India Korea Trade
India Korea Trade Agreement
Introduction
India and Korea's bilateral relationship have longstanding historical and cultural ties, spanning over two millennia. The two countries established diplomatic relations in 1973. It made the path for a sound and steady development in bilateral relations across a wide range of areas, including politics, economy and culture.
India-Korea Trade
- The bilateral trade between India and Korea grew by 40% to US$ 23.7 billion in 2021, the highest-ever bilateral trade figure till now between the two nations.
- In 2020, the bilateral trade value between the two countries was US$ 16.9 billion.
- India-Korea bilateral trade in the first half of 2022 reached US$ 14.2 billion, the largest volume in the first half ever.
- The Republic of Korea is the 13th largest FDI investor in India from April 2000 – September 2022. Metallurgy, automobile, electronics, prime movers, machine tools, hospitals and diagnostic centres are the top sectors which have attracted investment.
- As India’s economic ties continue to grow with South Korea, the bilateral trade is likely to reach $50 billion by 2030. It was US$ 23.7 billion in 2021, up 40% from the preceding year.
Major exported items from India to Korea
- India exported 3,335 commodities to Korea in FY22.
- India’s exports to Korea stood at US$ 6.65 billion during 2022-23.
- Major exported items from India to Korea include petroleum products (US$ 2.07 billion), aluminium & products of aluminium (US$ 0.92 billion), iron and steel (0.30 billion), organic chemical (US$ 0.27 billion), lead and products made of lead (US$ 0.21 billion), oil meals (US$ 0.22 billion), etc.
- India’s exports to Korea stood at US$ 1.10 billion from April-May 2023-24.
- Major exported items from India to Korea include aluminium & products of aluminium (US$ 223 million), petroleum products (US$ 216 million), iron and steel (US$ 83 million), other miscellaneous items (US$ 58 million), oil meals (US$ 47 million), electric machinery and equipment (US$ 46 million), organic chemicals (US$ 46 million), etc. from April-May 2023-24.
Major imported items by India from Korea
- India imported 3,688 commodities from Korea in FY22.
- Imports from Korea to India stood at US$ 21.22 billion during 2022-23.
- India's imports from Korea include petroleum products (US$ 2.00 billion), aluminium (US$ 0.92 billion), iron and steel (US$ 0.30 billion), organic chemicals (US$ 0.27 billion), lead & products made of lead (US$ 0.22 billion), oil meals (US$ 0.22 billion), etc. during 2022-23.
- Imports from Korea to India stood at US$ 3.18 billion from April-May 2023-24.
- India's imports from Korea include aluminium & products of aluminium (US$ 0.22 billion), petroleum products (US$ 0.21 billion), iron and steel (US$ 0.08 billion), other miscellaneous engineering items (US$ 0.05 billion), etc. from April-May 2023-24.
Economic Relations and Investments
In 2021, India received a recorded US$ 218 million investment from Korea. Korea’s total FDI to India during April 2000-March 2023 was valued at US$ 5.46 billion. Investments from India to Korea are to the tune of pprox.. US$ 3 billion led by Ssangyong, Tata Daewoo, and Novelis. Hyundai Motor Group, Samsung Electronics and LG Group have been the leader among the Korean companies that have invested in India.
Indian companies like Mahindra and Mahindra, Tata Motors, and banks like State Bank of India and Bank of Baroda have large investments in South Korea.
To improve bilateral economic relations, India and South Korea are seeking to expand a Comprehensive Economic Partnership Agreement (CEPA), with an ambition to increase bilateral trade to US$ 50 billion before 2030.
India and ROK launched an initiative ‘Korea Plus’, as proposed by Prime Minister Mr. Narendra Modi in June 2016 in India to promote and facilitate Korean Investments in India. A Korea India SME and Start-up Centre was launched in September 2019.
India and South Korea signed an arrangement on November 30, 2022, regarding the Economic Development Cooperation Fund loan of over US$ 1,900 million (245 billion Korean Won) for the establishment of an Intelligent Transport System on the Nagpur-Mumbai Super Communication Expressway Project in Delhi. The project's objective is to enhance traffic management efficiency by establishing the Intelligent Traffic Management System.
Recent Trends & developments
- South Korea’s leading asset manager Mirae Asset Global Investments has purchased a logistics centre near Mumbai in the latest move to expand its portfolio in one of the world’s fastest-growing economies.
- Confederation of Indian Industry (CII) in partnership with the Korea International Trade Association (KITA) organised the India Korea Business Partnership Forum on 10th November 2023.
- The 9th round of the India-Republic of Korea (ROK) Comprehensive Economic Partnership Agreement (CEPA) up-gradation negotiation was held in Seoul from November 3-4, 2022. Both sides shared the hope that the CEPA upgradation negotiations would play an important role in strengthening and deepening economic cooperation between both countries.
- In 2020, India and South Korea signed a Roadmap for Defence Industries Cooperation between the Republic of India and the Republic of Korea (ROK) deal.
- Korea’s New Southern Policy reveals areas where maritime cooperation between the two countries can be further developed. These include shipbuilding (an area where India and South Korea already have a Memorandum of Understanding), joint capacity building, maritime realm awareness, humanitarian aid and disaster relief, search and rescue, marine pollution, anti-piracy, anti-terrorism and anti-trafficking, and prevention of marine pollution.
Conclusion
India is Korea’s 16th biggest source of imports and 7th biggest export market as of 2021. The emerging strategic alignment between India and Korea is creating a new convergence of capabilities and closer synergy in new areas of economic cooperation such as public health, green growth, digital connectivity, and trade, among others.
Contacts
- Embassy of India in Korea
Address: 101, Hannam Dong, Dokseodang-ro, Yongsan-gu, Seoul 04419, Republic of Korea;
Telephone: : +82-2-798-4257; - :+82-2-798-4268
Email: cons.seoul@mea.gov.in
Mr. Amit Kumar (Ambassador) - cons.seoul@mea.gov.in - Embassy of Korea in India
Address: 9, Chandragupta Marg, Chanakyapuri Extension, Chanakyapuri, New Delhi, Delhi 110021;
Telephone: +91-11-4200-7000
Email: india@mofa.go.kr
H.E. Chang Jae-bok (Ambassador)
Partners
