A New Stride in India-South Korea Relations
Photo Credit: IndiaTVNews
By Rishi Gupta

A New Stride in India-South Korea Relations

Jul. 24, 2018  |     |  0 comments


The President of the Republic of Korea (ROK), Moon Jae-in, was in New Delhi for his first state visit to India from July 8-11, 2018, as part of his wider Asia-Pacific trip under the umbrella of Moon administration’s New Southern Policy. The visit gave important momentum for the forty-five-year relationship between India and the ROK. With deep-rooted multi-sectoral cooperation — especially in the areas of trade, security, energy, and counterterrorism — this relationship saw remarkable development in 2010 after the two countries agreed on “special strategic cooperation … based on shared universal values of democracy, free market economy, the rule of law, common commitment to a peaceful … and rules-based region.” South Korea was one of the very few countries to have joined India in its process of economic development after India opened up its economy in 1991 and South Koea continues to be an “indispensable partner” in India’s Act East policy.

 

The visit took place at a time when global attention has shifted towards the Korean Peninsula for its diplomatic vibrancy and innovations, symbolized by the recent meeting between Moon and North Korean leader Kim Jong-Un in April, followed in June by the historic meeting between US President Donald Trump and Kim in Singapore, in an effort to lessen the tensions arising out of North Korea’s nuclear proliferation program. As the nuclear “proliferation linkages of Northeast and South Asia are also a cause of concern for India,” the visit reflected a timely role that India wish to play towards regional peace.

 

During the talks, Indian Prime Minister Narendra Modi categorically “pledged to work together to prevent the proliferation of weapons of mass destruction and delivery systems, particularly to terrorists and non-state actors.” Meanwhile, Modi credited Moon for his efforts in accelerating the “peace process in the Korean Peninsula, keeping it on track, and its progress.” Further, on the strategic front, India and the ROK agreed to partner in achieving a long-sought peace in Afghanistan. India is already a party in Afghanistan’s peace-process, and a tripartite partnership with the ROK for capacity-building in Afghanistan will consolidate India’s goodwill position in Asia.

 

A common platter of shared concerns and priorities over the “Beijing nexus” brings the two closer. While India and China stand head to head on the border issue and the ROK having experienced an all-time low with China after the ROK had hosted the US’ Terminal High Altitude Area Defense (THAAD) in 2017, the visit helps to sketch-out of a broader Asian strategy for the two.

 

The vision document, jointly released by Moon and Modi, emphasizes exploring “further possibilities to coordinate efforts in the defence and strategic spheres in order to benefit from each other’s unique capabilities and experience. In this context, ROK and India will enhance military exchanges, training and experience-sharing, and research and development, including innovative technologies for mutual benefit.” India and the ROK agreed to encourage their defence industries to intensify their cooperation. However, in January, a defence deal with a South Korean company worth USD 5 billion, to provide design and technology transfer for 12 mine countermeasures vessels (MCMV), was terminated by the state-owned Goa Shipyard Company due to price differences and terms compliance.



India and the ROK “agreed to expand bilateral trade, including through the early conclusion of ongoing negotiations to upgrade the ROK-India Comprehensive Economic Partnership Agreement.”



India and the ROK, which rank as the third and fourth largest economies respectively in Asia, have a total bilateral trade of more than USD 20 billion and the two plan to achieve a USD 50 billion mark by 2030. Top Korean companies — Samsung, LG, and Hyundai Automobiles — are household names in India, and in line with the Modi administration’s Make in India initiative, these companies have contributed towards the initiative with huge investments. The inauguration by Moon and Modi of Samsung’s mobile phone manufacturing unit in the National Capital Region — one of Samsung’s the largest mobile phone manufacturing units in the world — is a significant step in this regard. 


Calling it a pride-partnership, Modi acknowledged the outcomes of the role played by Korean companies in creating jobs and providing business opportunities to Indian youth. For Samsung, which has seen a sharp decile in a lucrative smartphone market in India due to Chinese brand Xiaomi overtaking Samsung’s 23 percent share in the last quarter of 2017, a unit with a capacity to manufacture 10 million phones every month is a key footstep in overhauling Samsung’s lost market.


Furthermore, “out of USD 6.8 billion cumulative investment that has taken place from Korea, more than USD 3 billion has actually come in the last three years alone,” which shows a positive equation shared by the present Modi administration with the ROK. More importantly, India and the ROK “agreed to expand bilateral trade, including through the early conclusion of ongoing negotiations to upgrade the ROK-India Comprehensive Economic Partnership Agreement (CEPA)” which was signed in 2010. Hence, an Early Harvest Package that would lead towards an upgraded CEPA marks a new dawn in trade cooperation between a bigger Indian market and Korean capital prowess. However, the visit did not highlight clarity on the execution of the planned USD 12 billion investment by Korean steel giant Posco in the Indian state of Orissa which has been marred by protests and environmental concerns since 2005.


Maritime security was another highlight of the visit. With the aim to increase their global trade and keep the fuel supplies through Sea Line of Communications in order, India and the ROK focused on freedom of navigation, especially in the South China Sea, and they jointly called for the “peaceful resolution of conflict through dialogue, underlying the centrality of sovereignty and territorial integrity, in accordance with the universally-recognised principles of international law.”

Overall, the visit will be seen as a remarkable stride in strengthening ROK-India cooperation on trade and investment. Also, even as the thaw between the ROK and China deepens, a move towards India can provide an alternative market for Korean manufacturers. For India, the visit proved to be a significant event as it meaningfully utilized the platform in clearing its stand on the ongoing talks on the denuclearization of the Korean peninsula as well as in conveying its future role in the East Asian region.



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