Economic Ties with Seoul Must Be Strengthened
Why in News?
India and South Korea are celebrating ten years of their “Special Strategic Partnership” in 2025, a milestone in bilateral relations that were elevated in 2015. As the world undergoes major shifts in supply chains, economic alliances, and geopolitical alignments, both nations are assessing ways to deepen cooperation, navigate challenges, and explore new areas of collaboration. Strengthening ties has become vital in the context of global uncertainties and evolving regional power dynamics.
Introduction
The diplomatic relationship between India and South Korea has grown steadily over decades, culminating in 2015 when the two countries upgraded their ties to a Special Strategic Partnership. This move reflected a shared vision to enhance cooperation across trade, investment, technology, and cultural exchange.
As 2025 approaches, marking a decade of this strategic bond, it is an opportune time to review achievements, identify existing gaps, and formulate a roadmap for the future. Both countries face common challenges—ranging from disruptions in global supply chains to increased geopolitical instability—yet also share complementary strengths that can be harnessed for mutual benefit.
India–South Korea Trade Relations: Progress and Potential
Between 2015 and 2024, bilateral trade between India and South Korea grew by 64 percent, reaching USD 27.4 billion. This reflects strong growth, but the figures reveal an imbalance:
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Indian exports to South Korea have grown at a modest pace of around 6.4 percent annually. In 2024, India exported goods worth USD 15.6 billion to Korea. The export basket mainly includes:
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Mineral fuels
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Aluminium
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Organic chemicals
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Semi-finished iron and steel
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Plastics
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Korean exports to India have risen faster, at 6.6 percent annually, and include petroleum products, electronics, automobiles, machinery, and chemicals.
India’s export potential to Korea remains vastly untapped. According to estimates, in 2024, India’s exports could have been as high as USD 381 billion globally. However, exports to Korea stood at just USD 15.6 billion—a fraction of this capacity.
Challenges in the Trade Relationship
Several hurdles have limited India’s export growth to Korea:
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High Tariffs and Non-Tariff Barriers
Korean tariffs on Indian goods average 25 percent in many sectors, making Indian exports less competitive compared to nations with favourable trade agreements. -
Limited Diversification
India’s export basket remains narrow, focusing on a few key commodities rather than high-value, technology-intensive products. -
Underutilised Trade Agreements
The existing Comprehensive Economic Partnership Agreement (CEPA) between India and Korea has not been optimally used, with complex rules of origin and procedural barriers discouraging small and medium enterprises (SMEs) from tapping the market. -
Global Disruptions
The COVID-19 pandemic, geopolitical tensions, and the U.S.–China trade conflict have disrupted supply chains and increased costs for exporters.
New Opportunities for Deeper Engagement
Despite these challenges, the evolving global economic landscape presents multiple openings for India and Korea to strengthen their ties.
1. Complementary Strengths in Manufacturing
South Korea’s advanced manufacturing and technology sectors align well with India’s growing industrial base and skilled workforce. India’s Production-Linked Incentive (PLI) schemes in electronics, solar energy, and semiconductors offer Korean firms lucrative investment avenues.
The concept of a “K-Semiconductor Belt” in India could create hubs for:
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Chip designing
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Materials supplies
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Research and Development (R&D)
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University-industry partnerships
2. Reducing Supply Chain Dependencies
Technological disruptions have shown the risk of overdependence on a few suppliers. Joint ventures in electronics, electric vehicles, battery manufacturing, and renewable energy could diversify supply sources and enhance resilience.
3. Innovation and Start-Up Collaboration
Both nations have strong start-up ecosystems. Korea’s experience in nurturing tech-driven SMEs can be combined with India’s thriving entrepreneurial base. Areas of focus include:
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FinTech
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GovTech
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EdTech
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Artificial Intelligence (AI)
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Digital Public Infrastructure (DPI)
4. Green Growth and Sustainability
Climate change and the push for sustainability have opened doors for joint research in clean energy technologies such as hydrogen fuel cells, offshore wind energy, and carbon capture solutions.
Strategic and Security Dimensions
Beyond economics, India and Korea share common security interests in maintaining a stable Indo-Pacific region. The two nations are part of multiple global platforms, including the G20 and the UN, and share concerns over supply chain resilience, energy security, and maritime safety.
Collaborating in defence technology, cybersecurity, and disaster relief preparedness could further solidify their strategic bond.
People-to-People and Cultural Exchanges
Cultural diplomacy is another important pillar. Korean culture (K-pop, K-dramas, cuisine) has found a large audience in India, while Indian culture, yoga, and cinema have a niche but growing presence in Korea. Strengthening tourism, student exchanges, and language programs could deepen mutual understanding.
The Road Ahead
To achieve the full potential of the India–Korea partnership, both sides must act decisively:
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Revamp the CEPA to remove tariff barriers and simplify customs procedures.
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Expand investment in each other’s infrastructure, particularly ports, logistics, and renewable energy facilities.
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Jointly develop high-tech manufacturing hubs under India’s Make in India and Korea’s New Southern Policy.
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Promote innovation corridors linking Indian start-up hubs with Korean technology clusters.
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Enhance maritime cooperation to ensure secure sea lanes in the Indo-Pacific.
Conclusion
The India–South Korea Special Strategic Partnership has achieved significant milestones in the past decade, but untapped opportunities remain vast. With complementary strengths, shared democratic values, and aligned economic interests, the two countries are well-positioned to elevate their partnership to new heights.
In the face of shifting global realities—be it economic disruptions, supply chain reconfigurations, or climate challenges—India and Korea can not only safeguard their national interests but also contribute to regional and global stability. The next chapter will depend on sustained political will, bold reforms, and proactive engagement from both sides.
Q&A Section
Q1. When was the India–South Korea relationship elevated to a Special Strategic Partnership, and what does it signify?
A1. The relationship was elevated in 2015, marking a commitment to deepen cooperation beyond trade, encompassing strategic, technological, and cultural collaboration, reflecting shared values and mutual interests.
Q2. What has been the growth in bilateral trade between India and South Korea from 2015 to 2024?
A2. Bilateral trade grew by 64 percent during this period, reaching USD 27.4 billion in 2024, though Indian exports have grown at a slower rate compared to Korean exports to India.
Q3. What are some key sectors where India has strong potential to increase exports to Korea?
A3. Potential sectors include electronics, solar energy, semiconductors, aluminium, organic chemicals, pharmaceuticals, engineering goods, and clean energy technologies.
Q4. How can India and Korea collaborate in innovation and start-ups?
A4. They can establish innovation corridors and incubation hubs, leverage Korea’s expertise in advanced manufacturing, and integrate India’s Digital Public Infrastructure with Korean technology strengths in FinTech, GovTech, and AI.
Q5. Why is it important for India and Korea to strengthen maritime cooperation?
A5. Both nations rely heavily on secure sea lanes in the Indo-Pacific for trade and energy imports. Enhanced maritime cooperation ensures security, stability, and resilience against disruptions in global shipping routes.
