It’s time for South Korea

South Korea may be known as ‘The Land of Morning Calm’, however, the serene beauty of its landscape camouflages a bustling economy and a high level of entrepreneurial energy and industrial activity, which has powered the nation into a ‘tiger economy’.

Prime Minister Narendra Modi, now in Seoul, will find great shades of similarity between the two vibrant democracies. South Korea’s open market policies, technological advancement and innovation find resonance in India’s pursuit of vigorous economic reforms, industrialisation, and a proactive ‘Act East’ policy, which makes Korea an important partner. There are positive vibes on both sides with Modi and President Park Geun-Hye sharing a commitment on further deepening and expanding bilateral relations.

Anticipating change India is undergoing a transformation reflected in reforms to unify the country into a single market through a Goods and Services Tax, expedite decision-making and clearances, cut red tape, relax labour laws and liberalise foreign investment norms in critical sectors of the economy such as defence, railways, insurance and construction. The three ‘Ds’ that India flaunts — democracy, demography and demand — offer a win-win proposition for those who are eyeing Indian shores.

These dynamics should fit in well with Korea’s changing landscape empowered by Park Geun-hye’s vision to expand the welfare state, raise the potential growth rate of Korean exports, and create jobs for young graduates. Data collected by the Organisation for Economic Cooperation and Development (OECD) shows that the Korean economy is entering an expansionary phase, which would require collaboration with countries like India.

The Comprehensive Economic Partnership Agreement has helped India and Korea register growth in bilateral trade to the tune of about $17 billion. Korean conglomerates have invested more than $1.5 billion in state-of-art facilities in India; Indian companies have used the acquisitions route to establish their presence in Korea with investments worth $3 billion. Korean brands, including Hyundai, LG and Samsung, have taken a firm grip on the Indian consumers’ mindset, especially the youth.

Pushing for more Clearly, there is scope for much more, especially at a time when the Indian economy is registering a growth of 7 per cent with the clear objective of attaining much higher levels over the next few years. Given Korea’s worldwide investment which is estimated to be about $270 billion, there is tremendous potential waiting to be tapped.

Take manufacturing. ‘Make in India’ offers the opportunity to choose from 25 key sectors to set up manufacturing bases in India and use the benefit of an increasingly enabling ecosystem. Korean investments can be instrumental in making India a strong export hub and generate some of the one million jobs that India needs to create every month.

Given India’s huge energy requirements, there is tremendous scope to collaborate with South Korea in areas such as technology transfer relating to super-critical boilers and clean coal technologies, nuclear energy and joint development of LNG ships with established players in South Korea.

India’s other priority is infrastructure. The government has already rolled out a plan of developing 100 smart cities which will require the latest technologies for provision of various social amenities and services.

Mega plans in India include creating a network of new industrial corridors. To develop a high-speed rail network in India, 100 per cent FDI has been allowed in certain segments of the railway sector. Korea can play a crucial role in building world class infrastructure, which can be a game changer in India’s growth story even as it helps South Korea buffer its own growth.

Further, there are opportunities for Indo-Korean partnerships like manufacturing of medical equipment in India on a joint venture basis, collaboration amongst hospitals for exchange of best practices, promotion of medical travel and exchange programmes between medical educational institutions.

The ‘Digital India’ programme puts India on track to enhance digital connectivity for delivery of government services to its citizens. This will mean a higher spend on technology, including internet services, software, data centres, devices and telecom services by local and national governments. This should lure Korean businesses.

People connect Engagement between nations is led by a people-to-people connect and in this context tourism assumes great significance. Since ancient times, Buddhism has been an unbroken link between our two peoples.

The rich cultural heritage of Buddhism in India housed in Bodh Gaya and other places of Buddhist interest open up an enormous potential in tourism. Our friends from South Korea have also been visiting India for ayurvedic treatment even as they enjoy golf at some of the most scenic locations. Indians too have shown deep interest in exploring the rich cultural heritage of South Korea. We must build on these possibilities.

The India-Korea strategic partnership has emerged as a natural corollary of shared values, common interests and ambition to scale higher peaks of growth and development.

It is encouraging that the Korean government has indicated it is time to think ‘big’ and take ‘bold’ initiatives to boost bilateral ties. Both countries need to nurture the convergence of interests to sustain this important relationship.

The writer is the president of Ficci

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