Since the late 1940s, India has emerged from the shadows of colonialism to a sizeable global power of reckoning. Thus, the world has taken notice of India's strong economy with its decent economic development being registered in the past two years amidst a global slowdown. Despite this slowdown Korea-India relations are progressing as the two countries transform from trading partners to a more substantial partnership through joint ventures. Thereby, India is planning to invest US$500 billion over the next five years for the infrastructure sector for roads, power, ports and FEZs. These projects open up huge potential for cooperation between Korea and India.
Bilateral trade relations between Korean and India
Trade and investment flows have traditionally defined the bilateral economic partnership between the two countries. The historic Comprehensive Economic Partnership Agreement (CEPA), which entered into force in January 2010, has contributed to increased trade flows between India and Korea.
India's government has planned an investment of US$1 trillion in infrastructure for the 12 Plan from 2012-2017, of which about US$ 300 billion is allocated to Power industry for generation, transmission and distribution. The private sector is expected to play a major role with 60 percent of allocations to be met through the Public-Private-Partnership model. Some of the Korean power companies are already active in the power sector.
With over one billion-strong consumers, the dynamics of India-Republic of Korea's relationship is changing from trade to investment and to a broader relationship where India offers a huge opportunity in manufacturing, infrastructure development and partnerships for third country projects and joint resource development.
India wants Korean firms to invest in
In June 2008, Prime Minister launched India's National Climate Change Action Plan, intended to devote more attention to renewable energy, water conservation and preserving natural resources. The Government has set a target to provide 10 percent of country's energy through renewable energy including hydro-electric energy. Wind energy is expected to play a notable role by providing 20 GW by 2012.
In April 2009, the National Solar Mission was unveiled by the Prime Minister, which aims to add capacity to the tune of 20 GW by 2020; 100GW by 2030 and 200GW by 2050. Solar energy is expected to provide a major chunk of capacity in energy sector to feed-in tariffs that are already built into the system. And there is no question that Korean companies will be able to take the benefit of the opportunities in solar sector to enter into JVs with Indian companies.
Delhi-Mumbai industrial corridor is another attractive project for establishing many industrial nodes between Delhi and Mumbai encompassing 150 km on both sides of Dedicated Railway Freight Corridor running through six states (Haryana, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh). The project with total projected investment of US$90 billion offers major opportunities for collaboration between Korean and Indian companies.
Nevertheless, there is scope for cooperation between the scientific community in Korea and India. Korea has the enviable reputation for commercialization of technologies while India offers a strong base in basic science with a huge pool of scientific manpower and skilled labor force.
Strengthening the partnership
The world knows that India is the largest democracy with the second highest growth rate for a major economy. It has enjoyed a stable political and legal environment. India has one of the largest pools of scientific and technical human resources to sustain a growth rate of 9-10 percent annually. Korea with its highly advanced and efficient manufacturing base and as the emerging leader in the advanced technology is uniquely placed to take advantage of India's growth story, which will be a win-win situation for both.
More importantly, India has been well recognized as a software giant and enterprises and companies around the world are taking benefit from the value added, low-cost outsourcing model offered by India. The Indian information technology (IT) industry has played a key role in putting India on the path of economic success. The revenues of Indian IT-BPO industry touched US$73.1 billion in 2009-10 comprising 5.8 percent of GDP with Business Process Outsourcing (BPO) accounting for US$12.4 billion and software and services US$60.7 billion. India with a huge pool of engineers doctors, lawyers, management experts, is expected to power the KPO growth story, which in turn this will benefit small and medium enterprises.
The bilateral relations between Korea-India are slowly, but surely progressing from trading partners to a more substantial partnership through joint ventures, as well as manufacture and technological tie-ups. India is hopeful that this year, Korea-India relations will also reach a high pedestal. On this note, the Embassy proposes to organize a seminar on Indian IT Industry on 14 March 2011 which will defiantly open-up partnership opportunities between software companies in Korea and India.
