On 30 March, India approved 29 more proposals under its Electronics Components Manufacturing Scheme, covering flexible printed circuit boards, connectors, heat sinks, lithium-ion cells and rare-earth permanent magnets. Türkiye’s HIT-30 programme is pursuing many of the same industries, with support budgets of $5 billion for electric vehicles, $4.5 billion for batteries and $5 billion for semiconductors. This could become an expensive contest to persuade the same multinational groups to place an entire plant on one side rather than the other.
Türkiye and India should not divide ownership of whole factories. They should divide production. Automotive electronics, railway equipment, renewable-energy components, machinery parts and industrial software offer a more realistic agenda in which firms in both countries qualify for the same product, perform different stages of its manufacture and sell into more than one market. The partnership should share value chains, not compete for investment announcements.
The present economic relationship is nowhere near that level. Bilateral trade reached $7.495 billion in 2025, yet Türkiye’s main exports to India were still marble, sunflower oil, scrap steel, apples and basic chemicals, while imports included vehicle parts and smartphones. As of 2024, direct-investment stocks were only $144 million from Türkiye in India and $280 million in the opposite direction. More revealingly, the bilateral economic committee last met in 2014. This is ordinary trade, not an industrial relationship in which companies design, test and manufacture together.
The problem is not that either country supports manufacturing. It begins when final assembly becomes the only prize that counts. Global companies can compare incentive packages, secure tax relief, land or purchase guarantees, and still import the components where much of the technical knowledge resides. The 2025 Global Value Chain Development Report notes that multinationals increasingly arbitrage policy incentives across locations, raising the risk of wasteful subsidy races. A plant can create jobs while leaving the host government with an expensive shell around somebody else’s technology.
Türkiye already has around 1,100 automotive component suppliers, while more than 250 global suppliers use it as a production base; about three quarters of Turkish vehicle output was exported in 2025. Its machinery industry exported $28.7 billion that year. India brings a much larger domestic market, expanding electronics capacity and an automotive incentive programme designed to promote advanced components and deeper localisation. These assets are complementary only if cooperation is not reduced to one giant joint venture with one address.
Automotive electronics would be the most practical place to begin. An Indian supplier might produce a flexible circuit, sensor assembly or power-electronics board. A Turkish firm could provide tooling, housings, thermal-management parts or vehicle integration. Manufacturers operating in each country would test the same module against common quality and safety requirements. The division should come from cost, capability and buyer audits—not a diplomatic assumption that India “does software” and Türkiye “does metal”. Each side must own a difficult part of the process, and the component must be saleable beyond the bilateral market.
Railways offer another route without requiring either country to surrender its existing base. India already manufactures rolling stock and components ranging from traction motors and gearboxes to converters, cable harnesses and electronic cards; railway exports reached about $3.36 billion over the nine years to January 2026. Türkiye should not propose recreating that ecosystem. Its machinery, control-system and maintenance firms should be matched with specific gaps in Indian projects, while Indian suppliers are tested for Turkish rolling-stock and signalling contracts. Predictive-maintenance software, certified subassemblies and repair equipment make more sense than a politically branded “joint train factory”.
Renewable energy makes the risk of duplication clearer. India reported 172 GW of solar-module manufacturing capacity by March 2026. Türkiye is supporting solar cells, wind-turbine components and batteries through HIT-30. Building two protected supply chains for every technology may produce excess capacity in the same low-margin stages. Joint work should focus on components that can serve both markets—such as inverters, industrial controls, monitoring software, selected turbine parts or battery-management systems—while each government supports capabilities it considers genuinely critical.
This model is harder than signing a factory memorandum. Local-content conditions, tariffs, technical standards and intellectual-property concerns can all block cross-border sourcing. A pilot needs mutual recognition of agreed test results, duty-drawback treatment for inputs used in re-exported goods, clear ownership of jointly developed software and access to repair data. Public money should be released only after an anchor buyer issues a conditional purchase order. Otherwise, governments may subsidise machinery for a supplier that never receives a customer.
Ankara and New Delhi should reconvene their long-dormant economic committee with a narrow mandate: identify components for which one country has credible demand and the other has a supplier capable of qualifying within two years. Export-credit institutions could finance tooling, testing and working capital rather than complete plants. The scorecard should count jointly certified components, repeat orders, engineering work performed in each country and sales to third markets. “Investment announced” is the wrong measure; companies often revise such promises before production begins.
Final assembly still matters. It creates integration skills, logistics demand and visible employment. But not every sector can sustain two fully integrated national chains, and a flagship plant is not automatically a partnership. At the next bilateral economic meeting, Türkiye and India should select one automotive-electronics module and one rail or renewable-energy subsystem, name the buyers, divide the work and set a date for commercial qualification. The first convincing result would be reciprocal: a Turkish-made component entering an Indian production line and an Indian-made component entering a Turkish one. Until then, another “joint factory” announcement would be location competition presented as industrial cooperation.
