In the latest turn of events in the India-Pakistan tensions, Indian’s have been calling out Turkish goods, and after the country supported Pakistan over India after the Pahalgam terror attack. The country supported Pakistan over India after the Pahalgam terror attack and the Operation Sindoor, which has risen to the India-Pakistan conflict.
As of May 16, Celibi Aviation, which is a Turkish ground handling company, has been boycotted by India. This Turkish firm used to operate in nine airports across India, has now been removed from ground handling and cargo operations amid rising calls to boycott Turkish goods and tourism. Indo Thai has been appointed as the new ground handling operator to replace the Turkish firm on Saturday.
In response to this, the aviation giant has claimed that the move jeopardizes 3,791 jobs and undermines India’s commitment to fair business practices, raising deeper questions about regulatory transparency and investor protection. The Delhi High Court will hear two pleas by the Turkish firm, aviation giant, Celebi Airport Services India Pvt.Ltd against the aviation regulator. Justice Sachin Datta of the Delhi High Court will hear the plea, which was filed on May 16, 2025. The aviation regulator cited that the reason of in the “interest of national security” for barring the company by revoking its security clearance.
Background of the Company
Celebi started operations in India in 2008, starting with Mumbai, followed by Delhi in 2009. Çelebi has been operating in India for over a decade since 2008. The company manages ground handling operations at key airports, including Delhi and Mumbai. Çelebi Aviation Holding, founded in Turkey in 1958, quietly built a major foothold in India’s aviation market over the past decade. According to the company’s own history, it set up Indian subsidiaries in 2008–2010 (in Mumbai and Delhi). Its local units – notably Çelebi Airport Services India Pvt. Ltd (CASIPL) and two affiliated companies – provided ground handling and cargo services at nine key airports (including Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, Ahmedabad, Goa, Cochin and Kannur). In fiscal 2023–24 these Indian operations generated roughly ₹1,522 crore in revenue (about one-third of Çelebi’s global turnover) and employed around 3,800 people.
Its entry was hailed as a sign of India’s growing openness to foreign investment in aviation infrastructure. However, tensions began to form when India’s Directorate General of Civil Aviation (DGCA) withdrew its permit, citing “compliance issues”- without detailing the reasons. Çelebi, alleging arbitrary action, has sought redress through the India-Turkey Bilateral Investment Treaty (BIT).
The lawsuit has exposed a fragile intersection between national regulator and international investor rights. After India revised its BIT (Bilateral Treaty framework) in 2016 to limit arbitration exposure, foreign companies have found it harder to sue.
The aviation sector, reeling from pandemic losses and infrastructure bottlenecks, may see investor reluctance if perceived arbitrariness becomes a pattern. Turkey already has a complex relationship with India geopolitically, could see this escalate to a diplomatic irritant.
Analysts note India accounted for over $195 million of Çelebi’s $585 million global revenue before the current clashes. Celebi had invested heavily in the order of $200-250 million in ground handling infrastructure in India. Its services became an integral part of operations at top airports.
Legal and Treaty Framework
The legal battle turns on the interplay between India’s security prerogatives and foreign investment protections. Domestically, India places civil aviation security decisions beyond judicial review except in narrow cases. Internationally, Çelebi could potentially seek damages as a foreign investor under investment law. India and Turkey had a bilateral investment treaty (BIT) dating from 1998, which in principle allowed investors from either country to seek arbitration for treaty violations. However, India has terminated most of its older BITs in recent years as part of a major treaty overhaul. In fact, India has rescinded over 70 BITs since 2016, and the India–Turkey BIT is believed to have been among those abrogated. Moreover, India is not a signatory to the ICSID Convention (the World Bank’s main investor–state arbitration forum).
As a result, any claim would likely have to proceed under alternate mechanisms – for example UNCITRAL arbitration rules or ICSID’s “Additional Facility” (which can apply when one party is not an ICSID member). Under typical BIT clauses, investors may usually choose domestic courts or international arbitration. Although details are complex, investment-law specialists note that India’s newer model treaties (circa 2016) aim to preserve regulatory discretion in areas like security while still offering protections. In practice, an arbitration demand by Çelebi (if it occurs) could hinge on showing that India breached fairness or compensation guarantees in earlier agreements or general international law, a potentially lengthy process.
Implications for Investor Confidence and FDI
Market watchers are watching this case as a signal for India’s investment climate. Çelebi itself warned that its sudden exclusion would harm “investor confidence”. Some analysts in India’s financial press noted that even a court victory might not restore Çelebi’s lost contracts or public trust. More broadly, foreign direct investment (FDI) experts say predictability of the regime is key. India remains a major destination for capital (ranked the world’s 8th largest FDI recipient in 2023), but investors often voice concern over policy shifts and the opaque use of security arguments. This incident underscores those anxieties. If foreign firms feel that contracts can be suspended abruptly for political reasons, they may factor that into their risk assessments.
In the aviation sector, the impact is immediate: airlines and airports must find new ground handlers, and some worry about cost or capacity disruptions. India has been liberalizing aviation FDI (raising foreign equity limits in carriers), but security clearance by BCAS is always required for sensitive roles. Some domestic handlers could benefit from Çelebi’s exit (for example, Delhi Airport promoted local firms AISATS and Bird Group immediately after the ban). Yet, the signal of politicized intervention may concern companies considering investment in airport services or other critical areas.
Looking Ahead
The Delhi High Court’s decision will be closely watched. If the court upholds Çelebi’s appeal, India’s government may need to clarify how it balances security and fairness to investors. If the court upholds the ban, Çelebi may explore international arbitration and its remedies, although enforcement against India is historically difficult. Either outcome will be read as a test of India’s investment friendliness.
India still touts its openness to global capital in sectors like aviation, but the Çelebi case could prompt tighter vetting of foreign participants. Keep Reading Questiqa India for more news.
