IEA - Research Istanbul

Economic Security under Fragmentation Product-by-product IVI and SDI assessment of Germany’s import vulnerabilities and Türkiye’s friendly production role

In a world reshaped by geopolitical fragmentation, supply chains are becoming more fragile and economically strategic. The report shows that Germany’s trade-dependent economy faces growing vulnerabilities as import concentration rises — particularly in chemicals, electronics, pharmaceuticals, steel and next-generation automotive components. Using two analytical tools, the Import Vulnerability Index (IVI) and Substitution Difficulty Index (SDI), the study identifies four risk groups within Germany’s import basket and reveals that 18.8% of all products fall into the high-risk, difficult-to-replace category. Much of this exposure stems from China, which already supplies more than half of Germany’s most sensitive strategic goods. The assessment highlights the need for diversification, near-shoring, strategic stockpiling, new production capacity and targeted technological innovation to strengthen Germany’s supply resilience.

The report positions Türkiye as a scalable and strategically aligned production partner for Germany and Europe. With growing weight in Germany’s import portfolio since 2019 and increasing capacity in machinery, electronics, automotive and intermediate inputs, Türkiye offers proximity, industrial depth and compatible regulatory pathways for de-risking. The study outlines opportunities for friendly and diversified production in selected product lines where vulnerability is high and substitution is difficult, emphasizing Türkiye’s potential role in strengthening European supply security while maintaining economic openness. This framework opens a concrete discussion on new bilateral industrial cooperation, investment incentives and joint value-chain development — supporting a future-oriented partnership built on resilience, innovation and shared prosperity.

To read the report, click the link!