In less than four decades, the Republic of Korea (ROK) has progressed remarkably. It has emerged as a strong export economy. Its GDP has crossed $1 trillion, from a mere $2.3 billion in 1962, and the economy is the 11th largest economy in the world. Its per capita income in 2016 was $27,561. Services, manufacturing and agriculture account for 54.1%, 26.3% and 2.1% of its GDP respectively.
The trade and economic relations between India and South Korea have gathered momentum in recent years, with bilateral trade reaching $16.83 billion in 2017. Korean companies such as Hyundai Motors, Samsung Electronics, LG, and others have invested around $ 4.43 billion till March 2017 and have plans to expand further. Indian FDI led by Mahindra & Mahindra (Ssangyong Motors), Aditya Birla Group (Novelis Ltd.) & TATA (Tata Daewoo commercial vehicles) is inching close to $3 billion. Hyundai Motors has set up an automotive plant in Tamil Nadu with a capacity to produce more than 650,000 cars annually. Kia Motors, a sister company in the Hyundai Group, announced an investment of $1.1 billion to set up a manufacturing unit in Andhra Pradesh. The unit will have a capacity to produce 300,000 cars and production is expected to start in 2019. Samsung Electronics has two factories – one each in Noida and Sriperumbudur (TN), and five research centres. Samsung announced a $760 million investment to expand its Noida facility for manufacturing smartphones and consumer electronics. LG Electronics operates two factories in India, one each in Noida and Pune, with a research centre in Bangalore. LG Group, in a partnership with the Vedanta Group, is set to build India’s first LCD manufacturing unit in Maharashtra.
India’s relations with South Korea have strengthened following Prime Minister Narendra Modi’s South Korean visit in 2015. India and South Korea have agreed to work together in the fields of energy, electronics, and shipbuilding. The authorities have decided to set up a Joint Working Group for Cooperation on the shipbuilding sector and another in the field of electronics hardware manufacturing. According to the South Korean bank, India’s share in South Korea’s global trade was 1.75% in 2016. India’s contribution in South Korea’s global imports increased from 0.78% in 2001 to 1.03% in 2015. India was South Korea’s 14th biggest source for imports in 2016 and its 6th biggest export market. Korea’s trade surplus increased from $1.98 billion in 2007 to about $7.4 billion in 2016.
There has been growing interest regarding business prospects with South Korea among Indian states. In 2016-17, official and business delegations from various states visited the Republic of Korea. In April 2017, an Indian delegation visited South Korea for a textiles roadshow in Daegu and Seoul. As a result, over 60 South Korean textile companies led by the Chairman of Korea Federation of Textiles Industries (KOFOTI) participated in the government’s ‘Textiles India 2017’ at Gandhinagar, Gujarat. India and Korea have deepened their cooperation through technology transfer, joint ventures, business alliances and facilitation of mutual market access. Korea Trade-Investment Promotion Agency (KOTRA), formed in 1962 has been mounting trade missions to India and is also supporting business delegations from India to Republic of Korea. Korean Chambers such as KOTRA and Korean Chamber of Commerce & Industry (KCCI) have established institutional linkages with Indian business chambers.
KOTRA invests in Kolkata
South Korea has shown a keen interest in West Bengal. Tai Sik Lee, Senior Executive Vice President, KOTRA recently visited the city to inaugurate a KOTRA office. He stated, “Opening up a KOTRA office in Kolkata had been a strategic choice of the Korean government. India is one of the foremost economies of the world and eastern India holds great promise. We are confident that KOTRA along with local governments in eastern and north eastern India will strengthen India-Korea Special Strategic Partnership.”
Korean companies are looking to invest in the areas of electronics, food processing and mining and machinery in West Bengal. “KOTRA can be an enabler in promoting Korean companies with strong R&D skills to help, assist and transfer their knowledge and skills to Indian companies for co-developing a product. KOTRA in India plays a crucial role to support trade and investment activities between India and Korea”, informed Kyun-hanKim, Minister-Counsellor, Embassy of the Republic of Korea.
The Kolkata office is KOTRA’s fifth office in India after New Delhi, Mumbai, Chennai and Bangalore and would facilitate business opportunities across the eastern states. Some of the companies that have apparently expressed their desire to expand operations to West Bengal are Kia Motors, Hyundai,