7 PM | Giving ties with Seoul a facelift | 24th July, 2019

Context:India – South Korea relations.

More in News:Prime Minister Narendra Modi met South Korean President Moon Jae-in on the sidelines of the G20 summit in Osaka and discussed ways to enhance trade, economic and people-to-people relations.

Political and security Relations:

• India played an important and positive role in Korean affairs after Korea’s independence in 1945. Mr K P S Menon of India was the Chairman of the 9-member UN Commission set up in 1947 to hold elections in Korea.
• Both the countries signed the Civil Nuclear Energy Cooperation Agreement in 2011 during the then President Pratibha Patil’s state visit to Korea.
• During Prime Minister Narendra Modi’s visit to South Korea in 2015, the bilateral relationship was upgraded to ‘special strategic partnership’.
• In a joint statement, PM Modi and President Park Geun-hye agreed to establish a ‘2+2’ consultation mechanism at Secretary/Vice Minister of Foreign Office and Defence Ministry.
• India’s “Act East Policy” and Korea’s “New Southern Policy” both falls in line. Both have agreed to have greater emphasis on implementing policies of comprehensive cooperation.

Korea’s New Southern Policy:

• The “New Southern Policy” was introduced against the backdrop of strain in South Korea-China relations over deployment of the U.S. Terminal High Altitude Area Defence (THAAD) anti-missile system in South Korea. THAAD has led to retaliatory measures from China.
• In 2017, President Moon Jae-in announced the New Southern Policy.
• Under this policy direction, Korea is looking beyond Northeast Asia to deepen bonds of cooperation with ASEAN and South Asia including India.
• By forging a mutually beneficial partnership, the policy’s ultimate goal is to contribute to an even better quality of life for the people of both South-east Asia and Korea and in so doing fostering a peaceful community of prosperity. The focus of this policy mainly lies in the following segments:
  • Elevate the levels of diplomacy and closeness with the states in southern region, including Southeast Asia (ASEAN), South Asia (India), and Australasia (Australia and New Zealand)
  • Under the New Southern Policy, the agendas are tied to Northeast Asia Plus Community of Responsibility’s (NAPCOR) goal of ‘national security through peace’.
  • Thus, the major pillars include economic cooperation, peace diplomacy, and mediating conflict through multilateralism

Economic Relations:

• India and Korea are the third and fourth largest economies in Asia and share a strong bond of friendship based on shared commitment to the values of democracy, open society and liberal international economic order.
• CEPA:Trade and economic relations have started to gather momentum again following the implementation of Comprehensive Economic Cooperation Agreement (CEPA) in 2010 and the bilateral trade in 2011 crossed USD 20.5 billion registering a 70% growth over a two-year period. CEPA is Korea’s first free trade agreement with a member of the BRICS nations. 
• India’s Export: Major items of India’s exports to Korea are mineral fuels/oil distillates (mainly naphtha), cereals, iron and steel. Basic materials comprise the bulk of India’s exports to Korea with Naphtha accounting 23.9% in 2016.
• India’s Import: Korea’s main export items are automobile parts, telecommunication equipment, hot rolled iron products, petroleum refined products, base lubricating oils, nuclear reactors, mechanical appliances, electrical machinery & parts and iron and steel products.
• Investment: In 2018, Korea’s investment to India crossed the $1 billion mark for the first time, recording $1.053 billion. Korea’s total FDI to India up to December 2018 stands at $5.95 billion. Investment from India to Korea are to the tune of approx. $3 billion
• Global Trade: India’s share in Korea’s global trade was 1.89% in 2018, India’s contribution in Korea’s global imports increased from 0.78% in 2001 to 1.10% in 2018. India is Korea’s 20th biggest source for imports and 7th biggest export market as of 2018.
• India and South Korea launched an initiative ‘Korea Plus’, as proposed by Prime Minister Modi in June 2016 in India to promote and facilitate Korean Investments in India. To give it much wider outreach and publicity.

Defence Relations:

• Defense ties in particular have grown from strength to strength, with a major defense partnership deal worth nearly $1 billion signed previously for the joint production of Korean self-propelled artillery guns and India’s purchase of these weapons.
• Co-production of the K9 Thunder howitzer is a prime example of the ongoing defence collaboration.
• With technology transfer from South Korea, India’s Larsen and Toubro plans to achieve over 50% localisation by manufacturing the key components of these weapon systems domestically as part of ‘Make in India’. 

Cultural Relations:

To further enhance cultural exchanges between India and Korea, an Indian Cultural Centre (ICC) was established in Seoul in April 2011. Another Culture Centre was established in Busan in December 2013 on Public Private Partnership mode.

Indian Diaspora:

The total number of Indian nationals living in ROK is estimated to be around 12,000, which includes 300 PIOs. A large number of Indian scholars are pursuing post-graduate and Ph. D programmes, mostly in pure sciences in Korea. During the past few years, many professionals mainly in the areas of IT, shipping and automobile have immigrated to ROK. They are working mostly with Samsung, LG, Hyundai TATA Daewoo and TCS. There is also significant number of students and academicians in the universities.

Challenges:

• The target of doubling trade volume to $50 billion by 2030 is nowhere to be achieved primarily due to lack of efforts. The CEPA is core mechanism of economic ties and to achieve the target it needs to be immediately upgraded.
• The Indian Cultural Centre has failed to reach out to common South Korean.
• The tourism between two is not being focused in its full potential.
• The widening trade deficit in South Korea’s favour has raised concerns over the trading relations between the countries.
• Despite the Special Strategic Partnership between South Korea and India there remains scope for expansion of bilateral relations in the strategic sphere. India-South Korea relations has been mostly dominated by economic relations.

Way Forward:

India is keen to buttress its partnerships with countries across the Indo-Pacific region – a concept describing the evolving geopolitical and economic order surrounding the Indian Ocean’s tropical waters, the western and central Pacific Ocean and the Southeast Asian seas. Prime Minister Modi has stated that the purpose of engagement across the Indo-Pacific should be to promote cooperation, not dominance; connectivity, not isolation; respect for the global commons; inclusive, rather than exclusive, architectures; and adherence to international rules and norms.

Therefore our focus is on the development of an open, transparent and inclusive architecture linking the Indian and Pacific oceans. We desire to work with all stakeholders whose prosperity and security depend on the waterways traversing these two major oceans. South Korea has an important role and potential in this regard.

Source: https://www.thehindu.com/opinion/op-ed/giving-ties-with-seoul-a-facelift/article28689943.ece