenses, both local and foreign investments have increased each passing year, reaching

TRY 2.78 billion in 2008, and are expected to continue growing in the coming years.

Major Mining Commodities

Natural Stones

Boron Minerals

Chromium – Ferrochrome

Feldspar

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Pumice

Iron ore

Gold

Coal

Lignite

Boron

Aluminum

Copper

MINING INDUSTRY IN TURKEY

PRODUCTION

The minerals sector is one of the leading sectors supplying raw materials to domestic industry.

Turkey possesses the largest resources of most minerals in the world and is one of the world’s

richest countries in terms of minerals. Excluding petroleum and coal, there are 53 exploitable

minerals and metals and 4,500 mineral deposits in Turkey. Turkey’s geology is extremely

complex and this complexity is reflected in the diversity of its mineral deposits. Best known for

its industrial minerals, Turkey is a major producer of boron minerals, feldspar, marble, baryte,

celestite (strontium), emery, limestone,magnesite, perlite and pumice.In recent years, mining

activities and the search and production of mainly silver, gold, manganese, copper and chrome

ore have increased considerably in Turkey as in the rest of the worldChromite:.Turkey has a 6%

share in world chromite mining and possesses 25 million tons of reserves. Ferrochromium is the

most important product in production and exports. The majority of Turkey’s chromite production

has been utilized by the ferrochromium industry.

In 2007, Turkey ranked 3rd in chromite exports in the world with a share of 12.8%. Themost

important chromite reserves are located in the Guleman district of Elazig, the Kopdag district of

Erzincan, the Fethiye district of Koycegiz, Mugla, Eskisehir, and the Pozanti district of Adana,

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Harmancik, the Orhaneli district of Bursa and the Pinarbaşı district of Kayseri.Turkey’s total

export of chromite was US$465,3 million with a 3,4% decrease in 2011.Major markets were

China (%82), Russia (%5), Sweden (%2) and India (%2). The most important ferrochromium

markets for Turkey were the Netherlands, Italy and Belgium.

Copper:

The recognized copper reserves of Turkey are about 3.7 million tons of metal copper;

nevertheless, total reserves amount to 15.8 million tons. Turkey has three important copper

reserves: the East Black Sea, Southeast Anatolia and Thrace. Rods, profiles and cables are the

most important export products in the sector. Turkey’s copper ore exports were US$ 364,8

million in 2011. The main buyers were China, India, Sweden and Finland.

Zinc and Lead:

Turkey’s zinc reserves are about 2.7 million tons. Although Turkey has 2.07 % of world zinc

reserves, ore production accounts for only 0.28% of world production. Zinc oxide ore reserves

are located in the Zamanti (Kayseri/Nigde/Adana) district of Middle Taurus. In addition, some

small reserves are found in Konya, Malatya, Bingol and Bitlis.

Turkey annually produces about 40 thousand tons of zinc metal. Half of the production is

consumed in the domestic market and the rest is exported. Exports have increased in parallel

with the increase in production. In 2011, approximately US$ 202,8 million worth of zinc ore and

concentrate was exported mainly to Belgium, China and Bulgaria.

Feldspar:

Turkey possesses 10% of total world feldspar reserves. Turkey’s feldspar reserves are estimated

to be 239 million tons (visible+potential). Important feldspar reserves are located in

Manisa/Demirci, Kutahya/Simav, Aydın/Cine and Mugla/Milas. The rise in world production of

white body tile and granite tile has increased the demand for feldspar.

Turkish producers are now competing in the domestic and international markets to supply

this material. Most of the feldspar is produced by the private sector and 90% of the production is

exported. Feldspar exports started in 1990 and it reached US$ 130,8 million in 2011. Italy, Spain,

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Russia and Poland were the most important markets for Turkish feldspar. In 2011, Turkey ranked

first in feldspar exports in the world with a share of 32%.

Magnesite:

Turkey’s magnesite reserves are about 168.4 million tons. Most of these reserves are

concentrated in the Konya-Kutahya-Eskisehir triangle. In addition, some reserves are located in

Erzincan and Canakkale. Raw magnesite, dead burned and caustic calcined magnesite are

produced in Turkey. Several small companies also produce raw magnesite.

Magnesite is exported as raw magnesite, calcined, sintered and burned. Magnesite is also

exported as bricks that are used in the iron and steel industry. In 2011, magnesite exports were

about US$ 90 million, and Austria, Ireland and Germany were the major markets for Turkish

magnesite. In 2011, Turkey ranked second in magnesite exports in the world with a share of

32%.

Bentonite and Kaolin:

Turkey’s bentonite reserves are 370 million tons. The production of ground bentonite has been

rising steadily during the last 20 years. At present, Turkey is a net exporter of bentonite. Known

bentonite deposits are found in Edirne-Enez, Çankırı, Tokat-Resadiye, Ankara-Kalecik and

Giresun-Tirebolu. Bentonite production and exports have increased in the 1990’s and reached

US$39,2 million with a 21% increase in 2011.

Bentonite exports were mainly directed to Germany, the Netherlands, Italy and France.Known

kaolin reserves are found in some villages of Balıkesir, Nevsehir, Nigde, Bolu, Canakkale, and in

the East Black Sea region. Turkey’s probable kaolin reserves are about 100 million tons. In 2011,

the total export value of kaolin was US$2,9 million. Tunisia, Lebanon, Italy, England and Syria

ranked as top markets for Turkish exports in 2011.

Baryte:

Turkey possesses 26 million tons of baryte which is about 2.1 % of the total world reserves.

These reserves are composed of good quality baryte for all types including ground, crude or

micronized.

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The largest share of Turkish baryte production is sold to oil drillers. Important barite deposits are

located in Konya, Maras, Muş, Antalya and Kutahya. Being located near the most important

consumers of barytes, Turkey has advantage in exporting baryte products.

The total export value of baryte was US$17,1 million in 2011 and the major markets for Turkish

barytes were Iraq, Ukraine and Finland.

Other Important Minerals and Their Exports:

Turkey has a wealth of industrial minerals. The other important commercially produced minerals

are plaster, sepiolite, diatomite, zeolite, sulphur, lead, silver, antimony, alumina ore, gypsum,

phosphate, salt, sodium, sulphate, quartz, industrial sand, dolomite, talc, wollastonite, kyanite,

calcite, emery rock and calcium fluorite .

Turkish mining exports reached US$2 billion in 2011. Turkey’s mineral exports have a share of

1.56% in Turkey’s total exports in 2011. Chrome, copper , natural borates and zinc are the major

metallic minerals which are exported. Natural stones, borates, feldspar, magnesite, pumice stone,

baryte, kaolin, clays and calcite are the most important industrial minerals. In 2011, China and

the European Union were the main

markets in Turkey’s mineral exports.

INDIA-TURKEY ECONOMIC AND COMMERCIAL RELATIONS

During the Turkish War of Independence, the people of India contributed funds for the Turkish

cause – which was partly used to train and assist the Turkish Army and partly for establishing the

first Turkish bank (Isbank). Diplomatic relations between India and Turkey were established in

1948.

Political Relations: Bilateral relations are characterized by warmth and cordiality. The two

countries share common values including commitment to secularism and democratic principles.

Indian economic progress and technological advancement have been instrumental in recent

upsurge in interest towards India in Turkey.

The major items of India’s exports to Turkey include cotton yarn, synthetic yarn, organic dyes,

organic chemicals, denim, steel (bars and rods), granite, antibiotics, carpets, unwrought zinc,

sesame seed, TV CRTs, mobile handsets, clothing and apparel.

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Turkey’s exports to India includes poppy seed, auto components, marble, textile machinery,

denim, carpets, cumin seeds, minerals (vermiculite, perlite and chlorites) and fittings and steel

products.

Introduction

1. India and Turkey are both emerging economies who are also developing

economic and strategic interests outside their immediate region.

2. Ind ia , a l ong t e rm p roponen t o f non alignment and who pushed a foreign

policy based on moral precepts, is moving to a foreign policy more focused on pursuing

tangible interests. Turkey, a NATO member, that for decades saw its future as a European

state embedded in the Western political structure, is now positioning itself as an

important player in West and Central Asia as well.

3. India has undergone major structural changes to its economies going back to the

mid-1980s that have rolled back regulatory barriers on its private corporate sector and opened

up its economy to foreign capital and investment.

India-Turkey Relation

(Joint Declaration on Scientific and Technological Cooperation)

India and Turkey on February 9, 2010 desired to develop and expand cooperation in science and

technology and in other areas of common interest and launched an Advanced Science and

Technology Dialogue, besides offering to actively study the possibilities of working together in

mutually identified projects in areas such as telecommunications, computerization, non-

technology space research, bio-technology and environmental technology and convene a joint

workshop in 2010.

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Considering the importance of science and technology for the economic and social development

of both the countries have desired to develop and expand cooperation in the field of science and

technology in areas of common interest besides noting that together with economic and

commercial relations, cooperation in science and technology offer great potential as a driver of

bilateral relations.

The joint statement has recognized that cooperation in science and technology will not only

advance the state of science and technology to the benefit of both countries but also strengthen

the bonds of friendship and understanding between people of both countries.

The statement also reaffirmed the Agreement on Cooperation in the field of Science and

Technology between the Government of the Republic of Turkey and the Government of the

Republic of India signed on 17 September 2003,

Advanced Science and Technology Dialogue will also encourage cooperation through exchange

of ideas, information, skills and technologies; exchange of scientists and technical experts; the

convening of joint seminars, scientific conferences, and meetings; training and enhancing the

skills of scientists and technical experts; the conduct of joint research projects and studies and

other forms of scientific and technological cooperation as may be mutually agreed upon, India

and Turkey will actively study the possibilities of working together in mutually identified

projects in areas such as telecommunication, computerization, information technology, space

research, biotechnology and environmental technology.

Both sides will actively explore the possibilities for joint research and development activities

making use of best practices in this field and encourage, facilitate and support the development

of direct contacts and cooperation between government agencies and organizations, universities,

science and research centers, institutes and institutions, private sector firms and other entities of

the two countries.

The joint statement stated “We also agree, therefore, that Turkey and India convene a joint

workshop in 2010 among designated representatives to elaborate and bring into being the

Advanced Scie

nce and Technology Dialogue in accordance with this Joint Declaration.”

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IMPORT EXPORT OF MINNING INDUSTRY IN TURKEY

GENERAL

ICD Research's "Mining in Turkey to 2015 - Market Sizing and Forecasts: Market Profile" is an

essential source of information covering the industry dynamics of the mining industry in Turkey.

The report offers insights into market opportunities and entry strategies adopted to gain market

share in the Turkish mining industry. In particular, it offers in-depth analysis of the following:

Market opportunity and attractiveness: Detailed analysis of current market size and

growth expectations during 2011–15. It highlights key drivers to help understand growth

dynamics. It also benchmarks the sector against key global markets and provides detailed

understanding of emerging opportunities in specific areas.

Procurement dynamics: Trend analysis of exports and imports, along with their

implications and impact on the Turkish mining industry.

Market entry strategy: Analysis of possible ways to enter the market along with an

understanding of how existing operators have achieved this, including key contracts,

alliances, and strategic initiatives.

Business environment and country risk: a range of drivers at country level, assessing

business environment and country risk. It covers historical and forecast values for a range

of indicators, evaluating business confidence, economic performance, infrastructure

quality and availability, labor force, demographics, and political and social risk.

Scope

Analysis of Mining industry production from 2004 through 2009 and forecasts till 2015

Analysis of market size and production trend analysis by coal, metallic and non-metallic

segments

o Mining Equipment market size and forecast

o End use market dynamics

o Benchmarking with key global markets

o Market opportunities

o Mining import and export dynamics

o Market entry strategy

o Business environment and country risk

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Investments in Turkey

Turkey is an attractive country for foreign investors with a business-friendly regulatory

environment. It has a large dynamic market with a relatively high quality labour force and

location advantage, with easy access to regional markets. It is a member of EU Customs

Union, providing access to the large European market. The net foreign direct investment in

Turkey was $ 10.03 billion in 2005, 19.92 billion in 2006 and 21.97 billion in 2007. The main

beneficiaries of FDI have been hotels, tourism and leisure, textile and auto component sectors

and the main sources of investment are USA, UK and Germany.

Indian companies in Turkey

More than 60 Indian companies have registered businesses in Turkey in the form of joint

ventures, trade and representative offices.

IRCON undertook railway projects in nineties. Kalpataru, in association with Barmek, a Turkish

company undertook electricity transmission projects in Turkey in 2003.

An Indian company Polyplex set up a polyplex film manufacturing factory in Chorlu, Turkey in

2005 with a total capital investment of US $ 60 million.

Indo-Rama Group started a production unit for polyester fibre. TATA Motors have an existing

tie-up with Mesin Limited of Isotlar Group for marketing and after sale service for TATA

vehicles in Turkey.

Limak Constructions, a consortium of GMR Infrastructure Ltd and Malaysia Airport Holding

won a BOT contract of Euro 1.932 bn for building a new international passenger terminal at the

Sabiha Gokcen Airport in Istanbul.

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Industrial houses such as Reliance, Ispat, Aditya Birla Group etc have established their trading

offices in Turkey to look for opportunities in the market here.

The Indian Oil Corporation Limited (IOCL), in collaboration with Çalik Enerji of Turkey, was

granted license for establishing an oil refinery with a capacity of 15 million tons a year in

Ceyhan, envisaging a total investment of approx. US$ 5 billion. The project would primarily

focus on exports to the European markets and the USA

India and Turkey, two countries with emerging markets are on the way to developing their

mutual trade to a much better level.

In this respect some Indian groups have acquired companies in Turkey, recently and are

seriously planning to enlarge their businesses in this country.

Turkish company called STANDART PROFIL was acquired by RUIA Group of India in May.

It is reported that this group has also interest ,n Turkish mining, energy and metals sectors and

plans to acquire more companies.

Vandanaa, an Indian energy group,on the other hand has recently acquired Ser Mining, (Turkish

mining firm).

Then again, India’s Oil and Natural Gas Corp. (ONGC) is interested in investing in oil

exploration in the country of Turkey.

It has also been reported that negotiations between India and Turkey to establish a free trade

agreement are ongoing. Many experts believe that this cooperation would definitely be to the

benefit of both countries and Turkey especially would add to its enormous potential having

India’s support. August 2011

With the objective of rediscovering historic linkages between Turkey and India, a joint

Symposium on Indo-Turkish Relations from Ancient to Modern Times was held in Ankara in

October 2002 under the auspices of Turkish Culture Ministry and Indian Council of Historical

Research. On 27 June 2007, a symposium on “Turkish-Indian Relations in History” jointly

organized by Turkish Historical Society (TTK) and the Indian Council of Historical Research

(ICHR) was held in Ankara.

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GROUP:6

AGRICULTURE IN TURKEY

Turkey is the world’s 7th largest agricultural producer and one of the biggest producers of large

range of agricultural commodities, such as hazelnuts, apricots, lentils, cherries, figs, olives,

tobacco and tea. About one third of Turkey’s total land area is devoted to agriculture. There are

approximately 3 million agricultural farms in Turkey most of which are family farms employing

family labour, nearly two thirds of Turkish farms are less than 5 hectares. Subsistence and semi-

subsistence farming is an important characteristic of Turkish agriculture. Although the share of

agriculture in the economy has declined significantly, it is still important in both social and

economic terms. In 2011 it represented 7.9 percent of GDP, 25.5 percent of employment. The most of the problems in Turkish agriculture are market related and to result from small size

and lack of strong and well functioning farmer organisations and need for proper measurement

to support them for their integration, beside the threats such as natural disasters affects to

agriculture, instability in feed prices and pressure on the state to reduce agricultural subsidies.

Turkey has been trying to overcome those challenges through implementing different support

schemes for small farmers at the policy level and should also implement more measures that

support research and development, skills training and help to improve productivity.

Agriculture plays an important role in Turkey, both in social and economic terms, even though

its share in the economy has decreased significantly during the last few decades in line with the

global trend, declining in importance relative to the rapidly growing industry and services

sectors. This reflects the sector’s inadequate productivity levels, which are largely the result of

poor mechanisation, small farm size, and uncoordinated and unplanned agricultural production.

The agricultural sector made up about 22 percent of GDP at the beginning of the 1980 and it has

declined to around 10 percent in recent years. Annual growth rate in agricultural sector was 3.6

percent in 2009, 2.4 percent in 2010 and 5.3 percent in 2011.

