India-South Korea Relations

In News

• Recently, India and South Korea aimed to achieve the trade target of USD 50 Billion before 2030.

Minutes of the Recent Meeting

• The Ministers of both nations held wide ranging discussions covering the whole gamut of Bilateral Trade and Investment related aspects. 
• The Ministers agreed to impart fresh momentum to the discussions on Comprehensive Economic Partnership Agreement (CEPA) up-gradation negotiations and also promote  extensive B2B  interactions  on trade and investment between the industry leaders of the two countries.  
  • Both sides were instructed by respective negotiating teams to meet on a regular basis in order to conclude the  CEPA up-gradation negotiations as soon as possible in a time bound manner. 
• They agreed with the spirit of openness to address difficulties expressed by industry from both sides 
• It will be built upon support from relevant stakeholders, so as to try to achieve the target of USD 50 Billion before 2030 which was agreed at the summit meeting in 2018. 
• These regular negotiations shall be a forum to discuss the difficulties of the business community from both countries and emerging trade-related issues.
• Employment possibilities for English teachers and IT professionals also were on agenda.

Issues Highlighted

• Difficulties the bovine meat exports are facing in South Korea. 
  • South Korea has been insisting that India should get a clearance from the World Organisation for Animal Health. 
  • India’s statement in response: The meat is being exported to several countries like Mauritius, Brunei, the Maldives, Seychelles and the Philippines and there are no complaints regarding the foot-and-mouth disease from them.
• Supply chain resilience is a big hurdle in expansion of bilateral trade numbers.
• India had raised the need to expedite the process to facilitate export of grapes, pomegranate arils and eggplants. The request has been pending for more than a decade with the Korean side. 

CEPA between India and South Korea

• About: 
  • The Comprehensive Economic Partnership Agreement (CEPA) is a free trade agreement between India and South Korea. 
• Signed on: 
  • The agreement was signed on August 7, 2009.
• Benefits of the agreement:
  • It is equivalent to a free trade agreement.
  • The agreement will provide better access for the Indian service industry in South Korea. 
  • Services include Information technology, engineering, finance, and the legal field.
  • South Korean car manufacturers will see large tariffs cut to below 1%.
  • The agreement will ease restrictions on foreign direct investments. 
  • Companies can own up to 65% of a company in the other country.
  • Volume of trade has only increased since the agreement was signed.
• Problem:
  • Korean corporations have flooded India with cheaper imports of raw metal, steel and finished products.

India – South Korea Relations

• Political:
  • In May 2015, the bilateral relationship was upgraded to ‘special strategic partnership’.
  • India has a major role to play in South Korea’s Southern Policy under which Korea is looking at expanding relations beyond its immediate region.
  • Similarly, South Korea is a major player in India’s Act East Policy under which India aims to promote economic cooperation, cultural ties and develop strategic relationships with countries in the Asia-Pacific.
• Regional Stability:
  • The regional tensions in South Asia especially between India and China create a common interest for India and South Korea.
  • This could be a collaborative approach for regional stability.
• Nuclear: 
  • South Korea’s key interest in managing their nuclear neighbour (North Korea) is similar to India’s considerations toward Pakistan.
  • The US alliance system, established with South Korea and Japan, puts pressure on North Korea to cap its nuclear programme.
  • Containing North Korea is beneficial to India’s economic and regional ambit in East Asia.
  • It also adds to its approach to the nuclear non-proliferation regime as a responsible nuclear state.
• Economic:
  • The current bilateral trade between India and South Korea is at USD 21 billion and the target that has been set is USD 50 billion by the year 2030.
  • India and South Korea have signed the Comprehensive Economic Partnership Agreement (CEPA), 2010 which has facilitated the growth of trade relations.
  • To facilitate investment from Korea, India has launched a “Korea Plus” facilitation cell under ‘Invest India’ to guide, assist and handhold investors.
• Diplomatic:
  • There is a long-lasting regional security dilemma with the continued verbal provocations and a conventional arms race.
  • Thus, despite the alliance system, Seoul appears to be searching for a stronger diplomatic stand on imminent regional issues beyond the alliance system.
  • South Korea’s approach to India comes with strategic optimism for expanding ties to ensure a convergence of interest in planning global and regional strategic frameworks.
• Cultural:
  • Korean Buddhist Monk Hyecho or Hong Jiao visited India from 723 to 729 AD and wrote the travelogue “Pilgrimage to the five kingdoms of India” which gives a vivid account of Indian culture, politics & society.
  • Nobel Laureate Rabindranath Tagore had composed a short but evocative poem – ‘Lamp of the East’ – in 1929 about Korea’s glorious past and its promising bright future.

Challenges

• Stagnation in Economic relationship:
  • The economic partnership is struck at $22 billion annually. 
  • Also, the defence partnership appears to have receded from great all-round promise to the mere sale and purchase of weapon systems. 
• Cultural Prejudices on both sides preventing people-to-people ties
  • Cold War Era perception: There may be a widespread perception among South Koreans of India as a third world country, rife with poverty and hunger.? 
  • Indian Diaspora: Within South Korea, the integration of Indians in the local population is far from complete, with some instances of racial prejudice or discrimination toward Indians 
  • Inadequate acknowledgment of Korean Culture: To a certain extent Indians are unable to distinguish between the cultural and social characteristics of South Koreans from that of Japanese/Chinese. 
• Unfulfilled potential of Cultural Centres
  • Indian Culture Centre (ICC) was established in Seoul 10 years ago?to promote people-to-people contacts. 
  • However, ICC has to reach an exponentially wider audience and its focus has to expand beyond the urban, English-speaking elite of Seoul.  
  • The same may be applicable to South Korean culture centres in India. 

Conclusion

• India-Republic of Korea (RoK) relations has made great strides in recent years and has become truly multidimensional.
• The bilateral relations are spurred by a significant convergence of interests, mutual goodwill and high-level exchanges.

Source: PIB