Ties with India grow stronger
As investments between India and South Korea grow, the Korean Peninsula is seeing an influx of business professionals from the economic giant to the west.
“Korea-India bilateral economic, commercial and investment relations are now embarking upon an exciting journey,” said Sachin Satpute, vice president of sales and marketing for Novelis Korea.
Satpute, one of this growing population of Indian businesspeople in Korea, points to the newly strengthened economic ties between the two countries.
“Recently, the Indian Chamber of Commerce in Korea was launched in Seoul, and it is expected to provide a much needed forum for networking, representing and advocating for Indo-Korean business in Korea. Given this country’s move toward a ‘Global Korea’, the timing of the ICCK [launch] is appropriate to encourage Indian investments in Korea.”
Novelis Korea, Asia’s leading manufacturer of aluminum rolled products, is an example of the growing economic cooperation between India and Korea. With advanced production facilities in Yeongju, North Gyeongsang, and the southeastern city of Ulsan, the company employs 1,200.
According to the Foreign Ministry in Seoul, bilateral trade has seen a rapid increase since 2003. As of 2008, India was the 10th largest importer of Korean goods, and 16th largest exporter to Korea.
The volume of bilateral trade was recorded at about $15.6 billion in 2008, up from $4.1 million in 2003. Korea’s major exports are cars, refined petroleum products, communications equipment and ships, while India mainly exports oil, metals, textiles and other natural resources.
Korean conglomerates have steadily invested in India and the ministry said the total investment made until the end of 2008 was $2.16 billion. In contrast, only small investments by Indian businesses were made in Korea.
“On the other hand Indian investment in Korea is in the fields of autos, metal processing and IT. Ideally Indian software and Korean hardware can make a good combination. The Indian investment is in its initial phase,” he added.
As economic ties progress between the two countries, two landmark developments took place this year. The first was the Comprehensive Economic Partnership Agreement signed in January this year. President Lee Myung-bak, who timed a visit to India with the launch of the extensive bilateral trade deal, and Indian Prime Minister Manmohan Singh set a goal of increasing bilateral trade to $30 billion by 2014 based on the pact.
Another important milestone was the launch of the Indian Chamber of Commerce in Korea also in January.
“There are around 12 Indian companies actively operating in South Korea,” said Muanpuii Saiawi, third secretary at the Indian Embassy in Seoul.
One of the 12 is Tata Consultancy Services, Saiawi said. The biggest IT services firm of India by sales, TCS has a regional office in South Korea. According to Saiawi, TCS began operations in 2003 in Korea to serve local customers as well as global multinationals operating in Korea.
Creative Plastic of India invested $2 million in Korea in 2008 and launched Alchemy Mold & Plastic Ltd. in Pyeongtaek, Gyeonggi, Saiawi said.
The best known investment made by India in Korea is Tata Motors’ acquisition of Daewoo Commercial Vehicle. Tata Motors took over Daewoo Commercial Vehicle at the price of 120 billion won ($106 million) and Tata Daewoo Commercial Vehicle Company has become the second largest manufacturer and marketer of heavy and medium commercial vehicles in Korea.
Tata Daewoo employs about 1,300 workers in Korea and exports to 40 countries around the world, the company said.
It won the 200 Million Dollar Export Tower Award from the Korean government at the end of 2008, recording an average annual growth rate of 60 percent since 2004.
By Ser Myo-ja [firstname.lastname@example.org]