After an eight-year gap, South Korean President is on a three-day visit to India, signalling a strategic reset in bilateral ties that goes well beyond traditional trade and investment. The visit aims toward deeper cooperation in critical sectors such as energy, semiconductors, shipbuilding, steel, and emerging technologies, areas increasingly central to both countries’ economic resilience and national security.
Officials on both sides see the visit as timely, taking place amid a volatile geopolitical and economic environment marked by supply chain disruptions and an ongoing global energy crisis. The outreach shows a shared intent to elevate the partnership into what leaders described as a “futuristic” and “comprehensive economic-security relationship.”
Closing the Gap
Experts say the eight-year hiatus in presidential-level engagement makes the visit particularly interesting. Vanshika Saraf of The Takshashila Institution says that such a gap is significant for two Indo-Pacific economic heavyweights that are geographically proximate.
“However, the timing is important,” she said, pointing to the broader geopolitical development. “It is taking place against the backdrop of an extraordinary geopolitical crisis, which indicates how both nations are attempting to transform a mostly commercial relationship into a broader economic-security partnership.”
New Delhi, in a statement, reiterated that South Korea remains an indispensable partner in its Act East Policy, while Seoul views India as a central pillar of its evolving diplomatic outreach, building on the legacy of its New Southern Policy. Both sides acknowledged their shared role in contributing to peace, stability, and security in the Indo-Pacific.
Prime Minister Narendra Modi highlighted the ideological convergence underpinning the partnership. “Democratic values, a market economy, and respect for the rule of law are deeply embedded in the DNA of both our nations,” he said during joint remarks, adding that the visit would help transform a “trusted partnership into a futuristic partnership.”
From ‘Chips to Ships’
A key outcome of the visit is the broadening of bilateral engagement into high-technology and industrial sectors. Leaders announced initiatives spanning semiconductors, artificial intelligence, shipbuilding, clean energy, and advanced manufacturing.
Among the headline announcements is the launch of the India–Korea Digital Bridge, a framework aimed at deepening collaboration in AI, semiconductors, and information technology. While institutional details remain under development, the initiative reflects a clear intent to integrate the innovation ecosystems of both countries.
Saraf believes that the shift is structural. “This marks a move from treating the relationship as a trade and investment partnership to one where both countries see each other as joint industrial and technological partners,” she said. “The agenda now anchors cooperation in frontier sectors like AI, semiconductors, and shipbuilding.”
The Digital Bridge is expected to facilitate not just AI applications but also the broader infrastructure required for deployment, including data systems, hardware supply chains, and talent mobility. “Given South Korea’s global leadership in semiconductor manufacturing and India’s push to build domestic chip capabilities, the framework could create a 'trusted corridor' for critical technology flows within the Indo-Pacific,” Saraf added.
In parallel, the two sides signed multiple MoUs covering shipbuilding, ports, sustainability, and steel sectors, where complementarities are strong and where both governments are keen to scale up industrial cooperation.
Economic Security takes Centre Stage
Reflecting the changing global landscape, India and South Korea also agreed to institutionalise an Economic Security Dialogue, an important step that elevates economic cooperation into the strategic domain.
Saraf said that this is particularly significant in the context of the global energy crisis. “It signals that both governments view industrial capacity and advanced technology as part of national strategy, not merely business promotion,” she said.
To support financial and business linkages, the two countries launched the India–Korea Financial Forum and established an Industrial Cooperation Committee. These mechanisms are expected to streamline investments, facilitate joint ventures, and accelerate project implementation.
Additionally, India announced plans to establish a dedicated Korean Industrial Township to ease market entry for Korean firms, particularly small and medium enterprises. The move is aimed at reducing operational friction and strengthening manufacturing linkages on the ground.
Doubling Trade by 2030
Economic cooperation remains a central pillar of the relationship, with both countries setting an ambitious target to nearly double bilateral trade from the current USD 27 billion to USD 50 billion by 2030.
Union Commerce and Industry Minister Piyush Goyal said achieving this goal would require an annual growth rate of around 18 per cent. He emphasised that the target only scratches the surface of the partnership’s potential and called for a “mission-mode” approach to unlock the next phase of growth.
Both sides agreed to fast-track the upgrade of the Comprehensive Economic Partnership Agreement (CEPA), originally signed in 2010. The review will focus on addressing non-tariff barriers, easing rules of origin, expanding market access, and improving the ease of doing business.
Goyal highlighted sectors such as semiconductors, electronics, green energy, e-mobility, shipbuilding, and digital trade as key areas of synergy. He also highlighted opportunities for co-production, co-design, and co-innovation aimed at jointly serving global markets.
A Long Road Ahead
Despite strong growth, the bilateral trade relationship has remained somewhat imbalanced, an issue India is keen to address. Saraf says that reaching the USD 50 billion target is feasible but conditional.
“From a base of USD 27 billion, trade would need to rise by roughly 85 per cent over the next four years,” she said. “That requires upgrading the 2010 agreement and expanding cooperation in sectors like energy, critical minerals, and advanced manufacturing. Traditional merchandise trade alone will not be sufficient.”
She added that India would need improved access for agricultural products and services, areas where it holds a comparative advantage. Streamlining tariffs, certifications, and procurement rules under the CEPA review will be critical.
The proposed Korean Industrial Township is expected to play a supportive role by lowering entry barriers for Korean companies, particularly SMEs, thereby structurally boosting bilateral trade over time.
As India positions itself as a rapidly growing USD 4 trillion economy with ambitions of reaching USD 30 trillion by 2047, the partnership with South Korea is being reset to align with long-term strategic and economic priorities. |