Agriculture is still an important buffer against urban unemployment. Nearly 30 percent of the

economically active population lives in rural areas, while agricultural employment accounted for

26 percent in 2007, 24.6 percent in 2009 and 24.0 percent of employment in 2010 according to

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the participation in the workforce. Agriculture is the largest employer in Turkey, representing 25

percent of the workforce and contributes 8 percent of the country’s economic activity.

It is noticed that real production growth in agricultural sector remained quite lower than the

growth rates of GDP, industry and service sectors other than the crisis periods. Whereas the

agricultural sector has grown up at an annual average rate of 1.8% in 5 years duration in 2000-

2004 and 1.9% in 2005-2009, GDP has grown up at an annual average rate of 4.4% in the first

period and 3.2% in the second period. As for the industry, it has grown up at an annual average

rate of 4.2% in the first period and 3.2% in the second period. Even though the decrease of share

of agriculture in total GDP is often encountered during the development of the countries in the

long term, it would not be incorrect that the slight growth of the agricultural production in real

terms constitutes a problem for the agricultural sector itself. One of the reasons is that the

productivity in agriculture is considered quite lower as to be mentioned in the following sections.

About 4 percent of import and 7-9 percent of export come from agricultural products according

to the Standards of International Trade Classification (SITC, Rev.3) while it has about 10 percent

of share in both import and export according to the International Standards of Industry

Classification (ISIC Rev.3). Changes in consumption patterns, increases in education and income

levels have grown the agricultural import and Turkey is recently becoming an agricultural

importer from an agricultural exporter. The most important agricultural products Turkey needs to

import are wheat, rice, oil seeds, cotton and livestock while hazelnuts, dried figs, Sultana,

pistachio, dried apricot, tobacco, olive oil, cotton, legume and fresh F&V are exported.

Economic importance of agriculture in Turkey (2011)

Indicators Value Total area ( ha) 78,356,200

Total agriculture area (ha) 39,032,000

Proportion of total area (%) 49.81

Total arable land (ha) 21,375,000

Total sown area (ha) 17,657,000

Proportion of arable land (%) 54.76 Employment in agriculture (number of labour) 6,143,000 Share of agricultural labour in total labour (%) 25.50

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Share of GDP (%) 7.90 Source: Turkish Statistical Institute (TUIK), 2012.

AGRICULTURE SECTOR

Agriculture has invariably been one in all the foremost capable sectors for Turkey, each for the

domestic economy and in terms of international trade.

Around 40.5 % of Turkey’s acreage is cultivable and offers an outsized vary of product like

grains, oil seeds, pulses, fruits and vegetables, poultry, dairy farm product, cut flowers, seafood,

and tobacco. Grain production, placental mammal and fisheries/forestry account for sixty seven

%, twenty six % and seven % of the entire agricultural production, severally.

Turkey’s agricultural imports in 2010 and 2011, excluding processed food, reached USD half

dozen.495 billion (3.49% of the entire imports) and USD eight.945 (3.7% of the entire imports),

severally. Export were USD five.091 billion (4% of total exports) in 2010 and USD five.350

(3.9% of total exports) in 2011. The highest Turkish exports area unit dried apricots, dried figs,

sultana raisins, hazelnuts and hazelnut product. Turkey’s high imports area unit cotton hides and

skins, soybeans, feed ingredients, paddy rice and live animals.

SHARE OF AGRICULTURE IN PRODUCTION: RECENT UPDATES AND TRENDS

Share of agricultural sector, which constitutes approximately 25% of the Turkey’s employment,

in nominal Gross Domestic Product (GDP) being around 8% in 2009, remains quite lower than

the employment rate.1 Under the light of the recent GDP Data, it is noticed that the share of

agricultural sector in total production did not rise up other than crisis periods and unlike that it

fell down.2 Sharp falls particularly encountered in industrial sectors during crisis result in

temporary increase of the share of agriculture in total production. The share of agriculture, being

12.5% in nominal GDP, recessed to 9.5% in 2004 and 8.2% in 2009. Rapid growth rates of the

service sector and rapid increase in price deflectors in recent years have become important

developments limiting the share of agriculture in total production.

It is noticed that real production growth in agricultural sector remained quite lower than the

growth rates of GDP, industry and service sectors other than the crisis periods. Whereas the

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agricultural sector has grown up at an annual average rate of 1.8% in 5 years duration in 2000-

2004 and 1.9% in 2005-2009, GDP has grown up at an annual average rate of 4.4% in the first

period and 3.2% in the second period. As for the industry, it has grown up at an annual average

rate of 4.2% in the first period and 3.2% in the second period. Even though the decrease of share

of agriculture in total GDP is often encountered during the development of the countries in the

long term, it would not be incorrect that the slight growth of the agricultural production in real

terms constitutes a problem for the agricultural sector itself. One of the reasons is that the

productivity in agriculture is considered quite lower as to be mentioned in the following sections.

Nevertheless, the other reasons may include inadequacy of agricultural support program, failure

in adaptation to the changing global circumstances and quite lower investments in the

agriculture.

PRODUCTIVITY IN AGRICULTURE Structural problems of Turkey’s agriculture result in lower rates of productivity in agriculture.

Upon consideration that the productivity is the production per capita working in the relevant

sector, it is reported that the agricultural sector is relatively larger given either total economy or

the industry and services. It is reported that a person working in the agricultural sector in 2009

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generated TRL 1,860 (in 1998 prices) and this figure is TRL 4,563 for GDP and TRL 6,133 for

industry.

LABOR FORCE AND LAND USED FOR AGRICULTURE

Turkey’s economy uses an important source in terms of labor force in agriculture. With 5.254

million persons, the agricultural sector covers 24.7% of the total employment as of 2009.

Regular decrease in the employees of the agricultural sector as of 1923 is directly related to the

increasing mechanization in the sector and decreasing average land sizes. However, in Turkey,

there are other reasons for migration from rural areas to the urban, one of the most important

pushing factors of the social demography. Comparisons made with the western countries put

forth that Turkey has still a crowded population in the rural areas and the migrations to urban

would continue in the following years. Even if the rural population is held down by social

measures, the dynamics of the growth would progress towards the cities. In this perspective, it

would be correct that the one of the most important problems in our economy is on-site

employment of the rural population efficiently.

Even if Turkey is a rich country in respect of agricultural areas, the constitution of the majority

of the lands from small sections in terms of property ownership makes it difficult to benefit from

the economy of scale particularly in annual arable crops and livestock. In Turkey, there is

cultivated agricultural land (including long life crops such as fruit trees) of 24.5 million hectares

as of 20084. 21.5 million hectares of these cultivated lands consist of the agricultural lands

where grains, vegetables are cultivated excluding long-life crops.

FOOD BUYING BEHAVIOUR

The Turkish food sector is taking additional advanced thanks to merchandiser demands for

higher standards and investments by food manufactures. Through the widespread presence of

contemporary international and domestic grocery stores like railway line, Tesco, crossroad and

Migros further as rising incomes, the consumption patterns of Turkish shoppers have shifted

faraway from mass and raw foods towards packaged and processed foods, together with ready-

to-eat meals and cold foods. Associate raise within the quantity of females operating full-time

and better levels of throwaway financial gain has supported this trend. This can be

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preponderantly the case in urban centres. The foremost vital food consumption patterns haven't

modified the maximum amount within the rural area unites and are still supported wheat and

grain product and a spread of meat product. Shoppers within the south east of Turkey principally

consume lamb, however in Central peninsula and also the West additional shoppers like beef.

Milk consumption has not enhanced as quickly as milk production, that enhanced from eight

million MT in 2003 to 12.5 million MT in 2011, however the variability of milk product like

food and cheese enhanced. There are a unit still a bundle of opportunities for nest egg within the

dairy farm product sector however product ought to be adjusted to native tastes.

Turkey ought to be thought-about an entrance to geographical area market. Thanks to united

history and faith further as general cultures, Turkish agriculture and food export to the centre

east bigger than before perceptibly within the past decade. The Halal and organic food

subsectors area unit areas that may well be prepared for investments or partnerships within the

region.Manufacture within the food and drinkable sector reached 8,852 million in 2009, which

constitutes 18-20.5% of the country’s production as a whole.

The Turkish diet contains a large share of food. Hence, the workplace subsector forms the bulk

(65%) of the entire variety of food and drinkable firms in Turkey. In 2011 Turkey consumed

11,486,000 MT of bread and solely 33,600 MT of packaged bread. Turkish shoppers tend obtain

to shop for} bread from little bakeries once it's hot and customarily don’t buy packaged sliced

bread. Another essential workplace product is that the Simit (type of bagel) further as salty

cookie-like product. Fashionable workplace outlets have begun to unharnessed, particularly in

city, however that's not widespread throughout Turkey. Moreover, thanks to the chunky quality

of flour out there in Turkey, pocket bread vogue bread is in style in East and South East

peninsula. Therefore, the workplace sector normally offers lots of opportunities for enlargement

and spreading out.

AGRICULTURE RESOURCES

Turkey has a vast agricultural resource base with significant potential to expand output,

particularly through increased crop yields. About one third of Turkey’s total land area is devoted

to agriculture.

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Turkey has average annual renewable water potential of 205 Gm, or about 3150 m /person per

year, which is far below the 10,000 m parameter needed to classify a country as water rich.

Taking into consideration the economically usable water potential of the country (110 Gm), the

available annual per capita water goes down to about 1700 m3, which would make Turkey a

water-stressed country. Furthermore, rapid population growth, industrialization, and rising

standards of living are decreasing the annual per capita renewable water potential year by year.

LABOR FORCE FOR AGRICULTURE

Turkey’s economy uses an important source in terms of labor force in agriculture. With 5.254

million persons, the agricultural sector covers 24.7% of the total employment as of 2009.

Regular decrease in the employees of the agricultural sector as of 1923 is directly related to the

increasing mechanization in the sector and decreasing average land sizes. However, in Turkey,

there are other reasons for migration from rural areas to the urban, one of the most important

pushing factors of the social demography. Comparisons made with the western countries put

forth that Turkey has still a crowded population in the rural areas and the migrations to urban

would continue in the following years. Even if the rural population is held down by social

measures, the dynamics of the growth would progress towards the cities. In this perspective, it

would be correct that the one of the most important problems in our economy is on-site

employment of the rural population efficiently. However, the combined series which we formed

by using the new and former employment series published by the Turkish Statistics Institute

(“TUİK”) indicates a significant fall in the agricultural employment after 2001. As for 2008-

2009, being the crisis years, it was noticed that the agricultural employment increased.

DISTRIBUTION OF LANDS

One of the most important problems encountered in transition from extensive agriculture in

vegetable production to intensive agriculture by which highly efficient production is made as a

result of use of intensive technology and input is fragmentary and piecemeal nature of the land

ownerships.

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According to the legal status in Turkey, 3,076,650 farms hold total area of 184.3 million decares.

Average land size for these farms is 59.9 decares; this size is quite lower than the average farm

size of Europe and USA, being successively 174 and 180 decares. Besides, whereas the number

of the farms holding lands of below 100 decares constitutes 83.7% of total number of farms, the

share of the lands held by these farms is 42%. While the share of number of farms holding lands

larger than 500 decares in total number of farms is 0.7%, these farms farm hold 11.3% of the

total area.

Legal arrangements have been maintained since the date of establishment of the Republic of

Turkey to overcome such hindrance to the productivity in agriculture. In this road, Land Reform

Acts were enforced several times; however, these could not help optimized the status of the

landless villagers. Upon enforcement of the draft law, evaluated at the Prime Ministry during

preparation of our report and aiming at preventing the land division for heritage, it becomes

possible that the average size of farm increase. Another development in this respect is the

commencement of preparations for a new structuring under the title of “Agricultural Land

Acquisition Office” of the Ministry of Agriculture and Rural Affairs. This study aims at

gathering the agricultural lands by acquisition, sale and lease of the agricultural lands by the way

of tender

USE OF TECHNOLOGY, MECHANIZATION AND INFORMATION

Outdated technology is used in majority of the farms in Turkey. Although use of technologies

and know-how increases in number in the farms, that the average size of farm is limited; that the

breeders are hybridized in cattle breeding; and that the cattle races could not be protected are

considered the factors slowing down the transition to the intensive agriculture.

In Turkey, there are 1,070,746 tractors and 13,804 harvesters as of 2008. Whereas the number of

tractors regularly increased by 1% each year as of 1989, the number of harvesters increased by

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2.2% in a five years period in 2004- 2008. Even though the increase in the number of harvesters

is positive, 58.5% of these harvesters being over the age of 10 as of 2008 is considered a

disadvantage. Furthermore, use of 25% plows - used to plough the lands by benefiting from

animal power - indicates that the use of technology has still not been widespread adequately in

small-sized farms(Ministry of Agriculture and Rural Affairs, 2007).

The average size of the farms is 60 decares in Turkey it is a fact that the abundance of the small-

sized landed farms prevents efficient use of the tractors owned. Though the grain production has

a major role in Turkey.

Besides use of machineries, use of fertilizers, resulting in high rate increases in productivity of

vegetable production, is fluctuating in Turkey. Particularly during crisis, use of chemical

fertilizers recesses significantly; and another reason why the use of fertilizers fails to reach the

desired levels is dependency of the higher fertilizer prices on the energy prices.

According to data of Directorate General of Production Development (TUGEM), physical

fertilizer consumption was 5,276 thousand tons by an increase of approximately 28% in 2009.

The relevant consumption was 4,129 thousand tons in 2008 after a recession by approximately

20% compared to the previous year. On the other hand, in 2004-2008, it was reported that share

of phosphoric fertilizers in the total consumption, being 32% before, recessed down to 4.7% and

share of nitrogenous fertilizers, being 66% before, increased up to 93.4% in 2009. It is noticed

that annual average consumption, being 10.1 million tons in 2003-2007, was 7.5 million tons in

2008 and 7.2 million tons in 2009. There is a decrease of the share of phosphoric fertilizers has a

deep impact on this decrease occurred in recent years.

According to IPARD 2007-2013 Report, the consumption amount of fertilizer per hectare in

agricultural lands in Turkey as of 1999 is 67.8 kg Nitrogen, 28.9 kg Phosphor (P2O5) and 3.7 kg.

Potassium (K2O). In Turkey, below the world average in consumption of fertilizer per hectare;

use of alternative fertilizers as a reaction to the increasing prices and several farmers‟ tending to

crops not requiring fertilizers caused a noteworthy decrease in fertilizer consumption. Besides

the lower fertilizer consumption, unconscious use of fertilizers by the farmers constitutes an

important obstacle for achievement of the desired productivity. It was determined that the

farmers do not have adequate information and background on the soil-product types and use of

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correct amount and timing for the fertilizers and apply the same according to the advises from

hearsay instead of scientific methods.

ARABLE LANDS

In Turkey while the land, exposed to water erosion, is about to be 67 million hectares (85% of

the total lands), the land, exposed to wind erosion, is only 0.3 million hectares. 36.4% of the total

lands are exposed to serious erosion (abrasion of 25% of the surface and soffit of the land) and

22.3% of the total lands are exposed to severe erosion with the abrasion of 22.3 of the surface of

the land and %25-75 of the so fit of the land. Rough and hilly nature of Turkish lands, irregular

and fluctuated rainfalls and intensity of the rainfalls, superficial soil profile depth, lower rate of

organic substances in the soil and natural disasters such as forest fires are the major reasons for

the erosion in Turkey. On the other hand, misuse of the lands also causes problems. These are

unconscious annihilation of the forests, excessive pasturage and mismanagement of the arable

lands .

That water resources in several lands become unusable any longer due to instability of the

rainfalls appears as a factor, which may cause drought and adversely affect the arable nature of

the land by the way so.

INTEGRATION OF AGRICULTURAL LANDS

One of the factors causing the size of the farms to be as such limited is the Heritage Act. Sharing the

inherited lands between inheritors results in fragmentation of the lands and constitutes one of the

obstacles for transition to the intensive agriculture enabling higher productivity. Access in only 85% of

the lands by cadastral works, limited coverage during the title deed renewal process creates significant

ambiguities on land ownership. This deficiency might - perhaps - become a factor deferring arise of large-

scaled farms created by free market mechanisms in time besides prevention of effective operation of the

agricultural land market. Ownership problem causes use of the agricultural lands as guarantee and makes

it difficult to access in the credit market and keeps many agricultural fixed capital investments below the

optimal level.

