India-South Korea Relations

Context:

Recently, South Korean President Moon –Jae was on a visit to India from July 8^th to 11^th

Historical Background:

• India had contributed to resolving the humanitarian issues arising out of the Korean War (1951-52)
• Bilateral relations between India and South Korea started in 1962. Diplomatic ties were established in 1973
• Former Korean Ambassador to India Kim Joong Keun had opined that India-South Korea relations can be divided in to three phase:

1. 1973-1990- Budding phase- The bilateral relationship was in initial phase
2. 1991-2009- Phase of economic and commercial cooperation
3. 2009 onwards- phase of growing strategic partnership

Different Dimensions of India-South Korea Relations:

Economic:

Trade:

• Bilateral trade between India and South Korea stood at 12 billion dollars in 2008
• However, trade and economic relations between the two countries got a boost after the implementation of CEPA in 2010.
• Bilateral trade in 2011 crossed $20.5 billion- 70% growth in 2 years
• However, after the remarkable growth, volume of bilateral trade showed a declining trend which later recovered in 2017
• As of 2017, Indian exports to South Korea stood at $2.91 billion and imports from there stood at $8.71 billion

Investments:

• An Initiative called “Korea Plus” has been launched to promote and facilitate Korean Investments in India.
• As of 2017, Major Korean industries such as Samsung, Hyundai Motors and LG have made significant investments into India, estimated at over $4.4billion

Strategic:

During PM Modi’s visit to South Korea in 2015, India and South Korea entered into an agreement to upgrade the bilateral relations to ‘Special Strategic Partnership’.

Act east Policy and New Southern Policy:

• Recently, the leaders of India and South Korea have advocated building upon the complementarities between India’s “Act East” policy and South Korea’s “New Southern Policy”.
• The “Act East” policy aims to deepen India’s ties with the fast growing economies of South-East Asia and enhance relationship with Japan
• The recently introduced South Korea’s “New Southern Policy” aims to enhance economic and political linkages with South-East Asia and India. This is in order to reduce reliance in China and the US which are biggest trading partners of South Korea
• The NSP 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

Indo-Pacific Region:

• South Korea has not shared much view on the Indo pacific region. However, both the countries share common concerns about polarized alliances, emerging economic and security issues in the Indo-Pacific
• South Korea hold importance for India to initiate a multi-polar order in the Indo-Pacific region as a deterrent against possible uni-polar order of China or a bi-polar order as advocated by USA

Major Takeaways from the recent visit:

11 MoUs signed

1. MoU on Early Harvest Package

• India and South Korea signed a joint statement on Early Harvest Package of the upgraded Comprehensive Economic Partnership Agreement (CEPA).
• The Early Harvest Package seeks to facilitate ongoing negotiations on upgrading the India-South Korea CEPA by identifying key areas of trade liberalization

2. MoU on Trade Remedies:

• The aim of this MoU is cooperation in the area of trade remedies viz. anti-dumping, subsidy and safeguard measures.

3. MoU on Future Strategy Group

• It envisages cooperation in the development of cutting edge technologies for commercialisation to gain benefits from the 4^th Industrial Revolution

4. MoU in the field of scientific and technological research between Council for Scientific and Industrial Research (CSIR) and National Research Council of Science and Technology (NST):

5. MoU on cooperation between Research Design and Standards Organisation (RDSO) and Korea Railroad Research Institute (KRRI)

6. MoU on Biotechnology and Bio-economics:

• For facilitating adoption of biotechnology and bio-big-data in health, medicine, agro fishery products, digital healthcare, precision medicine, brain research, and next generation-medical equipment

7. MoU Information and Communication Technology (ICT) and telecommunications:

• For facilitating development and modernisation of telecommunication/ICT services ,5G, cloud computing, big data, IOT, AI

8. MoU micro, small and medium enterprises

• Envisages cooperation in the development of MSMEs and improve their competitiveness in the global markets

9. MoU between government of Gujarat and Korea Trade Promotion Agency (KOTRA):

• Enhance industrial and investment relations between South Korean companies and Gujarat

10. Cultural Exchange Programme for the year 2018-2022

11. MoU on Queen Suriratna Memorial Project:

• This is to upgrade and expand the existing monument commemorating princess Suriratna
• Suriratna was an Ajodhya princess who travelled to South Korea in Ad48 and married King Kim Suro

Vision Statement signed between India and South Korea:

The Vision statement includes:

• Strategic ties in the region
• Enhance military exchanges
• Research and development including innovative technologies
• Encouraging Korean defence manufactures to investment in India- Hanhwa Techwin, has partnered with Larsen and Toubro to produce K‐9 Vajra artillery guns for the Indian Army at a factory near Pune
• Commitment to build a peaceful, secure, stable, open, inclusive and rules-based region based on 3 Ps- People. Prosperity and Peace
• Collaborate on development projects in third world countries – India and South Korea are likely to undertake capacity building programme in Afghanistan
• Emphasised on the central roles to be played by both the countries in India’s Act east Policy and South Korea’s New Southern Policy (NSP)

Challenges in India-South Korea Relations:

1. Trade:

• Bilateral trade between India and South Korea has been far from its potential. This is primarily because talks to improve CEPC has remained inconclusive
• Further, the widening trade deficit in South Korea’s favour has raised concerns over the trading relations between the countries

2. Ease of Doing Business:

• Korean companies have complained about ease of doing business in India. This highlights that the initiative “Korea Plus” has not been implemented properly
• Further, the POSCO plant which was to be set up in Odhisa has halted

3. Tourism:

• The tourism between South Korea and India has not been developed up to its full potential

4. Strategic ties:

• 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:

1. At a time when protectionism is rising in the world, India and South Korea should take advantage of the economic partnership. Bilateral trade between India and South Korea should be boosted. Steps should be taken to upgrade CEPA in order to achieve a more mutually beneficial and balanced trade
2. India should also enhance the ease of doing business to attract Korean investors in India
3. India and South Korea should enhance engagements in defence sector through more military exercises and in order to enlarge their partnership beyond economic ties.
4. It is important to strengthened India-South Korea relations to maintain stability in the region.
5. India has also advocated peaceful resolution to the Korean peninsula and also considers it a stakeholder and beneficiary of the Korean peace process. India considers itself as a stakeholder since proliferation linkages between North-East Asia and South Asia is a matter of concern to India