South Korea and India celebrated the 40th anniversary of the establishment of diplomatic relations last year. Three years earlier, the two countries signed a comprehensive economic partnership agreement, setting up a major framework for further boosting trade and investment ties.
It can still hardly be said that the third- and fourth-largest economies in Asia have achieved the fullest potential of mutual cooperation. Bilateral trade volume increased from $15.5 billion in 2008 to $20.6 billion in 2011 before sliding back to $18.8 billion in 2012, according to statistics from the Korea International Trade Association. The corresponding figure remained at $16.1 billion from January-November last year.
It may be more accurate to say that South Korea and India have yet to put a full-fledged effort toward maximizing their partnership in a diversity of fields. President Park Geun-hye’s state visit to India this week is expected to provide a critical momentum to accelerate such endeavors.
Park, who arrived in New Delhi on Wednesday accompanied by a 70-member business delegation, is to hold summit talks with Indian Prime Minister Manmohan Singh on Thursday to discuss ways to expand and deepen bilateral ties.
Presidential aides have portrayed Park’s four-day trip to India, which will be followed by her state visit to Switzerland, as part of her active sales diplomacy. The immediate focus may well be put on further widening and facilitating Korean businesses’ access to the massive market of the world’s second-most populous country with 1.2 billion people. Korean companies are poised to cooperate with and benefit from New Delhi’s policies to nurture manufacturing and improve infrastructure facilities, including power plants.
The two sides can also enhance their partnership in information technology, aerospace and other high-tech industries, where India has global competitive advantages. Seoul may have to give more serious consideration to India’s hope to become a partner in South Korea’s space program on the strength of its sophisticated rocket launch technology, which could be offered at a much lower cost than is demanded by competitors.
In a move apparently timed for Park’s visit, the Indian government last week approved a South Korean steelmaker’s long-delayed plan to build a $12 billion plant, though local environmentalists have vowed to keep up their fight against the project, which represents the largest-ever foreign direct investment in India.
In a departure from near-double-digit expansion during its boom years, India’s economy grew at a decade low of 5 percent in 2013, due in part to high interest rates that have dampened investment and spending. Many experts have forecast that its growth rate for this year will be further down in the 4 percent range.
But these figures should not be allowed to undermine the prospects for the South Asian giant, with its growing middle class and a huge population whose average age remains at just 25. According to estimates by the Organization for Economic Cooperation and Development, India will account for 18 percent of the global gross domestic product by 2060, to become the world’s second-largest economy after China, if it maintains the average annual growth rate at 4.9 percent over the decades to come.
India’s society and economy may also become more vibrant and transparent if mounting calls for anticorruption reforms are reflected in the outcome of the general elections due by May. Such changes would serve to further galvanize ties between South Korea and India in political, social and cultural areas beyond economic domains. The two countries could also become geostrategic partners, with India supporting South Korea’s stance on inter-Korean matters and Seoul throwing its weight behind New Delhi’s balancing role in the Asia-Pacific region.
It is hoped that President Park’s choice of India as the destination of her first overseas trip in 2014 will facilitate the two countries’ navigation through their diplomatic blue ocean, with no waves of conflicting interests and a bright horizon for complementary cooperation.