Business Diplomacy: Historical Context, Evolution, and Contemporary Relevance – A Deep Dive into India and Türkiye

In the intricate web of global affairs, diplomacy has traditionally been the realm of sovereign states, with ambassadors, consuls, and envoys at the forefront, ensuring peaceful coexistence and forging alliances. However, the rise of globalization and the emergence of multinational corporations (MNCs) as dominant economic entities have reshaped this landscape, giving birth to the concept of business diplomacy.

The Traditional Landscape of Diplomacy

Historically, diplomacy was the exclusive domain of sovereign states. Rooted in ancient civilizations, from the Greeks sending envoys to neighboring city-states to the elaborate emissary networks of the Chinese dynasties, diplomacy was the art and practice of conducting negotiations between representatives of states. It was primarily concerned with issues like war and peace, treaties, alliances, and territorial disputes. Ambassadors, consuls, and envoys were the key players, representing their home country’s interests abroad, ensuring peaceful coexistence, and forging alliances.

The Rise of Multinational Corporations

The 20th century witnessed an unprecedented surge in globalization. Technological advancements, especially in transportation and communication, coupled with liberal economic policies, led to the rapid expansion of international trade and investment. This era saw the rise of multinational corporations (MNCs) – companies that operated in multiple countries, often with revenues surpassing the GDPs of many nations. These corporations began to influence not just global commerce but also the socio-political dynamics of the countries they operated in.

Shifting Dynamics: Corporations as Non-State Actors

As MNCs grew in stature, their influence began to permeate the traditional realm of state-centric diplomacy. They became crucial non-state actors in international relations. Companies like Coca-Cola, IBM, and Nestlé were no longer just profit-driven entities; they were influential players shaping global policies, from trade and investment to environmental standards and labor rights.

For instance, oil companies like ExxonMobil and Shell, with their vast global operations, often had to navigate complex geopolitical landscapes, from territorial disputes in the South China Sea to the politics of the Middle East. Their operations and investments often had implications for regional stability and international relations.

The Advent of Formal Business Diplomacy

Recognizing the need for a more structured approach to their international engagements, many MNCs began to establish dedicated departments for diplomatic engagement. These departments, often termed as “global affairs” or “international relations” units, were tasked with understanding the geopolitical landscape, building relationships with foreign governments and international institutions, and ensuring that the company’s interests were aligned with broader global goals.

These units were not just about lobbying for favorable policies; they were about building long-term, sustainable relationships. They engaged in cultural diplomacy, sponsored global events, partnered with international NGOs, and even played roles in conflict resolution in areas where they operated.

The Interplay of Business and Traditional Diplomacy

Today, the lines between traditional state diplomacy and business diplomacy are increasingly blurred. Governments often collaborate with MNCs to promote national interests. For instance, state visits by world leaders are often accompanied by business delegations, highlighting the symbiotic relationship between diplomatic and economic engagements.

Furthermore, international institutions like the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) regularly engage with MNCs, recognizing their role in shaping global economic policies.

India & Türkiye: Pioneers in Business Diplomacy

Two nations, India and Türkiye, stand out as exemplary models in the domain of business diplomacy. Their rich historical tapestries, combined with their strategic geopolitical locations, have positioned them as significant players in the global arena. Both countries have harnessed their unique strengths, cultural heritage, and economic potential to forge influential paths in business diplomacy.

A Stellar Example of Achievement: DEİK! Türkiye’s “Foreign Economic Relations Board” DEİK serves as a prime example of successful business diplomacy, bridging the gap between the Turkish government and the private sector. This unique position allows DEIK to align business interests with Türkiye’s national objectives. Through its extensive Business Councils worldwide, DEIK strengthens bilateral economic relations, addressing challenges and fostering international dialogue via its numerous events and forums.

Furthermore, DEIK actively champions Turkish businesses on the global stage, tackling trade barriers and promoting industries. It provides invaluable insights into global markets and trade regulations, aiding Turkish businesses in their international ventures. By collaborating with various institutions and offering capacity-building training, DEIK ensures businesses are well-equipped to navigate global challenges, solidifying Türkiye’s position in the global economic landscape.