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DRY AND IRRIGATED FARMING

In Turkey, as of 2007, 5.2 million hectares (24%) of 21.9 million hectares arable lands are irrigated

agricultural lands. According to the data of Turkish Statistics Institute, while this rate is 72.7% for

vegetable and flower growing, the rate for the fruits and other long life plants is 25.8%. Availability and

stability of water resource in the agricultural land gain importance in respect of selection of products and

irrigation method applicable in the agriculture. In Turkey, in 1995-2005, higher increase of 33% in use of

underground and aboveground waters indicates that in the following years, problem of satisfaction of the

water demand would arise together with the population increase. Diminishing of water resources in

several regions due to global climate change and intensification of the water utilization in agriculture are

considered other factors increasing the pressures on the water resources. In Turkey, the land that can

economically be irrigated is 8.5 million hectares.

The irrigated land was extended up to 4.9 million hectares as of January 2005; 762 thousand hectares of

which could not be irrigated adequately. According to IPARD 2007-2013 report, whereas there is no

definite data regarding water consumption per product and for total irrigation, given that the average

consumption is 5000 m3/ha, it is estimated that annual water consumption is roughly 24.5 billion

m3.Konya is on the top of the list with its irrigated lands of more than 400 thousand hectares in Turkey.

Adana and Sanlıurfa follow Konya with their irrigated lands of larger than 200 thousand hectares. Bingol

(67.3%), Igdır (59%), Hatay (53.5%), Osmaniye (51.6%) and Hakkari (50.7%) are on the 31 top of the list

in respect of the rate of irrigated lands in the total agricultural lands (Ministry of Agriculture and Rural

Affairs, 2007).

Modern irrigation systems - particularly drip irrigation and sprinkling - ensure 50% saving and 20%

efficiency increase in agriculture. In Turkey, only 6% of the agricultural land around 8.5 million hectares,

which is able to be irrigated, is irrigated by dripping system.

FARMS TYPES

According to the 2001 census, The average farm size is 6 hectares. Nearly 70 percent of the agricultural

farms have less than 5 hectares of land. The land and livestock owned are also distributed unequally. 2.5

percent of the farmers do not own any land. Small farmers (<5 ha), which constitute 70 percent of the

farmers, own little over 20 percent of the land, less than 45 percent of the sheep and little over 50 percent

of the cattle. The larger farmers (> 20 ha) constitute 5 percent of the farms, own 35 percent of the land,

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17 percent of the sheep and 10 percent of the cattle 5 .

Most of the agricultural production in Turkey originates from the coastal regions, with a certain

importance of the Aegean and Mediterranean regions. Output in these two coastal regions is dominated by

fruit and vegetable production, which corresponds well to the climatic conditions. The proximity of these

regions to the main Turkish towns as well as export markets contributes to a higher share of market

oriented and intensive farms. In the northern and eastern parts of Turkey the importance of livestock

production is quite evident. The relatively low agricultural production potential of eastern regions is

conditioned by the natural conditions such as lower rainfall, lower temperature and higher altitudes. It

also corresponds to the socio-economic conditions in rural areas as expressed by small-scale farming and

subsistence production.

According to the typology classification, farms are mostly specialised on field crop production, 25.7

percent; mix crop and livestock production, 21.8 percent; fruits and vineyard (long life crops), 19.8 .

IMPORT AND EXPORT

According to the classification of operations of the foreign trade, whereas the share of the agricultural

export in the total production is 4.4 – 4.5 billion dollars as of 2009, the share of importation is 3.3% with

4.6 billion dollars. While the rate of the agricultural export to meet the import is fluctuated agricultural

export and import interact in a balanced manner in 2009. When the years 2001 and 2009 are compared, it

is reported that the rate of export of the agricultural products in the total exportation recessed considerably

(from 6.4% down to 4.4%); however, there is no significant change in importation. Annual increase rates

of agricultural import and export are similar. In both items, annual average rate of increase is 1.1% in

2005-2009. On the other hand, when we include in this analysis the food and beverage, tobacco and

tobacco products and animal fats and vegetable oils produced in the production industry, it is noticed that

this second group contributed to the exportation considerably.

Upon examination by the way so, it is reported that the share of agriculture/food industry export in total

exportation was 10.3% and in importation was 3.7% as of 2009. These figures may be enough to maintain

the opinion that Turkey is one of the few self-supporting countries; however, given that Brazil realized

exportation of 72 billion dollars and Poland realized exportation of 16 billion dollars in 2008; it should be

asked whether Turkey could achieve a much more better performance and it should be stated that there

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exists an important unrealized potential in exportation.

Even though both the export and import generate higher sales on annual basis, the increase of the weight

of the other sectors on import and export results in recession (from 12.7% down to 10.3%) of the weight

of the agriculture/food in import and export compared to the year 2000, whereas the weight in import has

no considerable change (from 3.5% up to 3.7%). In 2009, Turkey realized agriculture/food export of 2

dollars value, however realized import of agriculture/food of 1 dollar.

On product basis, Turkey exports hazelnut, dried fig, seedless dried grapes, pistachio, dried apricot,

tobacco, olive oil, cotton, leguminous seeds and fresh vegetables-fruits to many countries particularly

European Union countries, Russian Federation and the FARMUSA. The imported agricultural products

are particularly wheat, corn, rice, oily seeds and cotton. (The Ministry of Agriculture and Rural Affairs,

2005).

SWOT ANALYSIS

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Challenges of Turkish agriculture and support schemes for farmers

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GROUP : 7

SHIPIBUILDING IN TURKEY

Ship building may be a 600 years old tradition in Turkey. the primary workplace

was established in 1390. By the sixteenth century Turkish shipyards were already largest within

the world. Ancient building skills combined with fashionable techniques associate degreed

education has enabled the Turkish shipbuilding business industry to grow to be an internationally

renowned trademark since the first 1990’s Turkish ship and yacht building industry has

fashionable, technological developed and quality certified shipyards beside well older workforce.

In Turkey’s shipyards current ships, Yachts, mega Yachts, and sailing boats area unit being

factory-made. Additionally to those, repair and maintenance services area unit provided for

vessels.

In the beginning, mostly wooden ships and yachts were being manufactured. Later

started the manufacturing of ships/yachts made of sheet iron. With its 600 years of history,

shipbuilding today is in compliance with the international standards, thanks to efforts of the

young entrepreneurs. The beginning objective of the sector was merely to meet the needs of the

Turkish Naval Commerce Fleet. However, having confirmed its technological competency

outside Turkey, and especially to the European countries, today this sector has gained a

considerable export potential.

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SNAPSHOT OF THE TURKISH SHIPPING INDUSTRY

The shipbuilding and repair industry is considered to be one of the most promising

industrial sectors in Turkey, and there have been important developments in recent years. At

present, there are 70 active shipyards in Turkey, while another 56 are reported to be in the

process of being built, although this number may be affected by the reduced demand for

shipbuilding following the 2008 world economic slowdown. The economic slowdown also

affected exports, which peaked at USD 2.7 billion in 2008, but had declined to just over USD 1

billion in 2010.

While Turkish yards have traditionally specialized in yachts and smaller commercial

vessels, in recent years they have significantly increased their capabilities and competitiveness in

the construction of larger ships. As a consequence, there are now yards that are capable of

building a wide range of commercial vessels, such as petroleum and product tankers, heavy

freighters and multipurpose container ships. In addition the yards can produce other niche market

vessels, such as fishing boats, research vessels, tugs, mega yachts, supply vessels and offshore

boats.

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The specialization of the industry is also evident in recent production statistics. Turkish

shipyards are considered to be highly ranked in the world in the production of small tonnage

chemical/oil tankers, and this is certainly supported by the order book held by Turkish yards,

which in January 2011 showed 62 orders for this class of vessel, second only to the 74 orders

held by yards in China. Turkish yards are also quite highly regarded in the production of mega

yachts.

A domestic ship owner is strong supporters of the Turkish shipyards, and for a long time

new building output was largely directed at the domestic market. In some cases, ship owners

own the yards and build vessels for their own fleets, as well as building vessels for other buyers.

This focus is understandable as the Turkish shipyards, in their early stages of

development, specialize in the types of vessels, and the tonnage ranges, that most suit the freight

tasks in the Mediterranean, Black, Marmara and Aegean seas.

“As a consequence, most of the clients of the Turkish shipyards are ship-owners that

operate in these areas, where Turkish and Russian flagged ships are strongly represented in the

merchant shipping trade globally, and are ranked as first (16%) and second (13%) respectively.

In particular, Turkish owned ships account for a 32% share of the associated shipping tasks”.

Connectivity with Railways

The total length of the Turkish railway network is 10,984 kilometers. Majority of the ports are

connected with the railway track and 440 kilometers of these railways are dual tracks with ports.

The share of railways in multimodal transport is only 4%. A few train connections in the larger

suburbs are commercially viable. The government also plans to improve the rail connectivity to

ports. In Istanbul, the Marmaray-project, a railway tunnel under the Bosporus, has been

revitalized.

Turkey has also initiated direct flights between India and Turkey.This steps also encourage

indian investors to establish their business in Turkey also. Investors will have to keep in the mind

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that competitons are so less at this stage,so if they initiate to invest their money in various

business,then there would definitely be rooted in short span of period in coming years

SHIPBUILDING AND THE TURKISH ECONOMY

In 2005, 86% of the foreign trade was carried via water.

There are 185 ports, the most important of which are: Samsun, Haydarpasa (Istanbul), Derince,

Bandirma, Izmir, Mersin and Iskenderun. The ports in Turkey can be divided into three groups:

under management of the government, the municipal council and private ports.

In parallel with experience around the world, the Turkish economy enjoyed an

exceptional period of growth between 2002 and 2007. An abundance of liquidity in the Turkish

financial system encouraged investments, which in turn drove significant economic growth in all

sectors of the economy. However, the latter half of 2007 heralded a very significant and

protracted global recession, from which the global economy is still emerging.

The effects of the decline in shipbuilding activity are quite significant, as this is a sector

that has been identified by the Turkish government as having the potential for considerable

growth, and which makes a very significant contribution to the Turkish economy. According to

figures from the Turkish Shipbuilders Association in 2008 the Turkish shipbuilding industry

contributed around USD 3.7 billion to Turkish exports, while repair and maintenance operations

added around USD 1.5 billion.

While this represents a relatively small proportion of the overall Turkish GDP, its

importance should not be underestimated, because it represents the output of an industry sector

that not only employs a large number of workers, but also contributes to the country’s industrial

capacity and technological know-how. In addition, the growing export performance of the

shipbuilding sector means that it also makes a significant contribution to Turkey’s balance of

payments and foreign currency reserves.

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The role of shipbuilding in a broad economic context was examined as part of a 2007

study that looked at factors that affected the structure of the world shipbuilding industry. That

study looked at how governments perceived their shipbuilding industries, especially given that

most business is fully privatized by their shipbuilding sectors, even though, one way or another,

most governments continue to provide support measures of some kind to shipbuilding.

“The Turkish shipbuilding industry is also helped by massive support from the

Turkish Government, which is making a big effort in defense shipbuilding. It has, for example,

placed an order for six submarines of a new type, and this is likewise intended to boost the

business of Turkish suppliers. It is also having a number of surface defense ships built at Turkish

shipyards. The Under secretariat for Defense Industries is driving these projects forward, and is

now also showing increased commitment to merchant shipbuilding. All of this gives a bright

outlook for the shipbuilding market in Turkey.”

This point is recorded simply here to emphasize the importance of the shipbuilding

sector to the Turkish economy, whether engaged in commercial or naval construction. This point

was also recognized by the Istanbul Trade Fair, where the theme for one of its Conference

sessions was “Our Future - Joint Forces, Defence Shipbuilding and Commercial Shipbuilding”.

Focusing again on commercial shipbuilding, the Under secretariat for Maritime Affairs

of Turkey noted that development plans initiated by the Turkish government over the last four

years, aimed at increasing the capacity and efficiency of the country’s shipyards, have started to

bear significant fruit. UMA noted that the sector has made significant investments over the last

few years to modernize facilities and improving their technological capabilities.

The Turkish government is also taking into consideration the possibility of boosting the

domestic production of basic materials used in ship and yacht building, in order to reduce

dependence on imported components and increase the flexibility and capability of domestic

support industries. Such a symbiotic relationship, if it can be fostered to develop complementary

capabilities, would certainly strengthen the ability of the Turkish shipbuilding sector to compete

effectively on the open market.

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While outside the mainstream commercial shipbuilding activity, leisure yachts have been

a particular niche market that has developed significantly over the last 20 years, and which has

now become a promising activity for Turkey. Turkish yards have recognized the significant

potential market for yachts built to a high standard, and a number of those yards have

reorganized their facilities in order to tap into this potentially very lucrative export market.

A well respected boating magazine recently ranked Turkey in 3rd place in the world, with

respect to orders received for yachts over 25 meters 69 projects. Like naval construction, this

niche activity will also have wider ramifications for the broader shipbuilding sector, especially

with the continuing blurring of construction techniques and materials used for very large yachts

and smaller passenger vehicles such as fast ferries.

OBSTACLES

MAJOR PROBLEMS AFFECTED BY TURKISH SHIPPING INDUSTRY

The Turkish maritime shipping industry has seen better days. Pirates holding Turkish

Ships hostage on the Somali coast and deranged Turkish captains stabbing cooks on abandoned

ships drifting without electricity and food in the Indian Ocean are but some of the trials and

tribulations damaging the Turkish maritime trade sector at present.

There is lack of credit is given by the government in a global crisis pummeling global

trade are arguably more serious challenges and are but some of the issues discussed by

participants at the annual Turkish Shipping Summit 2008, aptly named Turkish Growth at the

Crossroads: Seeking Growth in a Volatile Market

Challenges/Problem of shipping Industry of Turkey

Constantly increasing requirements to address environmental and sustainability issues as

we go about managing the shipment of cargoes around the globe.

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The consequences of significant flexibility of Customs procedure throughout the

European Union.

Facing up to overly complex European countries legislation those impacts negatively on

forwarders' business.

Instability of European countries economic condition which may be leads to business

losses.

The greatest challenge facing the Turkish shipping industry within the current downturn

is that of economic survival.

The reduction in European trade has led to a loss in industry resulting in idle ships or rise

carrying cost for the business.

The Navy needs to be equipped to ensure the safety of the sea lanes on which TURKISH

trade depend due to Somalian problem.

Constantly increasing requirements to address environmental and sustainability issues as

we go about managing the shipment of cargoes around the globe.

The consequences of significant flexibility of Customs procedure throughout the

European Union.

Facing up to overly complex European countries legislation those impacts negatively on

forwarders' business.

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Instability of European countries economic condition which may be leads to business

losses.

The greatest challenge facing the Turkish shipping industry within the current downturn

is that of economic survival.

The reduction in European trade has led to a loss in industry resulting in idle ships or rise

carrying cost for the business.

The Navy needs to be equipped to ensure the safety of the sea lanes on which TURKISH

trade depend due to Somalian problem.

Constantly increasing requirements to address environmental and sustainability issues as

we go about managing the shipment of cargoes around the globe.

The consequences of significant flexibility of Customs procedure throughout the

European Union.

FUTURE ASPECT OF SHIPPING SECOR IN TURKEY

From a general perspective, in recent years the Turkish shipbuilding industry has shown

itself capable of being quite competitive in the world market While in 2002 its share of

world output had dropped to a low point of 0.51%, this gradually reversed as the yards

became more competitive and capable of attracting orders from both domestic and

foreign buyers, so that it share of world output had quadrupled by 2008 to reach 1.83%. It

is a highest record for Turkey. On this basis, there was some justification for the very

optimistic outlook forecast by both the Turkish government which mapped out a very

significant growth by 2013.

On the basis of its 2010 production performance, when Turkey delivered 0.47 Million of

new ships to the world. Its output accounted for 0.90% of the world output for the year

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2010. This made Turkey the eighth largest producer in the world in the year 2010. But

there are some important issues associated with the decline in production in Turkey in

both 2009 and 2010 which may carry future repercussions for the industry in Turkey over

the short to medium term.

With full order books, and a contractual obligation to deliver the new vessels at specific

dates, yards around the world continued production at record levels, even though ship

buyers were frequently struggling to finance the new ships as capital markets around the

world dried up. While some orders were cancelled and the delivery of other orders

postponed, the majority of orders were completed, and continue to be completed.

These market conditions affected shipbuilders in various ways, with some shipbuilding

Economies apparently grasping the opportunity to increase their share of world

production; while others saw outputs fall, virtually in contradiction of the rapidly

growing global production. Turkey’s yards were part of the latter group, and the impact

on them seemed to be greater than shipyards in other parts of the world.

