Economic Ties With Seoul Must Be Strengthened

Building on a strong and multifaceted relationship, in 2015, India and South Korea relations were elevated to a "Special Strategic Partnership", reflecting the growing convergence of interests and cooperation.

- NISHA TANEJA AND SANJANA JOSHI

Building on a strong and multifaceted relationship, in 2015, India and South Korea relations were elevated to a "Special Strategic Partnership", reflecting the growing convergence of interests and cooperation. With 2025 marking ten years of this partnership, it is the right time to take stock, reflect on the challenges posed by shifting global supply chains, evolving economic alliances, and increasing geopolitical uncertainties as well as seek new avenues for collaboration between the two 'like-minded' countries.

Bilateral trade increased by 64 per cent from 2015 to 2024, reaching US$ 27.4 billion. However, India's exports to Korea have grown at a modest 4 per cent annually, while imports have risen faster at 6.4 per cent, widening the trade deficit to US$ 15.6 billion. India's top exports to Korea include mineral fuels, aluminum, and organic chemicals, while imports are led by electrical machinery, steel, and plastics.

India's export potential to Korea is vastly underutilized. In 2024, it was estimated at US$ 98 billion - 16 times higher than current export levels. Key areas with high additional export potential include refined petroleum products, medicaments, aluminum, and aircraft parts. Sectors like pharmaceuticals, electrical machinery, and nuclear reactors also present strong opportunities where India has global competitiveness. FDI flows from Korea to India totalled US$ 5.1 billion between 2015 and 2025. On the other hand, Indian investment into Korea has been limited at just US$ 368 million over the same period.