India’s IT Diplomacy: India’s rise as an IT powerhouse has positioned it as a global leader in the tech industry. Companies like Infosys, Wipro, and TCS have not only showcased India’s technological prowess but have also fostered deep ties with countries across the world. Their global delivery models, which involve setting up development centers in multiple countries, have facilitated cultural exchange, job creation, and technological advancement.

Bosphorus Strait’s Trade Diplomacy: Türkiye’s control over this vital maritime passage has been a significant tool in its trade diplomacy.

Bollywood’s Soft Power: India’s film industry, popularly known as Bollywood, has a massive global following. This cultural export has opened doors for deeper diplomatic and trade ties, especially in regions where traditional diplomacy had limited reach. The allure of Indian cinema, music, and dance has been instrumental in promoting India’s soft power globally.

Turkish Airlines – Bridging Continents: Turkish Airlines, with its extensive network, has played a pivotal role in connecting Türkiye to the world. The airline’s growth strategy has been intertwined with Türkiye’s diplomatic outreach, especially in Africa and Asia.

India’s Yoga and Ayurveda Diplomacy: The global popularity of Yoga and Ayurveda, ancient Indian practices, has been leveraged by the Indian government to foster cultural ties and promote wellness tourism.

Türkiye’s Construction Diplomacy: Turkish construction firms, known for their expertise and timely delivery, have undertaken significant projects from Africa to the Middle East. These infrastructural projects have not only earned revenue but have also positioned Türkiye as a reliable partner in development.

Adani Group: With interests in ports, logistics, agribusiness, and power generation, the group is involved in several international ventures.

Türkiye’s Culinary Diplomacy: Turkish cuisine, known for its rich flavors and diverse offerings, has been a hit worldwide. Food festivals, culinary tours, and Turkish restaurants worldwide have played a role in promoting Türkiye’s culture and heritage.

Tata Group’s Global Footprint: Tata Group’s acquisitions, like Jaguar Land Rover and Tetley Tea, highlight the role of business diplomacy in global expansions.

Türkiye’s Automotive Diplomacy in Europe: Brands like TOFAŞ have solidified ties with European markets through Türkiye’s diplomatic efforts.

India’s Pharmaceutical Diplomacy: India’s provision of affordable medicines and vaccines to countries, especially in Africa and Asia, has enhanced its diplomatic stature.

Anadolu Group in Central Asia: The Anadolu Group’s investments in Central Asia epitomize Türkiye’s strategy to strengthen ties with Turkic-speaking countries.

Reliance Jio’s Digital Revolution: Collaborations with tech giants like Facebook and Google emphasize the significance of business diplomacy in strategic partnerships.

Türkiye’s Renewable Energy Diplomacy: Partnerships with countries like Germany and China have propelled Türkiye’s green energy initiatives.

Mahindra Group’s Global Expansion: Mahindra’s acquisitions, like SsangYong and Peugeot Motorcycles, underscore the role of business diplomacy in cross-border M&A activities.

Doğuş Group in Europe: Doğuş Group’s investments in luxury marinas and real estate across Europe showcase how business ventures can foster diplomatic relations.

The Road Ahead for Business Diplomacy

The future of business diplomacy looks promising but is not without challenges. As corporations expand their global footprint, they will need to be more attuned to local sensibilities, regulatory frameworks, and geopolitical shifts. They will also need to work closely with governments to ensure that their business interests align with national and global goals, especially in areas like sustainability, human rights, and equitable growth.

Moreover, with the rise of digital platforms and technologies, digital diplomacy will play a significant role. Companies will need to leverage social media, digital communication tools, and online platforms to engage with stakeholders, from customers to policymakers.

In conclusion, business diplomacy, at its core, is about building bridges. It’s about understanding and respecting differences while finding common ground. As the world becomes more interconnected and interdependent, the role of business diplomacy in fostering global cooperation, mutual respect, and shared prosperity will only grow in significance.

Mumbai Consul General, Cüneyt YAVUZCAN