The second issue is that the world’s economic downturn also fostered a significant

structural change in world shipbuilding, as shipbuilding economies with formerly modest

outputs greatly increased their participation in the industry, and appear to have positioned

themselves to make further inroads into the shipbuilding activities of established

shipbuilding economies.

SHIPPING TRADE WITH INDIA & TURKEY

As the financial year draws to an end, the Union shipping ministry has managed to award 14

Public Private Partnership port projects with turkey, which will bring in an additional capacity of

80 million tons per annum at an investment of Rs 5,600 crore & all these things will be taken

coming10years.

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Overall, 26 projects have been awarded bringing in a capacity augmentation 14 projects

have finally been selected by the two countries, which will helpful to India to make stronger

relations with the turkey & on the other side, turkey wants to make distance from Pakistan.

Ultimately, it would helpful to sustain warmness between INDIA & TURKEY. In addition to

this government has also awarded a Rs 785 crore project for development of ship repair facility

at Cochin Port, So it can be helpful to export the goods in turkey within a short span

Time.

Last year, the government could award only three projects which included the Rs 8,000

crore fourth container terminal at Jawaharlal Nehru Port but the project will be up for re-bid in

the next financial year .For the next financial year, the shipping ministry plans to add a capacity

of 250 million tone through public and private investment & On the other side, Turkey has also

supported its flgship companies in shipping industry such as Dentas Denizcilik ve Ticaret,

Aygaz, Gemek Denizcilik, Anadolu Anonim Turk-Istan etc. to expand their business relations

with india.

GROUP : 8

INTRODUCTION OF TOURISM INDUSTRY OF TURKEY

Turkey, a country of nearly 80 million, has been home to countless cultures and empires

over the millennia. Due in large part to its rich past, today Turkey is one of the top ten countries

in terms of tourist arrivals and revenues. According to the Ministry of Culture and Tourism, 28.6

million people visited Turkey in 2010, an increase of nearly 6% over 2009. Its goal is to be

among the top five tourism-driven countries, a big challenge given the priority that tourism is

receiving from governments worldwide. Turkey’s focus on the sector is driven in part by the

significant impact that tourism has on its economy—contributing approximately $22 billion to

GDP in 2010. In fact, tourism is so important that the government provides subsidies to local

authorities to boost their tourism offerings. Over the past year, this support increased eightfold.

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Tourism is one of the largest and fastest growing industries and animportant source of

employment in Turkey as well all other countries. Tourism, in Turkey, has generated 5.2 percent

of Gross Domestic Product and 618.000 jobs and it is also a major producer of government

revenue, accounting for US$ 3.5 billion of taxes in 2001(MOT, 2002). Since the 1980s, tourism

has also been the focus of successive governments’ policies to achieve export-led

industrialization. The Tourism Encouragement Law of 1982, that gave generous incentives to

tourism investment, has resulted in exceptionally rapid growth in tourism in terms of volume,

value, and physical infrastructure (Sahin, 1990). The main policy problem of Turkey, since the

inception of the Republic, was the development of the economy. Tourism, after 1960, is

increasingly being recognized by both governments and the public as the main driver of

economic prosperity and development. Using Anderson’s (1994:5) definition of policy as “a

purposive course of action followed by an actor or set of actors in dealing with a problem”,

tourism policies, in Turkey, as in other developing countries, have rooted in to remedy

macroeconomic problems. The main purpose of the chosen tourism policies, since 1960s, has

been to provide desperately needed foreign exchange and employment. In other words, like

many governments in the developing world, successive Turkish governments, as actors which

define the problem, design, formulate, adopt and implement policies, have seen tourism as a

relatively cheap and easy means of securingforeign currency earning and of creating job

opportunities for an increasingnumber of unemployed people. This is needed simply tofinance

imported investment goods required for industrialization, repayment offoreign debts and interest,

and to give hope to the large number of unemployed young people (Tosun, 1999). Moreover, in

line with new right philosophy and neo-liberal policies of 1980s, Turkey has also accepted

tourism as one of the new “growth sectors” and means of demonstrating the implementation of

the “outward-oriented, export-promotion” growth policy designed and recommended by

international lending agencies such as the International Monetary Fund (IMF) and the World

Bank (WB) (Brohman, 1996:49). That is to say, under pressure from macroeconomic

imperatives, crippling debts, low export potential and the loss of revenue from Turkish workers

living abroad, Turkish government prioritized the development of the tourism industry since the

1980s (TYD, 1992) without the benefits of a proper cost-benefit analysis and without taking into

account the risks associated with international tourism (Tosun& Jenkins, 1996).

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MAJOR ATTRACTIONS

Sailing

Turkey has 8,333 km of coastline to the north, south and west. The sailing industry has grown

over the past 40 years and is popular with residents as well as foreign visitors. The number of

licensed yacht companies has remained stable, at nearly 100, since 1995, offering a bed capacity

of about 6,000. An additional nine foreign sailing companies offer 2,500 beds. A large number of

marinas now dot the coastline between Istanbul and Antalya and more are scheduled for

development. The harbours are well equipped and the most established marinas are easily

accessible from airports at Antalya, Dlanman, Izmir and Istanbul.

Outdoor Recreation, Culture and Heritage

Turkey’s natural and cultural resources offer almost unlimited possibilities for the tourist. Apart

from sailing products, which have been widely developed in recent years, interest is also growing

in scuba diving, mountaineering, skiing and golf, with a view to extending the season and

diversifying the market. The government is particularly keen to develop golf tourism and has

designated ten sites for potential international level courses.

Employment in tourism industry

A total 1.5 million jobs (direct and indirect) are expected to be generated across the broader

spectrum of the Travel & Tourism Economy including:

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• Travel company employment;

• Government agency employment; and

• Supplier company employment

Capital investment in tourism industry

The largest component of capital investment originates from the private sector, which is expected

to invest US$ 3.2 billion in new plant and equipment, while the public sector is expected to

invest US$ 1.0 billion in new Travel & Tourism infrastructure in 2001.

This represents a small loss on year 2000 results, due mainly to the uncertainty of Turkey’s

overall economy this year, and follows a major drawback and recovery in capital investment

(1999/2000) which followed Turkey’s overall economic situation. Over the next ten years (2001-

2010), the average contribution of Travel & Tourism to Turkey’s capital investment account is

expected to grow at a strong rate of 5.3% per year in real terms. The cumulative investment

(2001-2010) is expected to total US$ 15.8 billion (public sector) and US$ 51.1 billion (private

sector)

Tourism statistics

Foreign tourist arrivals increased substantially in Turkey between 2002 and 2005, from 12.8

million to 21.2 million, which made Turkey a top-10 destination in the world for foreign visitors.

2005 revenues were US$17.5 billion which also made Turkey one of the top-10 biggest revenue

owners in the world. In 2011, Turkey ranked as the 6th most popular tourist destination in the

world and 4th in Europe.

Structure, Function, Business Activities

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Turkey as a travel destination offers the traveller culture, art, sports and a good value for the

dollar. It is one of the ten top travel destinations in the world. With such a long coastline along

the sea Turkey offers swimming, boating, water rafting, yachting, hiking, biking, and hot air

ballooning. These are just a few of the many fun activities you will experience when visiting

Turkey.

Explore the many exciting air sports such as paragliding, delta wings, ballooning, and

parachuting. Turkey has approximately 40,000 caves and caverns to explore. For active

explorers the from the Caverns of Antalya to the Caves of Zongulduk there is ample opportunity

in Turkey to explore the interesting geological formations. This sport is known as spelunking.

1. Air Sports in Turkey

The air sports that people participate in are hang gliding, parachuting, plane gliding, and Para

gliding. Para gliding is an exciting sport that was first done in Turkey mostly by university air

sports clubs. Mount Baba, in the territory of Fisheye is near oluDeniz or the Blue Lagoon is a

popular paragliding spot. It takes about forty minutes from the lagoon to get to the mount. It is a

good place for paragliding from April to October. Oludeniz is the original place where Para

gliding was undertaken in turkey.

Camping in Turkey ranges from $3.00 to $10.00 a night for each tent. Some of the camping sites

are rugged, while others are equipped with camping gear for you to use and some of the

campsites also have A-frame bungalows. The price for bungalows is different for each campsite.

A

2. Cruising Blue Seas

If you are interested in romance, history, adventure, or even business, Turkey's blue seas have

everything you could want and more. With the Turkish Lira fetching 1.167 to 1 American dollar

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chartering a yacht is affordable and with the plethora of companies vying for your patronage, it's

also easy!

Comparative Position of Tourism industry with India and Gujarat

INDIAN TOURISM

Domestic tourism is very huge in the country, promoted by various intents. Pilgrim and leisure

tourism are two very important sectors. A lot of scope is available for new businesses to enter

and tap the segment. With the rising economic status of the middle class and affluent population,

outbound travel is on the rise. Though Thailand, Malaysia, and Singapore circuit the most

favored destinations among the tourists, interest for off-track destinations are also increasing.

Foreign tourist arrivals in the country have increased substantially during the past decade

motivated by both, business and leisure needs and are further expected to grow at a CAGR of

around 8% during 2010-2014, as per our new research report “Indian Tourism Industry

Analysis”.

Tourism sector in turkey:

1) Attention turns to Turkey:

The political situation in North African countries, as well as the struggle of EU countries such as

Greece, led tourists to consider Turkey as an alternative destination in the review period.

Turkey’s affordable unit prices (especially for package tours and early reservation), long coastal

line and other natural features made the country a good holiday destination.

2) Tour operators start to focus on domestic tourists

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Discounts for early reservation and low unit prices used to be applied to foreign tourists in

Turkey, and many tour operators neglected domestic tourists. However, after the effects of

economic stagnation in 2009 faded away, many tour operators started strong marketing and

promotional activities to attract domestic tourists in Turkey.

3) Greece becomes a summer holiday destination for Turks

Even though Turkey and Greece are neighbouring countries, it was not until recently that Greece

became a summer holiday destination for Turks. The main reasons were unit prices (Turkish lira-

euro exchange rate), as well as the similar natural environment of both countries. However,

economic stagnation in Greece led the unit prices of package tours to decline

4) Internet transactions are increasingly popular amongst the younger population

Due to increasing internet, computer and Smartphone penetration in Turkey, the younger

population (which accounts for the majority of the total Turkish population) increasingly

preferred online purchases in the review period. In addition, travel retailers such as airline

companies, bus/coach companies, hotels and tour operators started to use social media tools

more effectively for marketing and promotion, and offered more affordable prices when

purchasing online.

5) Recession in EU may affect Turkey

Since EU countries are the main export markets for Turkey, possible economic stagnation in EU

countries could affect the Turkish economy in the short term, which would decrease GDP,

consumer expenditure and consumer confidence in Turkey. During times of crisis, consumers

mainly postpone their holiday plans. A possible economic crisis in the EU and its effect on

Turkey may hamper the growth of tourism over the forecast period. Consumers will look for

affordable options such as package tours and early reservation discounts

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Comparison of Sahara tours and travels from India and “TURKEY

HOLYDAY EXPERTS” of turkey

SHARA TRAVELS AND TOURS:

Sahara Travels & Tours is a travel company based in Mumbai which has excelled in providing

travel related services to outbound, inbound and corporate clients. We specialize in servicing the

corporate sector and can take care of total management. We are an established company that has

an excellent reputation for customer care and professionalism. We are known for going out of

our way to ensure that the travel packages provided by us make for a pleasurable and trouble free

experience.

“TURKEY HOLIDAY EXPERTS”

About turkey holyday experts

Travel for Travelers.

From the East Coast to Eastern turkey and Little Italy to the Italian countryside, Turkey holyday

experts help travelers travel more often.

Turkey holyday experts’ designs tours for Travelers with a capital T: Those people who love to

get out and get away … People who want to see and experience the world. Our goal – a pledge –

to them is to make their favorite pastime an affordable reality.

Choice and Personalization; Inclusion and Value.

Turkey holyday experts: "A complete, orderly and harmonious system." Traveling with Turkey

holyday experts is far easier – and more "harmonious, complete and orderly" than going it alone.

And, best of all, our travelers can personalize their getaway thanks to well-designed itineraries

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that combine "must-see" sights with significant time (40 percent) to explore interests and

passions on their own.

Since inventing the budget vacation more than 40 years ago, Turkey holyday experts has refined

the concept of low-cost travel packages. Today, we offer travelers more than 100 vacation

packages, to nearly every corner of the world, at the best value. And, nine in 10 travelers think

we’re doing worldwide getaways right, saying we’ve met or exceeded their expectations.

Present Position and Trend of Business (import / export) with India / Gujarat

during last 3 to 5 years

1) TRADE OF BUSINESS (EXPORT AND IMPORT) IN TURKEY:-

(A)SHARE OF TOURISM SECTOR IN TOTAL EXPORTS OF TURKEY:-

International tourism, receipts (% of total exports) in Turkey was 15.92 as of 2010. Its highest

value over the past 15 years was 21.73 in 2002, while its lowest value was 11.44 in 1999.

Definition: International tourism receipts are expenditures by international inbound visitors,

including payments to national carriers for international transport. These receipts include any

other prepayment made for goods or services received in the destination country. They also may

include receipts from same-day visitors, except when these are important enough to justify

separate classification. For some countries they do not include receipts for passenger transport

items. Their share in exports is calculated as a ratio to exports of goods and services, which

comprise all transactions between residents of a country and the rest of the world involving a

change of ownership from residents to nonresidents of general merchandise, goods sent for

processing and repairs, nonmonetary gold, and services.

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(B)SHARE OF TOURISM SECTOR IN TOTAL IMPORTS OF TURKEY:-

International tourism, expenditures (% of total imports) in Turkey was 2.77 as of 2010. Its

highest value over the past 15 years was 3.93 in 2001, while its lowest value was 1.98 in 2008.

Definition: International tourism expenditures are expenditures of international outbound visitors

in other countries, including payments to foreign carriers for international transport. These

expenditures may include those by residents traveling abroad as same-day visitors, except in

cases where these are important enough to justify separate classification. For some countries they

do not include expenditures for passenger transport items. Their share in imports is calculated as

a ratio to imports of goods and services, which comprise all transactions between residents of a

country and the rest of the world involving a change of ownership from nonresidents to residents

of general merchandise, goods sent for processing and repairs, nonmonetary gold, and services.

CONTRIBUTION OF TOURISM SECTOR IN TOTAL GDP OF TURKEY:-

DIRECT CONTRIBUTION:-

The direct contribution of Travel & Tourism to GDP reflects the ‘internal’ spending on Travel &

Tourism (total spending within a particular country on Travel & Tourism by residents and non-

residents for business and leisure purposes) as well as government 'individual' spending -

spending by government on Travel & Tourism services directly linked to visitors, such as

cultural (eg. museums) or recreational (eg. national parks).

TOTAL CONTRIBUTION:-

The total contribution of Travel & Tourism includes its ‘wider impacts’ (ie the indirect and

induced impacts) on the economy.

The ‘indirect’ contribution includes the GDP and jobs supported by:

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Travel & Tourism investment spending – an important aspect of both current and future activity

that includes investment activity such as the purchase of new aircraft and construction of new

hotels; Government 'collective' spending, which helps Travel & Tourism activity in many

different ways as it is made on behalf of the ‘community at large’ – eg tourism marketing and

promotion, aviation, administration, security services, resort area security services, resort area

sanitation services, etc.

