Reinforcing the alignment between India’s ‘Act East’ and South Korea’s ‘New Southern Policy’, Prime Minister Narendra Modi and President Moon Jae-in further bolstered the India-South Korea bilateral ‘Special Strategic Partnership’ during President Moon’s four day state visit to India. South Korea has been an indispensable developmental partner in India’s flagship initiatives including ‘Make in India’, ‘Skill India’, ‘Digital India’, ‘Start-up India’ and ‘Smart Cities’ and has offered US $ 10 billion financing by way of development assistance and concessional credit for infrastructure projects during the Indian Prime Minister’s visit to Seoul in May 2015. Both countries are exploring infrastructure projects through Korea’s Economic Development Cooperation Fund and Export Credit.
South Korea’s manufacturing strengths have buttressed the flagship ‘Make in India’ initiative. During President Moon’s visit, Samsung’s manufacturing plant with an expanded annual capacity of producing 120 million mobile phones by the year 2020 was jointly inaugurated by the two leaders. This will not only produce a few thousand jobs but also export phones to the global market. Earlier in 2017, Kia Motors entered into a MoU for building a mega automobile manufacturing unit in Andhra Pradesh. Additionally, during the South Korean President’s visit, several MoUs were signed focussing on trade remedies especially anti-dumping and subsidy; pursuing cutting edge technologies of fourth industrial revolution for commercialization with emphasis on Internet of Things, Artificial Intelligence and Big Data; advancing state-of-the-art telecommunication services; scientific research on inexpensive water purification technologies, intelligent transport systems; areas of urban infrastructure, start-up ecosystem, skill training and renewable energy; railways with plans for joint research projects and instituting an advanced R&D facility; nurturing international competitiveness of Micro, Small and Medium Enterprises (MSME).
South Korea’s niche is shipbuilding, semiconductors, automobile and electronics has created an export-driven economy and India presents an expanding market. There is increasing synergy between India’s competence in IT software and South Korea’s IT hardware, designing, engineering and manufacturing. Nevertheless, if India aims to enter the Korean import market, it is critical for India to diversify mostly focusing on high-tech products alongside primary goods. While bilateral trade in 2017 amounted to US $ 20 billion, Korean cumulative FDI to India stood at US $ 6.8 billion. Both sides have been negotiating to upgrade the Comprehensive Economic Partnership Agreement (CEPA) to enhance bilateral trade. A Joint Statement on Early Harvest Package of the Upgraded CEPA was signed identifying key areas for trade liberalization including shrimp, molluscs and processed fish. The India-Republic of Korea CEO’s Forum led to the institution of six working groups in various sectors including auto, infrastructure, services, electronics, IT and start ups and innovation ecosystem including MSMEs & SMEs and defence manufacturing.
Pushing the ‘Special Strategic Partnership’, both leaders stressed on intensifying defence industry cooperation. Earlier in 2017, the two sides had signed an inter-governmental MoU on ‘Defence Industry Co-operation in Shipbuilding’.
At the regional level, India-South Korea relations is founded on the pillars of shared universal values of democracy, free market economy, rule of law, common commitment to a peaceful, stable, secure, open and rules-based order. Aimed at contributing to regional peace and stability, New Delhi and Seoul decided to explore tripartite development cooperation in third countries starting with capacity building in Afghanistan. Furthermore, underscoring the proliferation linkage between North-east Asia and South Asia, India and South Korea vowed to cooperate on preventing proliferation of weapons of mass destruction and delivery systems, particularly to terrorists and non-state actors. Supporting complete denuclearisation and lasting peace in the Korean Peninsula, India welcomed the recent developments in the Peninsula including the Inter-Korea Summits and the historic US-North Korea Summit in Singapore last month. Reinforcing India’s historical role in the Korean War in the past and currently expanding role as a “stakeholder” in the Korean peace process, Mr. Modi and Mr. Moon agreed to add further depth to the strategic partnership aimed at securing peace and stability in the larger Indo-Pacific.
Script: Dr.Titli Basu, Strategic Analyst on East & South East Asia