India and South Korea may be large economies at very different stages of development, but they confront similar strategic dilemmas today. Over the past decade, both countries witnessed setbacks in their relations with China: violent India-China border clashes in 2020 and Beijing’s economic retaliation against South Korea for the deployment of an anti-missile system contributed to a downturn in public opinion of China in both countries. More recently, India and South Korea have also experienced volatility in their relations with the United States involving tariffs and, in South Korea’s case, the detention of citizens at a Hyundai Motors plant. Growing China-Pakistan military cooperation and North Korea’s deployment of soldiers in Ukraine on behalf of Russia are additional developments shaping strategic considerations in New Delhi and Seoul, respectively.
Amid this backdrop, the two countries are seeking further diversification in terms of markets and investment, as well as sources of greater geopolitical stability. The newly-elected presidency of Lee Jae Myung in South Korea has created an opportunity to advance relations. Lee was elected this year with a strong mandate and began his presidency with a visit to Japan and a bid to stabilize relations with U.S. President Donald Trump. In July, India’s Prime Minister Narendra Modi welcomed Lee’s special envoy in New Delhi, having earlier met Lee himself on the sideline of the G7 Summit in Canada. Significantly, South Korea’s new foreign minister Cho Hyun was previously his country’s ambassador to India. During an early visit to New Delhi in August, he signaled a desire to make better relations with New Delhi a priority. Other recent developments in relations are promising: in March 2024, India, South Korea, and the United States held an official trilateral technology dialogue and South Korea’s sovereign wealth fund, the Korea Investment Corporation (KIC), recently opened an office in Mumbai.
The greatest potential for cooperation between the two countries involves aligning South Korea’s dynamic industrial capabilities with India’s own industrialization efforts. Several of South Korea’s major conglomerates, known as chaebol, have had a checkered record in India. Today, the likes of Samsung, SK, Hyundai Motors, LG, POSCO, and Hanwha are interested in expanding their presence in at least five important industrial sectors:
The automotive sector leads the way. Hyundai Motors India’s initial public offering (IPO) last year was India’s largest ever, raising $3.3 billion. The company plans to invest $3.6 billion in India over the next decade to develop a new plant in Pune and expand facilities in Chennai. With the potential to produce 1.1 million vehicles in India per year, Hyundai is looking beyond the Indian market to export to other developing countries. Automotive investments have also been two-way: South Korean commercial vehicle manufacturer Tata Daewoo is a wholly-owned subsidiary of India’s Tata Motors.
Defense has emerged as a surprising area of rapidly increasing cooperation. The K-9 Thunder self-propelled howitzer manufactured by Hanwha Aerospace is assembled in India by Larsen and Toubro as the K-9 Vajra. A second order of 100 units was agreed earlier this year, after a first order was completed in 2020. Other areas of defense collaboration are being explored, including in the maritime domain. In 2019, the two countries signed a logistics agreement and in 2020 set out a roadmap for defense industrial cooperation.
Electronics and digital technologies offer the potential for much more deeply entwined collaboration. Although South Korean electronics manufacturers Samsung and LG have sizeable presences in the Indian markets, including assembly, there has so far been limited Korean interest in the Indian Semiconductor Mission. Initial contacts between the India Electronics and Semiconductor Association (IESA) and the Korea Display Industry Association (KDIA) pledge to improve workforce development and technical exchanges. Korean firms such as SK Hynix have also expressed some interest in India’s developing semiconductor testing and packaging capabilities.
The steel sector reflects another area of nascent cooperation. India is the largest steel producer today after China but has an opportunity to make that industry cleaner and more energy efficient, including with proprietary Korean technologies. This, in turn, would make Indian steel exports more attractive to developed markets, including in the European Union, which is expected to raise environmental standards for imports. Last month, South Korea’s POSCO signed an initial agreement to develop a large integrated steel plant, possibly in Odisha, with an Indian partner JSW Steel. POSCO’s previous landmark project in India had stalled between 2005 and 2012 due to regulatory delays and controversies.
Finally, the shipbuilding industry holds considerable promise. As India begins ambitious plans to expand its shipbuilding capabilities, South Korea’s boasts industry leaders in HD Hyundai, Samsung Heavy Industries, and Hanwha Ocean. In July, HD Hyundai signed a long-term cooperative agreement with Cochin Shipyard Limited.
Despite considerable progress made in recent years and promising developments in several key sectors, relations between India and South Korea remain limited by a few factors. Despite a trade agreement in 2009, bilateral commerce has grown only slowly from $20.5 billion in 2011 to $24.4 billion in 2023, with South Korea enjoying a $11.2 billion trade surplus. Moreover, Seoul’s state structures have not necessarily kept pace with private enterprise in their investment in India. There remains the potential to widen the dialogue between the two countries to mutual concerns about China, the international economic order, the Indo-Pacific, and nuclear, missile, and drone proliferation.
There is also a lack of strong people-to-people links. Moreover, despite the surging popularity of K-Pop and other Korean cultural exports in India, the number of Indians who work in, visit, study, or travel to South Korea remains frustratingly low. The approximately 18,500 Indians in the country are outnumbered by almost twice as many Bangladeshis and Sri Lankans, and almost four times as many Nepalis. Contacts between South Korea’s leading higher education institutions – such as Yonsei, Korea, and Seoul National University – and Indian counterparts could be developed further. A truly broad-based partnership – beyond robust economic and industrial ties – will require stronger strategic and people-to-people contacts.
Dhruva Jaishankar is Executive Director at ORF America.