CONTRIBUTION OF TOURISM SECTOR IN TOTAL GDP

The economic contribution of Travel & Tourism: Nominal prices

TURKEY

TRY bn ,nominal prices 2006 2007 2008 2009 2010 2011 2012E

1) Visitor exports 26.3 26.7 32.2 37.7 36.8 46.2 48.4

2)domestic Expenditure 30.6 35.2 37.7 38.6 44 52.2 58.5

3)Internal tourism consumption

(=1+2+individual spending) 57 62 70 76.4 80.9 98.5 107

4) Purchase by tourism providers

including imported goods ( supply chain) -25.4 -27.6 -31.5 -33.6 -36.1 -45.2 -49.3

5) Direct contribution of travel and

tourism to GDP

(3+4)

31.6 34.4 38.6 42.8 44.8 55.1 59.7

6) other final impacts( indirect and

induced)

22.8 24.8 27.9 31 32.4 39.8 43.1

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Domestic supply chain

7) capital investment 13.5 10.9 14.6 17.2 19.4 23.9 26.7

8) government collective spending 0.5 0.6 0.6 0.7 0.8 0.9 0.9

9) imported goods from indirect

spending -3.7 -2.5 -3.6 -2.5 -4.2 -6.1 -7

10) induced 16.7 17.6 20 23.6 24.3 28.2 30.4

11)Total contribution of travel and

tourism to GDP 81.4 85.8 98 112.8 117.4 141.8 154

12)employment impacts (‘000)

Direct contribution of travel and tourism

to employment

495.4 441.4 461.1 458.7 472.5 509.6 532.2

13) Total contribution of

Travel and tourism to employment 1716 1714 1759 1862 1840 1939 2004

14) other indicators (expenditure on

outbound travel ) 4.3 4.6 5 6.6 7.1 7.9 8.5

Trade barriers between India and turkey in tourism sector

1) Import Licensing:

One of the most common non-tariff barriers is the prohibition or restrictions on imports

maintained through import licensing requirements. Though India has eliminated its import

licensing requirements for most consumer goods, certain products face licensing related trade

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barriers. For example, the Indian government requires a special import license for motorcycles

and vehicles that is very restrictive

1) Standards, testing, labeling & certification:

The Indian government has identified 109 commodities that must be certified by its National

Standards body, the Bureau of Indian Standards (BIS). The idea behind these certifications is to

ensure the quality of goods seeking access into the market, but many countries use them as

protectionist measures.

1) Anti-dumping and countervailing measures:

Anti-dumping and countervailing measures are permitted by the WTO Agreements in specified

situations to protect the domestic industry from serious injury arising from dumped or subsidized

imports. India imposes these from time-to-time to protect domestic manufacturers from

dumping. India's implementation of its antidumping policy has, in some cases, raised concerns

regarding transparency and due process.

1) Export subsidies and domestic support:

Several export subsidies and other domestic support is provided to several industries to make

them competitive internationally. Export earnings are exempt from taxes and exporters are not

subject to local manufacturing tax. While export subsidies tend to displace exports from other

countries into third country markets, the domestic support acts as a direct barrier against access

to the domestic market.

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2) Procurement:

The Indian government allows a price preference for local suppliers in government contracts and

generally discriminates against foreign suppliers. In international purchases and International

Competitive Bids (ICB's) domestic companies gets a price preference in government contract

and purchases.

3) Service barriers:

Services in which there are restrictions include: insurance, banking, securities, motion pictures,

accounting, construction, architecture and engineering, retailing, legal services, express delivery

services and telecommunication.

7) Other barriers:

Equity restrictions and other trade-related investment measures are in place to give an unfair

advantage to domestic companies. The GOI continues to limit or prohibit FDI in sensitive sectors

such as retail trade and agriculture. Additionally there is an unpublished policy that favors

counter trade. Several Indian companies, both government-owned and private, conduct a small

amount of counter trade.

(a) IMPORT POLICIES

Tariffs and Quantitative Restrictions

Turkey applies the EU’s common external customs tariff to third-country nonagricultural imports

(including from the United States) and does not impose duties on nonagricultural items from EU

andEuropean Free Trade Association (EFTA) countries. Turkey continues to maintain high tariff

rates on many food and agricultural product imports. Tariffs on fresh fruits range from 15.4

percent to 145.8 percent. Tariffs on processed fruit, fruit juice, and vegetables range between

19.5 percent and 130 percent.

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Import Licenses and Other Restrictions

Import licenses are required for products that need after-sales service (e.g., photocopiers,

advanced data processing equipment, and diesel generators), distilled spirits, and agricultural

products. U.S. firms complain that lack of transparency in Turkey’s import licensing system

results in costly delays, demurrage charges, and other uncertainties that inhibit trade. U.S.

FOREIGN TRADE BARRIERS

WTO’s rulings and recommendations expired at the end of April 2008. Turkish authorities have

taken no recent actions to impede rice imports, and rice exports in 2010 reached record levels.

The Turkish government has taken a number of steps to liberalize the spirits and tobacco markets

including completing the privatization of the state-owned alcoholic beverage company and the

state owned tobacco company, as well as some opening to private firms of the ability to import

wine and alcoholic beverages.

(B) SERVICES BARRIERS

Telecommunications Services

The Telecommunications Authority (TK) is responsible for enforcing bans on Internet content

that the courts have determined to be offensive. This has on many occasions led to TK blocking

access for all consumers to various Internet-based service providers, such as the weblog hosting

site www.wordpress.com, social networking sites like MySpace, and the video-sharing website

YouTube.

Other Services Barriers

There are some restrictions on establishment in the financial services, legal services,

broadcasting, and petroleum sectors. Turkish citizenship is required to practice as an accountant

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or certified public accountant, or to represent clients in Turkish courts. Legislation awaiting final

approval by Parliament would permit foreign doctors to work in Turkey.

(c) INVESTMENT BARRIERS

Energy Sector

Turkish law calls for a liberalized energy market in which private firms are able to develop

projects with a license obtained from the Energy Market Regulatory Authority, an independent

regulatory body. The state electricity utility has been unbundled into power generation,

transmission, distribution, and trading companies. As of December 2010, ten of the 21 regional

distribution companies have been fully transferred to the private sector, eight have been tendered

are in the process of being transferred, and threeare in the tender process. The government plans

to finalize privatization of all distribution regions and start privatization of the generation

facilities in 2011. Liberalization in the natural gas sector has also faced delays. The state pipeline

company, BOTAS, remains dominant in gas importation, despite legislation requiring a phased

transfer of 80 percent of its gas purchase contracts to the private sector by the end of 2009.

Except for a small scale contract transfer tender in 2005, BOTAS has failed to reach its targets

and still has an 86 percent share in the gas market.

Work Permits:

Many foreign (and reportedly many Turkish) employers perceive the difficulty in obtaining

Turkish work permits for professional or highly skilled foreign workers as a pervasive problem.

Companies complainthat the application process is time-consuming and requires extensive

documentation, the adjudicationprocess is lengthy (often exceeding the time for which the permit

is requested), and the chances ofapproval are low.

Corruption:

Turkey is a party to the OECD anti-bribery convention and passed implementing legislation that

makes bribery of foreign officials illegal and no longer tax-deductible. Turkey is also a State

Party to the United Nations Convention Against Corruption, which requires State Parties to

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criminalize domestic and foreign bribery and other corruption offenses as well. Despite this,

many foreign firms doing business in Turkey perceive corruption to be a problem.

Taxes

Turkey assesses a special consumption tax between 27 and 50 percent on all motor vehicles

based on engine size, which has a disproportionate adverse effect on automobiles imported from

the United States.

Pharmaceuticals:

The pharmaceutical industry reports that its sales have been severely affected by government

price controls and an awkward, burdensome reimbursement system. In 2008, Turkey

implemented changes in its reimbursement scheme that increased the cost borne by

pharmaceutical manufacturers. In September 2009, faced with a growing health care budget

deficit, the Turkish government decreed additional mandatory discounts totaling over $2.3

billion. A large majority of the burden of these discounts fall on foreign manufacturers of

pharmaceuticals. In December 2009, the government and pharmaceutical industry agreed on a

compromise pricing deal that will require U.S. firms to provide extra discounts of approximately

$800 million per year.

GROUP:9

TELECOMMUNICATION INDUSTRY OVERVIEW

The telecommunications business of Turkey, with a history of 170 years constitutes one

of the central systems of the planet. Sultan Abdulmecit laid the fundamentals of today's

present day telecommunications foundation in Turkey under the name "Postahane-I

Amirane".

On October 23, 1840.0 ITU the most elevated standardisation power of the states in the

field of telecommunications on the planet, has more than 700 parts from 191 nations, the

imperativeness of an establishing part could be grasped effectively.

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First and foremost regulations of the telecommunications business were made after the

statement of the Republic, with the Telegram and Telephone Law issued in 1924.

So as to empower an autonomous power to manage the telecommunications business

halfway, a further change was made and presented in the radio law on April 5, 1983, with

the goal that the Telecommunications Authority was built and started.

A further law was issued on November 10, 2008 with the end goal of gathering essential

regulations identified with the electronic correspondence industry to guarantee the

consistence with the regulations of the EU under a specific law.

Consistent with this law, the approvals and obligations of the Telecommunications

Industry were improved and the name of the conglomeration was modified to Information

and Communication Technologies Authority.

While dissecting the foundations in the telecommunications base of Turkey sequentially,

first telegram was sent on August 9, 1847 the first phone line was laid in July 1881 and

the first trade with 50 lines was introduced on May 3, 1909.

Turkey began its multi-line universal telecommunications fixes given over the undersea

coaxial link laid between Antalya and Catania started on April 6, 1976, and its satellite

correspondence by utilizing the base station giving the conveyance the satellite

INTELSAT on April 23, 1979.

On December 18, 1984, the first computerized phone trade was utilized as a part of

Ankara to supplant previous trades with transfers, with those trades, which were simpler

to fix, had less foot shaped impression and higher limit.

After a short period, in 1989, the Package Switching Data Network was started, with the

goal that a different foundation was laid for the industry identified with the advanced

information transmission.

On December 21, 1990, Turkey finished up a concurrence with France for the handling of

its national satellite, Turksat. On August 11, 1994, Turksat 1A was started and put into

space.

On March 27, 1991, only 3 years after the first business and standard computerized cell

telephone dialogue over the GSM engineering utilized within Finland, Turkey started its

GSM framework on February 23, 1994.

Liberalization in the Turkish Telecommunications Industry

Turkey's telecommunications systems and aids were improved and offered straight by the

national government through Posts, Telegraph and Telephone which was a state imposing

business model made dependent upon the contention that the area was a characteristic

imposing business model.

This administration proceeded until 1995 and the "Telegraph and Telephone Law 406" of

21 February 1924 had as far back as anyone can remember gave lawful groundwork to it.

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Major administrative and structural updates at the worldwide level, around others those

of the European nations, towards the liberalisation of telecommunications business

sectors influenced Turkey also.

In Turkey, a major structural change to liberalisation began with authorization of Law

4000 in June 1994 to strip telecommunications fixes from the straight inclusion of the

legislature by creating Turkish Telecommunications Inc. as a state budgetary venture.

With this law, it was made plausible to privatise 49% of the association.

In the meantime the versatile telecommunications business was opened to constrained

rivalry when the two portable specialists of GSM 900 began business under income

imparting assertions to Turk Telecom

Additionally, Internet utility suppliers began to seem under aid contracts with Turk

Telekom.

Further steps towards liberalisation were taken by altering certain parts of Law 40007 to

liberalise part of the business of worth included telecommunications fixes.

The change this time presented a licence arrangement of such aids incorporating versatile

phone aids.

The power to issue the licences was endowed to the Ministry of Transport yet it could do

so just upon the proposal of Turk Telekom. Under this framework, the two GSM 900

specialists were allowed a licence with a 25-year term in 1998.

The following colossal change went in January 2000 with the authorization of an altering

law called Law 45028, which disconnected arrangement making and administrative

capacities of the legislature by making a free telecommunications administrative figure,

the Telecommunications Authority, as the first division particular controller in Turkey.

Thus, administrative capacities of the Ministry of Transport were exchanged to the

Authority in guideline, and the General Directorate of Radio conveyance, an

administration figure accountable for radio recurrence administration under the Wireless

Law was annulled and all of its capacities were exchanged to the Telecommunications

Authority.

Moreover, the new correction discharged Turk Telekom further from the state control by

updating its status as state venture and agreeing it with freedom ready to go operations.

This change of Turk Telekom's status was settled on together with a choice to end its

imposing business model in settled voice telephony four years after the fact and to let the

association get ready for rivalry thereafter.

This revision law of January 2000 additionally indicated liberalisation of

telecommunications utilities outside the extent of Turk Telekom's restraining

infrastructure under a licence framework by the Ministry of Transport.

A further improvement went in May 2001 with an additional altering law 11,

substantially therefore of force from the International Monetary Fund who had

incorporated quickened and finish privatisation of Turk Telekom in its preconditions for

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discharging its suspended money related support, having confronted two unsuccessful

endeavors to pitch Turk Telekom's offers to global key accomplices.

An additional change identified with the privatisation of Turk Telekom.

This new law 4673 permitted 100% privatisation of the association with the exception of

a purported "brilliant impart" saved for the legislature to address security and open

investment concerns.

The point of the brilliant impart is to give the State to privileges of approbation in the

choice making of the Board so as to ensure national investment concerning the economy

and security.

It too incorporates a voting right and a regard right on imperative choice making of Turk

Telekom, for example altering the articles of affiliation, station of new associations,

being a gathering to worldwide assentions, and exchange of certain imparts, from the

viewpoint of securing national investment.

The Under secretariat of Treasury, which is a part of the Board of Directors of Turk

Telekom wields the resplendent allotment.

Innovation in the telecommunication industry of turkey

Increasing competition in telecommunications market has resulted in lower prices,

diffusion of telecommunications services, greater variety of services and speedier

innovation processes.

In other words, increasing competition forced telecommunications operators to innovate

in order to provide more developed and differentiated services to consumers.

According to Henten innovations in telecommunications have been made in products,

processes, billing and marketing and it is possible to differentiate between network and

service innovation in the telecommunications industry.

Innovations in the telecommunications industry have increased the importance of flexible

IP-based technologies, because IP-based technologies stimulate innovation by reducing

the cost and increasing the flexibility of making innovations.

As a result, competition opportunities may increase in IP-based environments. With the

development of low-cost IP-based technologies, traditional circuit switched

telecommunications networks are being replaced by next generation packet switched and

flexible networks which substantially decrease communication costs.

NGN are multi-service communication platforms over which audio, video, TV and data

services can be provided to consumers. In addition, NGN allows innovations at the non

consumer service and infrastructure levels.

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NGN decreases the costs of current telecommunications services as well as making

provision of new services which are not available on PSTN networks and public Internet

possible.

Service innovation is facilitated because NGN has a more flexible architecture compared

with that of circuit switched networks like Public Switched Telephone Network.

Advantages of NGN, such as low communication costs and flexible architecture, make its

rapid and effective deployment or implementation important for telecommunications

operators and for regulatory authorities.

Such IP-based networks are being deployed in core and access networks and have

technical, economic and regulatory dimensions.

Since the NGN has different properties than that of traditional networks, it seems

essential to reconsider telecommunications regulations, competition and innovation in the

context of NGN deployment.

Competition in telecommunications market is crucial for increasing consumer satisfaction

and for promoting innovations.

Telecommunications technologies are rapidly evolving and this evolution results in new

opportunities for competition.

Hence, competition models in telecommunications market and in new competition

concepts for the NGN environment will be addressed in this dissertation.

Facility Based Competition and Service Based Competition will be considered within the

scope of NGN deployment in Turkey.

In order to identify best competition model for an NGN environment in Turkey, current

competitiveness of the Turkish fixed voice market will be studied.

With the increasing importance of IP-based technologies and flexible NGN networks,

telecommunications operators are investing in IP-based technologies.

In this respect, IP-based services provided by telecommunications operators can be

considered as an intermediate step between traditional networks and NGN. In this

chapter, technical differences between current networks and NGN networks will be

introduced concisely in order to understand which architectural and functional differences

necessitate the changes in interconnection charging methods.

Second, the implications of the moves towards NGN and the innovations, which drive the

change towards NGN, will be introduced.

Finally, current innovations in telecommunications in Turkey will be identified and their

viability in the near and longer term future in Turkey will be examined based on

interview results.

With the increasing use of IP-based networks for voice communications, alternative

operators are also using IP-based networks for providing voice services.

In such cases, any call originated or terminated at the incumbent’s network can be carried

over IP-based networks for decreasing transmission costs.

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Similarly, alternative operators can offer point to point IP-based voice communications to

their customers.

In other words, while competition opportunities of the current alternative operators are

generally restricted by the capabilities of the incumbents‟ network, IP-based networks

and services can be used by alternative operators to differentiate their services and to

decrease communication costs.

The Current Status of Telecommunications Deployment in Turkey

Taking a snapshot of where Turkey stands as of mid-2005 in deploying telecommunications

technology is hampered by the lack of timely data, an accelerating program of regulatory

liberalization, and substantial uncertainties regarding the privatization of the incumbent

monopoly fixed line carrier, Turk Telekom. However, based on a review of the available data

and a series of interviews and discussions with industry participants, customers, and regulators,

the following tentative conclusions have been drawn:

1. The basic physical framework for the principal competing infrastructure “pipelines” is present,

although not fully developed, especially in terms of its ability to deliver broadband services.

