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Local Indian Chamber of Commerce launches

Published: 22 Jan. 2010, 20:01

Tata Daewoo CEO Kim Jong-shik, third from right in the front row, and Korean Finance Minister Yoon Jeung-hyun, on his right, celebrate the opening of the Indian Chamber of Commerce in Korea on Jan. 19 at the Shilla Hotel in Jangchung-dong, central Seoul. Kim was named chairman of the new organization. [YONHAP]

Amid growing business ties between Korea and India in recent years, the Indian Chamber of Commerce in Korea launched on Tuesday.

“Trade between the two countries has increased almost 100 percent during the last three years, and in 2008 [the volume of bilateral trade] recorded about $15 billion,” said Kim Jong-shik, 55, chairman of the Indian chamber and chief executive of Tata Daewoo Commercial Vehicle Company. Aggregate investment has also risen steadily to reach $ 2.6 billion at the end of last year.

“Around 380 Korean companies are currently doing business in India. And Indian companies including the Tata Group and the Aditya Birla Group are actively and successfully investing in Korea,” he said, adding that it is timely that the organization is launched as it will bridge businesses and corporations between the two countries in many ways including political, cultural and trade promotion.

The Tata Daewoo company in particular has been separated from the now defunct Daewoo Motors and has its headquarters in Gunsan, North Jeolla. Tata Motors, India’s leading automobile company established in 1945, invested 100 percent in the company, which is now Korea’s second-largest commercial vehicle maker.

The company can produce more than 20,000 vehicles a year including various sized trucks.

Meanwhile, the closer relations between Korean and Indian businesses is in part due to the bilateral agreement the two signed last year called the Comprehensive Economic Partnership Agreement. CEPA has become operational from this month and so far has been encouraging businesses in each country to invest more freely in the other nation.

As of now, Hyundai Motors, as well as many other Korean companies including LG Electronics, Samsung Electronics and Posco, has built a plant near the Chennai area in India and they have plans to increase the level of investment in India further in upcoming years.

On the other hand, India’s Tata Group with the automobile unit has been investing in Korea by producing commercial vehicles for the Korean market.

“Despite such a rapid increase in bilateral trade and investment, there are still large areas of cooperation for further growth, considering the size of both economies,” said Finance Minister Yoon Jeung-hyun.

At the launching ceremony in a hotel in central Seoul, the minister called for stronger economic cooperation by expanding industrial cooperation, infrastructure such as roads, railways, telecommunication networks, power generation and ports, and science and technology such as the aerospace industry.

“Cooperation in the private sector needs to be made in industrial areas where either country has competitive advantage,” Yoon said. “Korea can boast of its advantage in manufacturing industries, while India has strength in knowledge and service industries.”

For example, while Korea has competitiveness in manufacturing information communication technology devices or equipment, India has an advantage in IT-related services provided by highly skilled professionals in software, according to Yoon.

“Given this advantage, both economies are well poised to profit from producing a tremendous synergy effect,” Yoon said.

Meanwhile, the Korea Chamber of Commerce and Industry also welcomed the establishment of the new Indian chamber, which has around 100 members so far.

“The establishment of the chamber comes at a very important time,” said KCCI Chairman Sohn Kyung-shik, representing the Korean business community. The chamber, established in 1884, now has more than 120,000 member companies.

“India and Korea have developed friendly and cooperative ties since establishing a diplomatic relationship in 1973, and the ties have been growing in recent years,” he said, noting that the new chamber shows the desire for stronger and friendlier cooperation between the two countries.

Indian Ambassador Skand Tayal also noted that “the Indian market will be even more accessible to the Korean consumers.”

He called on businesses and industries to look at India’s strengths in information technology, pharmaceuticals services and other areas so that the CEPA could create a balanced and sustainable growth of trade and investment for mutual benefit.

Meanwhile, President Lee Myung-bak is expected to leave for India tomorrow. During his four-day stay, he will discuss with the Indian leadership ways to take the bilateral partnership to a higher level.

He is also expected to be the chief guest at India’s Republic Day celebrations this year. The president will also meet with business leaders in New Delhi, India’s capital.

By Lee Eun-joo [[email protected]]