The virtual rejection of Erdogan's suggestion came in the course of his discussion with Prime Minister Narendra Modi, during which the two countries held that "no intent or goal or reason or rationale can validate terrorism" and decided to work together to deepen cooperation, both bilaterally and multilaterally, to effectively counter this menace.
Erdogan also assured India of his country's full support in the fight against terrorism as he held "extensive" discussion on this evolving threat with Modi, who described it as a "shared worry".
Erdogan had said, "We should not allow more casualties to occur (in Kashmir). By having a multilateral dialogue, (in which) we can be involved, we can seek ways to settle the issue once and for all."
The remarks were not well received here as they were contrary to the position of India, which maintains that the Kashmir issue is a bilateral matter between it and Pakistan, and that there is no scope for a third party mediation.
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"We told them that we have been victims of cross-border terrorism and and state-sponsored terrorism for 40 years. As far as Kashmir issue is concerned, we have always been ready to resolve it with Pakistan. Not only Kashmir but also all other bilateral issues should be resolved in a peaceful manner," Baglay said.
Asked about the response of the Turkish side, Baglay said they heard it "care and attention".
India's discussion on Kashmir with Turkey came on a day when two Indian security personnel were beheaded by Pakistan army in Jammu and Kashmir.
Earlier, addressing a joint media event with Erdogan, Modi said countries across the world need to "work as one to disrupt the terrorist networks and their financing and put a stop to cross-border movement of terrorists", in an obvious reference to Pakistan-based terror groups.
Condemning the Naxal attack on CRPF personnel on April 24 in Sukma, in which 25 of them were killed, Erdogan said, "Turkey will always be by the side of India in full solidarity while battling terrorism... And terrorists will be drowned in the blood they shed."
Asked if there was a difference of opinion on the definition of terrorism as Modi talked about cross-border terrorists and Erdogan mentioned the Fethullah Gulen Terrorist Organisation (FETO), Baglay said there was a convergence on condemning terrorism and an agreement that it was a menace which needed to be tackled effectively.
During his statement, the Turkish president had referred to the FETO, saying the outfit is active in 170 countries. He said the Turkish government has informed the countries about FETO's operations and hoped India will take action against it.
After a failed coup in July last year to topple Erdogan, Turkey had blamed the FETO for it and said the outfit has "infiltrated" India. Turkey had also asked India to take action against the organisation.
Modi and the Turkish leader had a comprehensive discussion and took stock of full range of bilateral relations, including political and economic, the external affairs ministry said.
Referring to changing times where societies face new threats and challenges every day, Modi said the context and contours of some of the exiting and emerging security challenges globally are "our common concern".
"In particular, the constantly evolving threat from terrorism is our shared worry. I held an extensive conversion with the Turkish president on this subject. We agreed that no intent or goal or reason or rationale can validate terrorism," the prime minister said.
Observing that India and Turkey are two large economies which present an enormous opportunity to expand and deepen commercial linkages, Modi said at the level of the two governments, there is a need to approach the entire landscape of business opportunities in a strategic and long-term manner.
"Our bilateral trade turnover of around 6 billion dollars does not do full justice to convergences in our economies. Clearly, the business and industry on both sides can do much more," he added.
Erdogan also emphasised the need to increase bilateral trade to at least USD 10 billion, as soon as possible, and added that the countries will look at ways to expand cooperation in the energy and infrastructure sectors, in particular.
After the Modi-Erdogan meet, the two sides exchanged three pacts, including one between their telecom authorities.
In his media statement, Modi also referred to Rumi and Sufi tradition in India. "While Rumi found his home in Turkey, his legacy continues to enrich the Sufi traditions of India as well," he said.
Turkey has been maintaining that the NSG should come out with a system to consider the entry of countries which are not signatory to the Nuclear Non-Proliferation Treaty (NPT). It has also supported Pakistan's case for NSG membership.
There was also convergence on United Nations Security Councilreforms during the meeting of the two leaders, Baglay said.
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