Infrastructure in the eastern part of the country is of uneven type. Satellite-based services are

available. Cable companies operate in the principal cities of the country. While personal

computer penetration is low, an increasing percentage of mobile phones have some internet

access.

2. At present, the development and deployment of new services and additional infrastructure is

being severely hampered by lengthy regulatory delays, difficulties associated with the policies of

TTK and issues arising out of its privatization and loss of monopoly over fixed line telephony.

3. Despite, the liberalization program has attracted some new entrepreneurial investment and

management into the telecommunication sector. More is probable if uncertainties regarding the

regulatory regime and TTK’s privatization are promptly resolved.

4. The advent of limited competition in Turkey has helped to reduce the cost of many

telecommunications services, although they still remain high compared to most other OECD

countries. This is particularly the case when taxes on the sector and its customers are factored in.

5. A problem that affects most economic sectors in Turkey, but which has particular relevance

for telecommunications, is an investment climate that 6 poses special hurdles for “outsiders” –

large or small, domestic or foreign. Such hurdles include the lack of a well-functioning capital

market, a banking system with limited expertise in working with technologically-oriented firms,

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and a relatively opaque regulatory process that tends to favour existing enterprises, particularly if

they are part of a major family-controlled holding company.

Mobile Operators in Turkey

1. Turkcell

GSM-based mobile communication started in Turkey when Turkcell started its operations in

February 1994. Turkcell signed a 25-year GSM license contract on April 27, 1998 with the

Ministry of Transportation of Turkey. As of December 31, 2010, Turkcell has made 9.1 billion

US dollars worth of investment (including 2G and 3G licenses) in Turkey. Again as of December

31, 2010, with its 33.5 million subscribers (54.19% market share), Turkcell is not only the

leading operator in Turkey, but is also the third biggest GSM operator in Europe in terms of

subscriber numbers.

As of December 31, 2010, Turkcell has covered 86.97% of the entire geography of Turkey which

amounts to 99.07% of entire Turkey population; it covers 100% of the settlements with a

population 1000 or more. Turkcell has the best and widest service quality with 24.250 base

stations throughout Turkey.

Turkcell’s vision is “To ease and enrich the lives of our customers with communication and

technology solutions.”

2. Vodafone

Telsim started its operation in 1994 in order to provide services in GSM industry. Telsim signed

a 25-year GSM license contract on April 27, 1998 with the Ministry of Transportation of Turkey.

Telsim has been the number two mobile operator and the only alternative to Turkcell until 2000.

It has reached a maximum market share of 31.5 percent in 1998. However, it was seized by the

Savings Deposit Insurance Fund in February 2004 and it was put up for sale in August 2005, and

an auction was held for Telsim on December 13, 2005 with Vodafone submitting the winning bid

of $4.55 billion.The sale process was 21 completed on May 24, 2006 and Telsim joined to

Vodafone Group as Vodafone Telekomunikasyon.

Vodafone is the first GSM operator in England and made the first mobile call on 1 January 1985.

Vodafone Group has a significant role in Europe, in USA and in Far East with its subsidiaries,

partners and investments ad world’s greatest mobile communications company. As of December

31, 2010, with its 16.68 million subscribers (27.01% market share) Vodafone is the second

biggest mobile operator in Turkey. Vodafone Turkey made 2.1 billion TL investments to the

technological infrastructure within last 2 years. The total investment since the acquisition of

Telsim has reached a total of 10.2 billion TL with 17.400 base stations throughout Turkey.

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TT&TİM was officially established in February 19th, 2004 as a consequence of the merger

between Aycell, Türk Telekom's GSM Operator and İş-TİM which has been established through

the partnership of İş Bankası Group with a share of 51% and TİM with a share of 49%.

Following the merger, for a period Aria and Aycell brands existed under TT&TİM. A totally

new brand "Avea", reflecting the synergy from the merger was introduced into the market on

June 23rd, 2004. The business name "TT&TİM İletişim Hizmetleri A.Ş" was replaced with

"Avea İletişim Hizmetleri A.Ş." as of October 15th, 2004.

3. Avea

Avea is the youngest operator of Turkey and has a nationwide customer base of 11.62 million as

of December 2010. Avea is the third number mobile operator with a market share of 18.8% and

it is competing with Vodafone for the second place. Avea is offering services to 96.61% of

Turkey's population through its next generation network with more than 2,700 employees. 67%

of the Avea‟s customers are also 3G mobile subscriber. This means that Avea has a potential to

increase its ARPU by delivering value added services via 3G technology.

License Requirements In Turkish Telecommunications Market

Turkey telecommunication services had been conducted by the Government. However in

2005 the provision of these services was privatized which brought chance for the other actors to

enter into the telecommunications market for the provision of services forming part of the

telecommunication market. However, Turkish Telecommunications Incorporation which was

found after the privatization of the market, is still the sole actor of the market in relation to the

land line services. The Article 47 of the Constitution provides that the State sets which public

services are to be provided by private sector by enacting relevant Codes. In this respect the main

legislation regarding telecommunication services to be provided in Turkey is The Telegraph and

Telephone Law no. 406 (hereinafter it refers to "The Law No:406) per the provision of Article 47

of the Constitution. According to Law no. 406 the operation of telecommunication services and

foundation of the telecommunication infrastructure are subjected to Law no.406.

As per the law no. 406 which provides general principles of the telecommunication services,

trading in Turkish telecommunications market is regulated mainly by "Authorization Regulation

on Telecommunications Services and Infrastructure" based on "The Law no. 406". The article 6

of the Authorization Regulation provides that the installation and operation of a

telecommunication infrastructure is subject to obtaining a license from the Telecommunications

Authority. The type of the license to be issued by the Telecommunications Authority depends on

the activity to be conducted in the market. In this respect, there are four types of permissions

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provided under the Authorization Regulation namely: "Authorization Agreement", "Concession

Agreement", "Telecommunication License" and "General Authorization".

Authorization Agreement means the agreement to be concluded by and between the Turkish

Telecommunications Incorporation and the Telecommunications Authority with a view to

regulating any rights, entitlements and obligations relevant to provision of all kinds of

telecommunications services, including value-added services and operation of

telecommunications infrastructure, as valid for a certain period of time to be justified by the

Authority with regard to the current circumstances.

Concession Agreement means the agreement to be concluded by and between the Authority

and the operator for provision of the telecommunications services and/or operation of

telecommunications infrastructure laid down in the concession agreement. Telecommunications

services to be provided and/or telecommunications infrastructures to be built up or operated by a

limited number of operators on a national level are governed under a concession agreement to be

signed with the Authority. The important thing which has to be paid attention is that according to

Telecommunication Authority's decisions if there is a concession agreement between the

Telecommunication Authority and the operator, after the termination of the agreement for any

reason, the operator should assign the facility to the Telecommunication Authority or a company

which is indicated by the Authority.

Telecommunication License differs in two types. If the services or the infrastructures are built

up or operated by a limited number of operators on a regional or local level then the 1st Type

Telecommunication License is to be granted. However if these services or infrastructures are the

ones which need not be executed by a limited number of operators and falling under the Article

18 of the The Telegraph and Telephone Law no. 406 then the 2nd Type of Telecommunication

License is required. These are the services such as mobile telephone, pager, data network, cable

TV as counted in the Article 18 of the law.

General authorization means the overall regulatory procedure that authorizes operators,

through the agency of the Authority, for provision of a certain telecommunications service,

subject to general stipulations and a registration requirement at the Authority.

Telecommunications services and/or telecommunications infrastructures to be built up and

operated, which need not be executed by a limited number of operators and do not fall under

Article 18 of the Telegraph and Telephone Law no. 406 are performed via registration under

General authorization at the Authority.

When the Telecommunication Authority agrees to grant a license to one of the applicants, it

issues a decision and publishes the decision on its website. Hence the telecommunication market

is provided to be transparent and every actor may have the sufficient tools to monitor the other

players of the market. The Telecommunication Authority also announces the companies which

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leave the market. Due to this strict regulation of the Telecommunication Authority which is open

to the audit of the interested parties, Turkish Telecommunication market despite having rather a

short history after the privatization, it is one of well functioning areas of Turkish economy

Common player of India and Turkey

Vodafone is the only company which is common between India and Turkey.

Telsim is the previous brand name of Vodafone group in Turkey. On 26th

May 2006

telsim changed its name.

Vodafone and turkey merged because to provide better service to the customers. Turkish

people are very conscious about the services.

In the beginning of the contract Vodafone was not performing better than Turkcell they

were not satisfying the need of customers.

But now it is the second largest company of turkey with 18.352 million users as on 30th

June 2012. Turkey is the fastest growing country for Vodafone as compare to the other

countries.

Vodafone is on the second position both the countries. In turkey the it is planning to

increase their market share and compete turkcell and avea in Turkish market.

Growth of Vodafone in Turkey and India

Vodafone reported solid fiscal 2011 results. Revenue has increased 3.2% from the year

2010 ahead of the 2.4% we expected thanks to acquisitions and currency movements.

Service revenue on a comparable basis increased 2.1%. The Africa, Middle East, and

Asia Pacific region provided the majority of the firm's growth, with sales improving

11.8%. The two major businesses in the region, India and Vodacom, increased revenue

16.2% and 5.8%, respectively.

Vodafone's Indian subscriber base continued to show strong growth, jumping 39% during

the year to 136.9 million, but average revenue per user declined as many of these new

customers have lower incomes and use their phones less.

Vodafone's strongest revenue growth by country was in Turkey, in the firm's European

division. The Turkish unit's revenue jumped 28.9% year over year, continuing the strong

rebound that has followed a rebranding and significant network upgrade.

Operations in much of the rest of Europe struggled because of mobile termination rate

cuts, increased competition and weak economies in peripheral countries.

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As a result of higher government interest rates and lower cash flows, Vodafone wrote

down the value of its stakes in Spain, Italy, Ireland, Greece, and Portugal by a total of

£6.15 billion.

Vodafone also increased its dividend 7.1%, in line with its goal of increasing dividends at

least 7% annually through fiscal 2013. With the asset sales Vodafone has completed and

the stock it is buying back, we think the firm will be able to continue to increase its

dividend.

Growth prospectus of Turkish telecommunication industry

Turkish growth will be determined by the following factors

With the increase in the technology and the competition in the market there is rapid

growth in the telecommunication industry of turkey.

The service providers focuses on the quality of the service than the charges of providing

that service.

Turkey is one of Europe's quickest developing economies, and has a generally sound

foundation.

Among the major players in the industry turkcell has the better growth opportunities than

other players.

Turkcell have more representative with the help of those they can satisfy their customer

better than other company.

They nearly have 23 million prepaid and 11.7 million postpaid subscriber with them.

By offering the promotional offers they can increase their market in turkey.

Vodafone also have the better growth opportunities as they are present in the different

countries, by changing their strategies to serve customer they can also become the king of

the market.

The subscribers for 3G services will increase in the near future as the companies are

reducing their charges.

Avea is planning to launch PTT cell in May 2013 to provide the customers prepaid

services by providing them services at low charges.

Vodafone is predicted to increase its share from 25.2% to 28.9% in 2013, with Avea

going from 19.1% to 24.5%.

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GROUP:10

Aviation Industry Overview

General aviation include all non-scheduled civil flying, both of them commercial and

private.

General aviation may include business private aviation, flight training, flights, air

charter, gliding , charter flights and forest fire fighting , ballooning, hang gliding,

parachuting, crop dusting, air ambulance, foot-launched powered hang gliders, traffic

reporting, police air patrols, aerial photography.

Each and every country regulate aviation in a different way, but general aviation

generally falls under different system depending up on whether it is commercial or

private and on the which type of tools occupied.

Several small aircraft manufacturer provide general aviation market, with a focal point on

flight training and private aviation.

The most significant new development for small aircraft (which form the bulk of the GA

fleet) have been the beginning of advanced avionics (counting GPS) found only in large

airliners and the introduction of composite material to make small aircraft faster and

lighter.

Ultralight and homebuilt aircraft have become more and more popular for entertaining

use, since in most of countries that allow private aviation, they are very much less costly

and less heavily synchronized than certified aircraft.

The largest aircraft to be built,up to date, is the Antonov An-225. This aircraft come from

the Ukraine, and it was built back in the 1980's. This aircraft include 6 engines, mounted

on the wing. wingspan is 88 metres {290 inches} and 84 metres long {276 inches}.

Types of Aviation

Civil aviation

General aviation

Ballooning

Soaring

Private aviation

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Military aviation

helicopter

GROWTH OF GLOBAL AIRLINE INDUSTRY

Lucintel, a top global management consulting and market research firm, has analyze the

global airline industry and presents its conclusion in ‘Global Airline Industry 2013-2020:

Forecast Analysis, Trend, and Profit.’

As per the lucintel’s report enlargement of global airline industry income is predictable

to reach 832.8 billion $ in 2020.

The global airlines industry experienced very high increase during the past 5 years and is

expected to achieve an estimated of 832.8 billion $ in 2020 with a CAGR of 3.7 percent

over the next 7 years (2013-2020).

Rising demand from promising economies, constant demand for new low-cost carrier,

deregulation and increasing middle class are factor motivating increase in markets like

Middle East and Asia.

Asian development is motivated by rising per capita GDP in promising economies such

as India ,China, and countries in the Middle East such as Saudi Arabia and UAE.

Government policy, irregular oil prices, increasing security concerns, and constant

expansion in high-speed trains in a lot of countries are some of the challenge ahead of the

industry.

The information consists of two segment: Cargo and Passenger for 4 regions; thus, it

track 8 segment This details provides 5 year tendency and forecast study with

development opportunity in the 4 regions.

TURKISH AVIATION OVERVIEW

Since 1983 Turkish civil aviation sector has progress at a rapid pace. Privatization,

attached with globalization and economic development in Turkey, have direct to a

considerable growth in country’s aviation sector.

In end of 2009, the total flight traffic in Turkey was more than 1.1 mn (millions) and total

passenger traffic was 85.5 mn (million). This translate into compound annual growth rate

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(CAGR) of 10.94percent for flight traffic and 14.16percent for passenger traffic over the

last 7 years.

Government own Turkish Airlines is still the top carrier in Turkish skies with a market

share of 64percent of both domestic and international traffic.

Other players in the sector contain Pegasus, Sun Express, Onur Air and Atlasjet. Ministry

of Transportation manage the air transport sector through the Directorate General of Civil

Aviation {DGCA} and Directorate General of State Airports Administration {DHMI}.

Aviation’s economic footprint

Contribution to Turkish GDP

The aviation sector contributes TL 10.4 billion (1.1%) to Turkish GDP. This total

comprises:

TL 4.9 billion directly contributed through the output of the aviation sector (airlines,

airports and ground services);

TL 3.7 billion indirectly contributed through the aviation sector’s supply chain; and

TL 1.7 billion contributed through the spending by the employees of the aviation

sector and its supply chain.

In addition there are TL 31.6 billion in ‘catalytic’ benefits through tourism.

Major employer

The aviation sector supports 204,000 jobs in Turkey. This total comprises:

83,000 jobs indirectly supported through the aviation sector’s supply chain; and

38,000 jobs supported through the spending by the employees of the aviation sector

and its supply chain.

In addition there are a further 566,000 people employed through the catalytic

(tourism) effects of aviation.

Indian Aviation Industry Evolution

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Exhibit 1: Industry Evolution

Year

Major Milestones

1953 Nine Airlines existed including Indian Airlines & Air

India

1953 Nationalization of all private airlines through Air

Corporations Act;

1986 Private players permitted to operate as air taxi

operators

1994 Air Corporation act repealed; Private players can

operate schedule services

1995 Jet, Sahara, Modiluft, Damania, East West granted

scheduled carrier status

1997 4 out of 6 operators shut down; Jet & Sahara continue

2001 Aviation Turbine Fuel (ATF) prices decontrolled

2003 Air Deccan starts operations as India’s first LCC

2005 Kingfisher, SpiceJet, Indigo, Go Air, Paramount start

operations

2007 Industry consolidates; Jet acquired Sahara; Kingfisher

acquired Air Deccan

2010 SpiceJet starts international operations

2011 Indigo starts international operations, Kingfisher exits

LCC segment

2012 Government allows direct ATF imports, FDI proposal

for allowing foreign carriers to pick up to 49% stake

under consideration

Introduction of aviation in India

India is the 9th chief aviation market in the world, as per the RNCOS research report,

titled "Indian Aerospace Industry Analysis". It is anticipated that the civil aviation market

will recorded supplementary than 16 % compound annual growth rate (CAGR) during

2010-2013 on back of strong market essentials.

