In South Korea’s foreign policy India has risen in recent years. South Korean President Moon Jae-in’s “New Southern Policy” attached primacy to strengthen the country’s economic as well as strategic relations with India, and Southeast Asia. It was the first time that South Korea has officially documented the foreign policy initiatives for India. To upgrade the engagement with India, the South Korean government has also set up a state-run research centre in India and the ASEAN countries under the Korea National Diplomatic Academy (KNDA), to lay down the foundation for the Moon administration’s policy vision of diversifying its strategic partnerships across Asia.
India has always proven to be as the land of opportunities for the Korean company is because of the following reasons :
1) Relatively Cheap Labour Cost In Comparison To Other Countries
By International standards, the real wages even of the highly skilled workers in India are relatively lower. Due to its lower wage structure and access to a vast labour market, India offers competitive advantages over other countries.
The crucial aspects for foreign companies to make new investments opportunities that offers potential are
• the magnitude of wage cost
• determinants of wage inflation,
• the short and medium term for future trends in wage inflation of the country.
Labour costs may also vary by region in India; due to lower costs of living and affordable real estate depending upon the lifestyle of the particular region.
In the manufacturing sector, the federal Make in India, South Korea has shown its willingness to partner with India’s flagship initiatives such as ‘Make in India’, ‘Skill India’, ‘Digital India’, ‘Start-up India’ and ‘Smart Cities Mission’ initiative anticipates expanding both industrial investments and domestic operations, which will boost the creation of technical jobs.
2) A Good Trading Partner
Prime Minister Narendra Modi launched an India-Korea Startup Hub” with a motive to provide a platform for South Koreans and Indians to “freely communicate” on. India is now among the top 10 trading partners of South Korea and the six largest export destinations for Korean goods.
Both countries initiated negotiations to upgrade the Comprehensive Economic Partnership (CEPA) to enhance bilateral trade between them.
3) Indian Market Being A Profitable Investment For South Korean Companies:
To keep the export engine that drives South Korea’s economy running, President Moon is now targeting economies with the greatest growth potential and India with its huge consumer market is expected to grow at more than twice the rate of South Korea in the coming years. That its companies already have a significant presence in the Indian market, adds to the comfort.
Major Korean companies such as Samsung have made major investments in India. On the Indian visit of South Korean President Moon Jae-in in July 2018, he and Modi inaugurated Samsung’s new manufacturing facility in Noida which is the company’s largest manufacturing plant anywhere in the world. Several new South Korean companies, for instance, Kia Motors, Posco, The Lotte Group are also making their way into the Indian market.
The country’s ageing population with lots of skilled youth means India could be a source of talent too.
4) Religious Attraction Spot For South Koreans:
India has always been a tourist attraction for the rest of the world for various reasons. Buddhism being the foremost reason for many of the South Koreans to travel to Lumbini, Bodh Gaya, Sarnath and Kushinagar, parts of UP and Bihar for their religious purposes. The tourism sector can also prove as a profitable sector to look forward and invest in.
During South Korean President Moon Jae’s July 2018 visit, a sapling of the bodhi tree was gifted to the people of Gimhae which has a historic connect with India since Princess Suriratna of Ayodhya (known as Heo Hwang-ok in South Korea) is known to have travelled there in 48 CE to marry Korean King Suro of Geumgwan Gaya. Due to India having ancient ties with South Korea, both countries now share a unique bond with each other which resulted in India being an attractive tourist destination for a lot of Koreans.
South Korean First Lady Kim Jung-Sook, participated in the ground-breaking ceremony of the Queen Suriratna Memorial in the city of Ayodhya in November 2018.
5) Endless opportunities in textile and wellness industry:
India has always proved to be the land of opportunities for new business. India is known to be as the second-largest textile manufacturer in the world and second-largest producer of silk and cotton. The first lady president Kim Jung-sook of the republic of Korea addressed the dignitaries at the webinar ” Weaving relation: Textile tradition ” organised by Indian council of culture relation in ‘ Uttar Pradesh Institute Of Design ‘ on 3rd October 2020, commemorating the 150th birth anniversary of Gandhi, she mentioned about Gandhi and his ‘ charkha movement ‘ which created lots of jobs for many Indians and further strengthened the economic independence of the country. She also mentioned that in the era of mass production the traditional handwoven and eco-friendly fabrics like khadi are drawing the wide interest of the people.
India is the largest exporter of ayurvedic and herbal products with 200 years of revolutionary advancement in ayurvedic science. The beauty & wellness market in India was valued at INR 901.07 Billion in 2018, and is forecast to reach INR 2,463.49 Billion by 2024, expanding at a compound annual growth rate of ~18.40% during the 2019-2024 period via businesswire.com. With Koreans moving more towards healthier lifestyles and more herbal and natural products, ayurvedic medicine is in its initial stage to set its stage in the Korean market. Brands like Himalayan, Dabur, Kama Ayurveda, Biotique and Organic India are trying to make its way through the commercial market for the long run.
6) India Being A Part Of South Korea’s Peace Process:
Seoul has also been seeking to strengthen relationships in the strategic sectors, including the defence and civil nuclear industries. In order to achieve peace by strengthening the security of the country, South Korea has proposed India to become a part of their Peace Process. Both the countries are now working towards implementing the India-Korea civil nuclear deal signed during the Manmohan Singh regime for security-related issues.
Apart from what grounds India can prove to be a land of opportunities for South Korea. There are endless things for India to learn from South Korea as well.
The sole reason for the growth of the largest companies in India has been either on domestic strengths or as service providers to the developed world. Interestingly, the Korean companies have a significant Indian presence yet still corporate India’s presence in South Korea is marginal.
Despite huge border military tensions with the North, rampant corruption at the highest level, multiple health epidemics, huge defence spending, and the ’97 Asian financial crisis, it is worth considering the fact that South Korea has prospered despite all odds.
South Korea’s approach to India is a great example of how one country can create healthy relations with another and it only leads to the benefits that both countries can achieve and how they prosper.
What do you think about the future of the two countries? Will India continue proving as a benefactor of South Korea in terms of labour and opportunities? Tell us your views on this, below.