The rapidly growing aviation sector in India handle about 2.5 bn passenger all the world

in a year, moves 45mn( million) tonnes (MT) of cargo through 920 airlines, using 4,200

airports and deploying 27,000 aircraft. Currently, 87 foreign airlines fly to and from India

and 5 Indian carriers fly to and fro from 40 countries. India is expected to be amongst the

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top 5 nations in the world in the subsequently 10 yrs. An competent civil aviation sector

is important for India as it is inter-linked with other sector in the economy and produce

employment and income during global trade and tourism, as per a National Council of

Applied Economic Research (NCAER) study titled “Emirates in India - Assessment of

Regional profit and Economic Impact.”

Current Developments

India released its 1st ever complete Aviation Carbon Footprint study for the year 2011;

on October 9; 2012, which states that carbon dioxide {CO2} secretion from Indian

scheduled airline operations plus from foreign airlines to international destinations

signify less than 1 percent of the country's total CO2 emission, which is significantly

lower than the global avg contribution of airlines.

A 10-member delegation led by Mr S R Rao; Commerce Secretary at Ministry of

Commerce and Industry, the Government of India, will visit Pakistan for 2 days. The visit

aims at boosting trade relations growing air connectivity and starting trade in petroleum

product. Two-way trade between Pakistan and India is estimated to boost to 6 bn US$ by

2013-14.

Government Initiatives

In a key step aimed to improve the Indian civil aviation sector; the Cabinet Committee of

Economic Affairs (CCEA) has relaxed the FDI norms in aviation; which will allow

foreign aviation companies to spend in Indian aviation companies. The foreign carriers

can now pick up to 49 percent stake in domestic Indian aviation firms.

The twelfth Five Year Plan from 2012 to 2017 estimate the domestic and international

cargo to raise at the rate of 12 percent and 10percent; correspondingly; with the total

traffic projected to touch 5.9 mn(million) tonne (MT) by 2020. The Government has

planned to invest 30 bn US$in next 10 ys, as per Mr S N A Zaidi; a Secretary of Civil

Aviation.

The Government has taken different steps towards structural policy reform and has come

out with new policies which are liberal and will push public and private partnerships

(PPP).

The Government of India allows 100 % foreign direct investment (FDI) for green

field airports; via the automatic route. Moreover; foreign investment up to 74 % is

permissible through direct approvals while special permissions are required for 100 %

investment.

About 49 % FDI is allowed for investment in domestic scheduled passenger airlines

and investment up to 100 % by non-resident Indians (NRI) via the automatic route.

FDI up to 74 % is allowed for non-scheduled and cargo airlines.

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The Indian aviation sector can be generally separated into the following key categories:

1. Scheduled air transport service includes international and domestic airlines.

2. Non-scheduled air transport service consists of air taxi operators and charter operators.

3. Air cargo service; which include air transportation of mail and cargo.

Market share of key players in the Indian aviation sector

Name of the players Market

Share

Kingfisher Airlines and Kingfisher Red (previously Air

Deccan)

28percent

Jet Airways and Jet Lite (previously Air Sahara) 25percent

Air India and Indian (previously Indian Airlines) 16percent

IndiGo 14percent

SpiceJet 12percent

GoAir 3percent

Paramount Airways 2percent

MDLR Airlines 0.004percent

Factor Inputs

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SWOT Analysis

PEST Analysis

Political Factors are Trade relations, Licensing

Economic factors are Recession, prosperity phase

Social Factors are Religions, Income factor and castes

Technological Factors are Usage of internet.

India-Turkey Relations: A Snapshot View

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Turkey India

GDP Total US$1.073 tn US$ 1.9 tn

GDP /Capita Income US$9,500 US$ 1,340

Population

73.6 mn

1.2 bn

main Trading Partners

EU (46.3percent), Iraq

(5.3percent),

Russia (4.1percent), USA

(3.4percent)

UAE (13.6percent), China

(12percent),

USA (10.1percent)

Bilateral Trade Volume: US$ 6.6 bn (Jan-Nov 2011)

India’s exports: petroleum products, aluminum, cars, mobile

handsets & clothing and apparel

Turkey’s exports: marble, textile, machinery, copper ores,

inorganic chemicals,

Investments

India’s investments in Turkey: railway construction,

hydrocarbons, pipelines & IT services

Turkey’s investments: tourism, textile products, construction

Current High level Visits

Prime Minister Erdogan in the

year 2008 President Gül in the year

2010

Vice President Ansari (2011)

Key Agreements

Bilateral Investment Promotion and Protection Agreement in the

year1998

(BIPA)

Avoidance of Double Taxation and the prevention of Fiscal

Evasion 1997 (DTAA)

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ECONOMIC & COMMERCIAL RELATION AMONG TURKEY

AND INDIA

Offered Agreements between Turkey and India

Agreement of Prevention of Double Taxation

Bilateral Agreement for Promotion and Protection of Investments

TURKEY’S IMPORTS TO INDIA

BY PRODUCT GROUP in 2010

Million US$

Mineral fuels, minerals oils and

product of their distillation

644,5

Organic chemicals 366,5

Cotton, cotton yarn and cotton textiles 271,6

Institutional Arrangements

Joint payment for Economic and Technical Cooperation

Joint Business Council

Joint Study Group for Free Trade Agreement possibility

Education and Culture

India offered 25 slots to Turkish students under Indian Technical

and

Economic Cooperation (ITEC)

MOU signed among Ankara University and JNU and Bogazici

University and Shantiniketan

Council for Cultural Relations

Defense

High level visits: Chairman of Chiefs of Staff Committee and Chief of

Army Staff Air Chief Marshall V. P. Naik (2011)

Chief of Naval Staff Admiral Nirmal Verma (2011)

Diaspora

Small groups of working professionals are found in each country.

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Man-made filament 232,7

Vehicle other than railway or

tramway rolling-stock, parts thereof

190,6

Plastic and articles thereof 183,0

Boilers, machinery and mechanical

appliances: parts thereof

157,6

Electrical machinery and equipment:

parts thereof

133,2

Man-made filament 128,6

Iron and steel 112,7

Tanning and dyeing extracts: fillers

and stoppings: inks

101,9

Knitted and crocheted goods and

articles thereof

98,4

Articles of stone, plaster, cement,

asbestos & mica

68,5

Carpets, mats matting and tapestries 54,1

Pharmaceutical products 49,4

TOTAL 3.490

India’s Import and Export Relation

Year (in US $ million) percentage Change(YoY)

India’s

Export

India’s

Import

Total Trade India’s

Export

India’s

Import

Total Trade

1998 276.3 73.3 349.6 -8.18 20.56 -3.35

1999 243 120.5 363.5 -12.05 64.39 3.98

2000 437.2 56 493.2 79.92 -53.53 35.68

2001 353.2 74.6 427.8 -19.21 33.21 -13.26

2002 564 69.5 633.5 59.68 -6.84 48.08

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2003 718.8 71.4 790.2 27.45 2.73 24.74

2004 1,043.40 136.2 1179.6 45.16 90.76 49.28

2006 1557.41 222.24 1779.72 2.21 1.17 19.10

2007 2299.52 347.21 2646.73 45.59 56.23 46.91

2008 2457.48 542.92 3000.40 6.87 56.37 13.36

2009 1890.63 411.19 2301.82 -23.07 -24.26 -23.28

2010 3409.82 606.84 4016.66 80.35 47.58 74.49

Action plan for India

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Ensuring collaboration between the Ministry of Civil Aviation, other related ministries,

regulators, and the industry.

Promoting other sectors that can support and benefit the aviation sector

Reducing sales tax on fuel. The long-term benefits in terms of higher economic activity

and employment generation would more than reimburse for the national loss of tax

revenue in the short run

Implementing recent policy decisions such as the 49percent Foreign Direct Investment

limit, and establish safeguards to prevent excessive and predatory ticket pricing

Establishing a world-class National Aviation University and promote private sector

investments in training academies to produce highly-skilled employees.

Export Policy of Turkey

What are types of Exports in Turkey?

Types of exports are as follows:

a) Exports having no special nature

b) Exports on registration

c) Exports on credit

d) Export by means of consignment

e) Exportation of imported goods

f) Exportation to free zones

g) Exports through leasing

h) Transit trade

i) Exports without returns

What is the Export Promotion System in Turkey?

Due to WTO regulations and Customs Union with the EU, Turkey now apply measures

indirectly assist exporters such as;

export finance and insurance,

promotion and marketing assistance.

Overall, Turkey has reshaped incentives provided to exporters, eliminate subsidies in order to

harmonize foreign trade policies and increased transparency of export subsidy programs.

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What is the current Import Regime?

The Import Regime of 2001 is transparent, explicit and easy to understand for the

importers. It is base on the structure of the the World Trade Organization (WTO) and the

Customs Union Agreement with European Union.

Customs duties contain rearranged according to product groups (industrial,

agricultural, processed agricultural, fish and fishery products) and country of origin of

the products in order to be more transparent and simple.

What documents are required for importing?

In order to be an importer, having a tax number is sufficient. For importation of

agricultural products and some specific items for public security, preservation of the

human, animal and plant health, the security of the environment and consumer rights,

additional papers may be required by relevant authorities.

What are the procedures to set up a business in Turkey?

Please take the following steps to establish a limited or joint stock company in Turkey.

First step:

Please submit the following papers to the General Directorate of Foreign Investments

1- For legal entities residing abroad,

Certificate of Activity (certified by the related Turkish Consulate or in accordance with

the provisions of the Abolition of the Requirement for Approval of Foreign Official

Documents Agreement)

Previous year Activity Report

2- For real persons residing abroad

Copy of passport

Detailed commercial and industrial environment and verifying documents

3- Letter of intent stating that each foreign partner will bring atleast 50,000 USD to Turkey

as company capital.

4- Draft articles of the company to be established.

5- Power of attorney given by shareholders to the person who will be the contact person in

course of the application procedure.

6- Application form prepared in accordance with the attached sample.

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Second Step,

For publishing the establishment of the company, kindly apply to the Ministry of Industry

and Trade

Third Step,

For endorsing permission certificate , apply the GDFI with the following documents:

1- Original of the permission certificate

2- Trade Registry Gazette in which the organization of the company is published

3- If the foreign exchanges brought as foreign capital is converted in to Turkish Liras,

Foreign Exchange Purchase Receipt and if they are kept in foreign exchange deposit

account, linked bank document should be submitted.

Time framework to obtain the following permits:

- Land use permits 1-15 days

- Planning permits 1-15 days

- Building permits 1-15 days

The cost of getting the above permits is negligible.

Employment opportunities

Today India Aviation Industry requires approximately 7,500-8,000 pilots and same digit or more

air cabin crew by 2010. Higher pay packages are awaiting pilots with a commercial pilot license

. An amateur pilot can begin his career with a salary of Rs 2.5-3 lakhs a month with a

professional airline. With the hasty increase in the amount of airlines, pilots are in great demand.

Aviation sector provide the following types of opportunities:

Commercial pilot

Co-pilot

Air cargo pilot

Expert cabin crew

Air traffic controller

Cabin safety instructor

In-flight managers

In-flight base managers

Cabin services instructor

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Cabin crew

Training instructor

Maintenance controllers

Licensed aircraft safeguarding engineering

Modernization of Airports

Airports Authority of India (AAI) manages the development and modernization of all 35

non-metro airports in the country simultaneously and work is due to be completed by the

year end of 2010.

Wholly owned subsidiary of AAI are being formed for betterment of these airports.

Reasons for Growth

Foreign Equity Allowed

Low Entry Barriers

Attraction of Foreign Shores

Rising income levels and Demographic profile

Untapped Potential of India’s tourism

Glamour of the Airlines

Government initiative driving this sector’s growth

Government’s collective investment on tourism and hospitality sector has risen at a

CAGR of 15.4 percent through 2005-11.

Ministry of Tourism set up a Hospitality improvement and Promotion Board to monitor

and facilitate hotel project clearances/approvals.

Government of India (GOI) continue its focus on airport infrastructure development as

part of the 11th Five Year Plan (2007-12).

Liberalisation and Open Sky Policy has led to increased traffic rights under bilateral

agreements with foreign countries.

percent FDI in aviation.

Tax exception for airport projects for a period of ten years.

Policy maintain and demand growth is increasing investment potential.

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Industry Recommendations

Reduce labor costs

All major carriers need to win significant concessions from their employees. Low labor outlays

would consist of a mix of reduced salary, more flexible work rules and trimmed profit including

pension.

Simplify flight operations

Low-cost carriers use just a few types of aircraft, a approach that cut training and maintenance

expenses. Larger airlines that fly internationally, to more distant destinations require diverse

fleets of large and small aircrafts. However, they can and should work toward streamlining the

types of planes they fly.

Offer more transparent pricing

The legacy carriers have long had an exotic, almost beyond your understanding pricing system.

However, these days, with the Internet allowing travelers to shop for the cheapest tickets

effortlessly, and low-cost airlines offering simple set prices, conventional carriers have to go

after suit or risk losing more and more passengers.

Get smart on fuel

With oil near $50 a barrel, airlines must be smarter about how they incorporate its price into their

expenses. Discount carriers such as Southwest hedge as much as 80% of their jet-fuel

expenditure. Basically, that means that they lock in prices on future fuel when the price drop.

Small wonder Southwest is one of the few success stories in the airline business.

Stop chasing market share

Airlines need to be savvier about capability. At the start of 2004, many designed to add more

flights amid signs of an enhanced economy. When it became clear that demand wasn't as strong

as initially predicted, most carriers still wouldn't economize from their plans for fear of losing

out if the market snapped back.

A new model for premium pricing

Most of the industry's improvement efforts have focused on whittling down costs. However,

increasing revenues also needs to be a main concern. After all, people are eager to pay more if

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they believe they're getting more value. Legacy carriers still offer assured advantages,

particularly to the business traveler including airport lounges and more comfortable seating.

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CHAPTER:5

CONCLUSION OF EACH INDUSTRY

GROUP:1

TEXTILE Industry:

Macro policy:

Turkey needs to diversify the foreign investment as capital inflows to Turkey.

To that aim, Turkey needs to establish tighter controls to address fiscal and

current account deficits, which would help lower inflation and stabilize the lira.

Finally, policies that encourage businesses to use more long-term equity capital

denominated in domestic currency should be implemented.

Social and political infrastructure:

Turkey needs to invest more aggressively to improve its social infrastructure to

deliver on the potential of its large and young population.

Policies that target quality of its education and access to higher education need to

be put in place.

At that time, the government needs to continue with constitutional reforms that

address civil liberties and judicial independence.

Factor conditions:

Turkey has to improve the technical and vocational education programs and

establish public-private partnerships in education to link curriculum of

universities with industry needs.

To grow on innovation and improve productivity, the government should

encourage combined R&D initiatives across all sectors and introduce incentives

such as tax deductions and loan guarantees for R&D related projects.

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Context for strategy and rivalry:

The government needs to create one-stop shops to streamline the procedures and

registration requirements for starting a business. Anti-corruption and good

governance initiatives should be bolstered to reduce costs of doing business in

Turkey.

Related and supporting industries:

Turkey needs to develop an integrated national cluster strategy that provides a

common vision and framework.

A national competitiveness planning agency should be established to coordinate

the implementation of the integrated national cluster strategy.

POLICY OPTIONS

This industry has played a very important role in generating employment opportunities

and generating export revenue.

However, the Textiles industry also is characterized by their low productivity and wages.

The Textiles industry will continue to play an important role in the near future as well.

Therefore, the public policy towards the Textiles industry in Turkey should pursue two

aims simultaneously:

To enhance competitiveness of textile producers in foreign markets through

improvements in productivity and specialization towards high value added

products and

To transform the structure of the economy by diversifying towards other sectors.

The first aim is based on the fact that the Turkish Textiles industry producers are in a

strong position against their competitors and have achieved to raise their market shares in

the last decade.

The industry could protect its competitive position in the future:

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By adopting new marketing strategies (Establishing new marketing channels,

developing their own brands, coupling their strategies with the EU and US

companies),

By specializing in niche markets and

By being innovative in generating and adapting new products (Technical textiles,

eco-textiles, etc.) and processes (non-woven fabric).

These strategies would be successful only if they are complemented with a supportive

technological and legal infrastructure.

Therefore, the public policy could aim at providing incentives for R&D activities,

encouraging the development of supplier industries and developing a system of standards

and accreditation.

The public policy should also aim at changing the structure of the industry.

The productivity of textile industry should certainly be increased, but this process needs

to be accompanied by the reallocation of resources towards more productive sectors of

the economy so that wages, per capita income and living standards could be improved in

the long run.

GROUP:2

STEEL Industry

From all the analysis done by us we have found following things:

India is 4th

largest producer of steel in the world.

According to our analysis on Indian steel that even though India is the 4th

largest producer of

steel. Indian steel companies cannot satisfy the domestic demand of steel in India.

The reasons behind the increasing demand of steel are:

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The initiative taken by Indian Government to grow the Infrastructure Sector. The

infrastructure sector in India is growing very well.

Along with that the Automobile products and the consumer durables are produced

largely in India.

All these industries require Steel as a main raw material for the production. All most 60%

of total steel produced are used by Infrastructure sector. 14% is used by automobile

industry. 10% is used by consumer durables.

According to one report India imports 3-5 mt. of steel from other countries. And because

of the growth of infrastructure and automobile industry, at the end of 2015 India will

require 50 mt. more steel than produced.

While turkey is also in the top ten steel producing countries. Since last few years the

production of the steel has been increased drastically.

Turkey was the second biggest producer of steel in Europe and 8th

biggest steel producer

in the world in 2012 with 34.1 mt. Turkey produced 7.9 mt. in the first 2 months of this

year which is 13.4% higher than the same period of last year.

While the production of steel has been grown drastically, the consumption of steel in

Turkey is lower. That means the steel produced in Turkey is much higher than consumed

by them.

That means Turkey has got huge amount of slack steel with them. Which is proved by the

figure shown above of the Turkey’s net export of steels.

When it comes to the quality of steel Turkey is among the top quality steel producing

companies along with Brazil, Netherland, U.S.A.

Turkey has got natural resources necessary to produce good quality steel. Along with that

with the use of methods such as BOF and EAF Turkey made it possible to produce a

good quality steel.

When the question arise regarding the price, our analysis suggest that the price of the

Turkish steel are lower than the price of the Indian Steel.

Because of certain reasons Indian steel companies are charging much higher prices than

other countries.

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Along with that both the country have got transportation facilities and ports near to

markets. So there won’t be any problem related to import and export.

Thus, we can conclude that there are golden chances for Indian companies to import steel

from Turkey and to start business with the Turkish Steel companies.

GROUP:3

PHARMA Industry:

• The pharmaceutical industry in Turkey is quite advanced and diverse, with high quality,

generic pharmaceutical products being manufactured as well as poor quality copies that

have not been appropriately tested in terms of bioequivalence and bioavailability. The

country faces a low level of drug consumption due to economic and cultural constraints

compared with Western countries. Governmental control and regulations are key issues

because the majority of drug purchases (70-80 percent) throughout the country are

currently reimbursable through public sector agencies such as the Pension Fund and the

Social Insurance Organization. • In addition, per capita drug consumption levels are

quite low compared with the Organization for Economic Co-operation and Development

and European Union countries. Major international players in the medical equipment and

pharmaceutical products sector have also been opening offices in Turkey to reap the

benefits of this rapidly evolving market.

• Turkey pharmaceutical industry has the growth potential as the extended lifespan , aging

population , socio economic changes around the world will increase the need for health

services in coming years.

• The awareness of patients about the contribution of innovative drugs to

public health is increasing, which increases the demand for new

treatment methods

• Effects of many chronic diseases have been brought under control by new drugs

and treatment methods developed so far

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• Turkey should increase its pharmaceutical export and decrease its imports. Turkey has a

major opportunity to become a key services and pharma products supplier for

neighboring regions with its geographical location.

•The E.U accession process will continue to be an important driver of economic reform in

turkey. The Turkish government has indicated that reform will continue, irrespective of

the speed with which progress is made on the accession process.

• The Turkish government and private sector interests are increasingly focussed on

developing economic and commercial linkages with the Asia-Pacific region.

• India also has good growth prospects. The Indian market is very open, and New

Zealandscores highly in international surveys measuring the ease of doing business

(consistently second in the World Bank’s ‘ease of doing business’ survey). With its well-

developed economic linkages in the Asia-Pacific region (underpinned by an expanding

network of free trade and economic partnership agreements) New Zealand can be a

stepping-off point for Turkish companies wishing to do business in the Asia-Pacific

region.

• INDIA-Turkey bilateral trade is under-developed. India exports a narrow range of goods

to Turkey. By comparison the range of Turkish exports to India is wider, and Turkish

exports have grown strongly in recent years.

• Realising the potential for increasing the economic linkages between Turkey and India

will require persistent efforts by the private sector in both countries. Turkey can be

perceived as a hard market for Indian companies to penetrate. Although Turkey’s

performance in the World Bank’s ‘ease of doing business' survey continues to improve,

its ranking of 57 in 2008 reflects the fact that local bureaucratic procedures are a

complication for those unfamiliar with the market. Combined with language barriers, this

would suggest that working with a well-qualified local partner may be the best approach

to developing and sustaining a market presence.

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• Strategic partnerships between India and Turkish companies (including marketing

alliances, and arrangements for manufacturing) would support growth in bilateral trade,

and trade with countries in surrounding regions.

GROUP:4

AUTOMOBILE Industry

Turkey is a growth oriented country & has a potential for the better growth in automobile

sector.

There are only two companies of India from the automobile sector in the Turkey. So

other Indian company have better opportunity for investment & business in Turkey due

to lesser competition.

Another key aspect is that Turkey’s manufacturers are exporting more to European

Union countries so if Indian companies will invest in the automobile sector then they

have the opportunity to export to Asian countries as well as European countries.

As Turkey has qualified labor force which leads to efficient production. Turkey’s large

domestic market is one of the best opportunities.

Low taxes and incentives makes Turkey eye-catching to foreign investors.

Turkey’s infrastructure facilities & centrally located geographic position is one of the

purposes for an investment.

Turkey wants political constancy to strengthen its economy & get enough interest of

foreign investors for better growth prospects.

Turkey almost invest 1/4th

of its income for growth & controlling inflation &

unemployment as well as preserving liquidity.

Turkey has high production sizes & a very high ratio of exports to production.

Domestic market is characterized by tremendous demand potential, low dispersion, and

favorable regulatory policies.

The automobile trade market in Turkey is immensely developed.

Turkish automobile industry has one of the prominent developing market in globally

170 | P a g e

Turkey has decent amount of foreign capital inflow as well as efficient domestic &

global market.

57% of domestic consumption comes from imports.

Around 70% of domestic production is exported primarily to European countries, &

today Turkey is Europe’s leading bus producer, 3rd

LCV producer, 6th‐largest truck

manufacturer, and 3rd largest truck market and 7th‐largest car manufacturer.

Turkey’s automotive industry exports to 170 nations which shows high global reputation.

Turkey is India's 40th major trading partner globally & the 40th largest investor in India.

Over 150 companies with Indian capital have registered businesses in Turkey in the form

of JVs, trade & representative offices. They include Polyplex, GMR Infra, TATA ,

M&M, Reliance, Ispat, Birla Group, Tractors & Farm Equipment , JI, Wipro ind and

Dabur ltd.

Export growth rates have been high for motorcycles & scooters.

However, mopeds have registered low or negative growth.

Turkish Auto- motive Manufacturers Association General Secretary, Ercan Tezer,

summarized the effects of the Customs Union agreement by saying that “focus shifted

to international markets & Turkey became an extraordinarily attractive option for

whoever wanted to produce for the European Markets.”

GROUP:5

MINING Industry:

The mining industry in Turkey is quite advanced and diverse, with high quality, generic

mining products being manufactured.

In addition, per capita mining consumption levels are quite low compared with the

Organization for Economic Co-operation and Development and European Union countries..

Turkey should increase its mining export and decrease its imports. Turkey has a major

opportunity to become a key services and mining products supplier for neighboring regions

with its geographical location.

171 | P a g e

The E.U accession process will continue to be an important driver of economic reform in

turkey. The Turkish government has indicated that reform will continue, irrespective of the

speed with which progress is made on the accession process.

The Turkish government and private sector interests are increasingly focussed on developing

economic and commercial linkages with the Asia-Pacific region.

India also has good growth prospects. The Indian market is very open, and New

Zealandscores highly in international surveys measuring the ease of doing business

(consistently second in the World Bank’s ‘ease of doing business’ survey). With its well-

developed economic linkages in the Asia-Pacific region (underpinned by an expanding

network of free trade and economic partnership agreements) New Zealand can be a

stepping-off point for Turkish companies wishing to do business in the Asia-Pacific region.

INDIA-Turkey bilateral trade is under-developed. India exports a narrow range of goods to

Turkey. By comparison the range of Turkish exports to India is wider, and Turkish exports

have grown strongly in recent years

Realising the potential for increasing the economic linkages between Turkey and India will

require persistent efforts by the private sector in both countries. Turkey can be perceived as

a hard market for Indian companies to penetrate. Although Turkey’s performance in the

World Bank’s ‘ease of doing business' survey continues to improve, its ranking of 57 in

2008 reflects the fact that local bureaucratic procedures are a complication for those

unfamiliar with the market. Combined with language barriers, this would suggest that

working with a well-qualified local partner may be the best approach to developing and

sustaining a market presence.

Strategic partnerships between India and Turkish companies (including marketing alliances,

and arrangements for manufacturing) would support growth in bilateral trade, and trade

with countries in surrounding regions.

GROUP:6

AGRICULTURE Industry:

Turkey is one of the largest agricultural producers of the world and agriculture

contributes 7.9 percent of the country’s economic activity. Despite the significant

declines in the share of agriculture in the economy, it is still an important buffer against

urban unemployment as it is the

largest employer and nearly 30 percent of the economically active population lives in

rural areas in Turkey.

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Due to external (EU Accession and WTO Reform Process) and internal (efficiency,

taxpayer and

consumer concerns) reasons, policy changes and updates have been occurred in Turkish

agriculture bringing forward food safety, environment and rural development and paying

more attention to improve registration and control system towards market orientation and

competitiveness. Current agricultural policies in Turkey aim at a better organisation,

sustainability and competitiveness through increasing production based on quality

considering sustainability principles to provide food security and safety, competitiveness

power of agriculture enterprises, income and quality of life in rural areas, strengthening

agricultural marketing infrastructure, and establishing and integration between agriculture

and industry. However, to reach these targets the sector needs to challenge with low

efficiency and quality in production, small size of enterprises with less developed

infrastructure, lack of well functioning mechanism for village-based investment,

difficulties to access to markets for small farmers, low education level and inadequate

public services in rural areas. One can see that the most important problems in Turkish

agriculture are structural and market related as a result of small size enterprises and lack

of strong and well functioning organisations among farmers. The policy tools and support

schemes have been determined to overcome these challenges and compile with EU

policies are direct income support, deficiency payments, livestock supports, rural

development supports, compensatory payments, and support for environmental protection

of agricultural lands.

Although the disadvantages regarding agriculture sector in Turkey such as high

proportion of small farms with highly fragmented structure which are strongly depended

on state subsidies, ongoing problems of livestock export to the EU countries, high cost of

agricultural mechanisation for small farms which prevent small-scale farms from

increasing their production efficiency, instability in feed prices and it negative effects to

livestock sector, pressure on the state to reduce agricultural subsidies, the country has an

important capacity and potential thanks to suitable ecological condition and climate for

agriculture, state support for investment in agriculture, export facilities, increased interest

in agriculture by foreign investors, increase in production efficiency through advanced

173 | P a g e

technologies, trade opportunities offered by strategic geographical position of the

country, new export possibilities by Turkey’s likely membership to EU, competitive

labour fees, increased demand for organic agriculture through increase in awareness of

health and food.

GROUP:7

SHIPPING Industry

Customs duty is exempted on vessels used in international commercial transportation

business.

Road and Railway are connected with ports so Infrastructure facilities available in

turkey.

Seafarer's tax is abolished to promote the private sector by the Turkish government.

The geographic location is fit for shipping industry because it situated western Asia

and beside the Europe so as a location wise it is middle on earth for trade.

Where such a ship carries passenger, live stock and goods is taxed at the rate of 7.5%

+12.5% corporate taxes where in turkey it is only 6% so if we look as a tax benefit it

is better than India.

Ship breaking yards promoted by the Turkish government by 8 years tax exemption.

The Government of turkey also promoting shipping sector and majorly building of

ship are more encouraged like tax saving and credit facility.

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GROUP:8

TOURISM Industry:

Turkey, a secular and democratic country, is passing through difficult times. Currently,

the country is suffering its worst economic crisis since the 1940s. The crisis began in

February 2001. However, despite high inflation and other hardships, its economy has

started showing strong signs of recovery after an agreement last year with the

International Monetary Fund. The agreement will provide Turkey with a total of $17

billion in the next three years, of which more than half has already been transferred. It

should be noted that Washington had been the key advocate of the IMF loans to help

Turkey overcome its financial crisis

However, impact of some unexpected externalities has sometimes hindered its further

development. Turkey’s geopolitical location has provided it many advantages, but also

caused numerous problems, such as living in a not- so- friendly neighbourhood or

standing on a major fault line. As previously stressed, the tourism sector suffered an

important slow down after the Gulf War of 1991 and a serious setback with the

earthquake of 1999. The effects of the terrorist attacks of September 11 have been felt all

over the world, including Turkey

Since a war against Iraq is getting closer and there is apparently no escape from it,

Turkey might start developing an “interim” tourism strategy that could be implemented at

least until the beginning of a new “era” in the region. The aim of this strategy more than

anything should include innovations to attract tourists to Turkey, despite an ongoing

conflict in a country bordering Turkey. Incentives could be offered to the international

tour operators. Prices could be reduced drastically. Advertisements could be placed on

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major media outlets. However, this is not an easy undertaking. To modify a strategy,

which has been painstakingly developed in the last two decades could be frustrating and

might not work. But thinking of alternatives could be better than inaction.

GROUP:9

TELECOMMUNICATION Industry:

Turkey needs to improve their pipelines which delivers the facility of Broadband so that

they can make their service better than they are giving.

To be a developed country they should develop their infrastructure in an even manner in

all the area of the turkey.

They should resolve the uncertainties regarding the regime of the regulator of the

telecommunication industry.

To get better opportunities they should increase their focuses on FDI.

They should remove hurdles for investment to the outsiders and should improve the

functioning of capital market and banking system.

Policies that target quality of its education and access to higher education need to be put

in place.

At that time, the government needs to continue with constitutional reforms that address

civil liberties and judicial independence.

GROUP:10

AVIATION Industry:

The global airlines industry experienced very high increase during the past 5 years and is

expected to achieve an estimated of 832.8 billion $ in 2020 with a CAGR of 3.7 percent

over the next 7 years (2013-2020).

Rising demand from promising economies, constant demand for new low-cost carrier,

deregulation and increasing middle class are factor motivating increase in markets like

Middle East and Asia.

As the study indicate the European market expansion is motivated by growth of air

transport in Eastern Europe and intracontinental travel inside the European Union.

176 | P a g e

Asian development is motivated by rising per capita GDP in promising economies such

as India ,China, and countries in the Middle East such as Saudi Arabia and UAE.

The airline industry in Turkey was first construct as a monopolistic market.The key and

the only company was the government-owned THY. This situation has changed in the EU

privatization and standardization process.

The airlines business is growing at 27 per cent per annum in India. During the year 2007,

domestic airline passenger traffic has shown a growth of 32.51 per cent. Besides, India's

new international status as IT and manufacturing hub has led to the growth of

international air traffic.

Having achieved all their targets set for 2012, Turkish Airlines is now leaping forward

into the new year with a very positive outlook for the Indian marketplace. Mehmet Akay,

General Manager, Western & Southern India, Turkish Airlines said, “We are staking

money in India and that just proves how important the market is to us. 2012 has been a

very fruitful year for Turkish Airlines.

With the addition of planned new routes, Turkish Airlines will become the world’s

seventh biggest international network. Nineteen new aircraft (for which contracts had

previously been entered into) will be added to the fleet in 2012.

For2012, Turkish Airlines has set targets of 38 million passengers and TL 14.6 billion in

turnover. By becoming a member of Star Alliance, the world’s biggest and most

important airline alliance, Turkish Airlines took a major step forward in its strategy of

making Turkey the most important junction between Europe and Asia.

Passengers from all over the world make their connections conveniently by flying on

Turkish Airlines. Such undertakings are landmarks on Turkey’s long-term roadmap

which has been collectively dubbed the “2023 Strategic Vision”.They, and others like

them, boost Turkish Airlines towards its goal of being a

global giant.

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