{"id":2201785,"date":"2023-07-25T17:30:42","date_gmt":"2023-07-25T08:30:42","guid":{"rendered":"https:\/\/koreapro.org\/?p=2201785"},"modified":"2023-07-26T19:19:34","modified_gmt":"2023-07-26T10:19:34","slug":"how-indias-economic-rise-portends-a-new-era-of-indo-korean-relations","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/07\/how-indias-economic-rise-portends-a-new-era-of-indo-korean-relations\/","title":{"rendered":"How India\u2019s economic rise portends a new era of Indo-Korean relations"},"content":{"rendered":"
India is projected to become the third-largest economy globally by the end of the decade, surpassing Germany and Japan, according to <\/span>Morgan Stanley<\/span><\/a>, and it is <\/span>expected to overtake<\/span><\/a> the U.S. by 2075. This global economic shift brings to the fore a significant potential for strengthening strategic partnerships, particularly with South Korea.<\/span><\/p>\n However, this prospective partnership is contingent upon a mutual understanding and practical realization of each other\u2019s potential, coupled with strategic actions from both governments.<\/span><\/p>\n India\u2019s rapid growth, the fastest among emerging markets and developing economies, is anticipated to continue in the foreseeable future. This pace was corroborated by the World Bank in its <\/span>Global Economic Prospects 2023 report<\/span><\/a>. The international financial institution forecasts India\u2019s economic growth at 6.3% in the fiscal year 2023-24, followed by slightly faster growth of 6.4% in 2024-25.<\/span><\/p>\n These projections gain added significance against the backdrop of the U.S.-China trade friction, which is starting to constrict the global economic environment. The ripple effects of this geopolitical strain are being felt in economies closely linked to these powers, such as South Korea. In particular, South Korean <\/span>exports<\/span><\/a> to China in sectors such as electric vehicles (EVs) and semiconductors have been negatively impacted.<\/span><\/p>\n Caught in the crossfire of escalating U.S.-China trade tensions, South Korea is actively seeking partners in the Indo-Pacific region. In this regard, India, given its rapidly ascending economy, emerges as an appealing candidate.<\/span><\/p>\n FULL POTENTIAL<\/b><\/p>\n South Korea\u2019s automotive success in India offers a compelling case study. This year, India surpassed Japan, becoming the <\/span>third-largest auto market<\/span><\/a> globally, with 4.25 million cars sold. Hyundai and Kia, two South Korean automakers, have carved out a significant share in this challenging market. Both companies rank in the <\/span>top five<\/span><\/a>, commanding 14.54% and 5.98% of India\u2019s auto market share, respectively.<\/span><\/p>\n Entering India in 2019, Kia marked a significant milestone by reaching <\/span>one million car productions<\/span><\/a>, a testament to its adaptability to Indian consumers and market requirements. Following its success in the internal combustion engine segment, its strategy aligns with the Indian government\u2019s <\/span>target<\/span><\/a> of achieving 70% EV sales for commercial vehicles and 30% for privately-owned cars.<\/span><\/p>\n This year, Hyundai pledged to <\/span>invest<\/span><\/a> $2.45 billion in the EV ecosystem, with Kia <\/span>announcing<\/span><\/a> a $2 billion commitment to R&D, manufacturing and infrastructure development. As per a Bain & Co <\/span>report<\/span><\/a>, by 2030, EVs will comprise 15 to 20% of the passenger vehicle market share.<\/span><\/p>\n South Korea elevated its relations with India to a special strategic partnership during the Park Geun-hye administration. The objective was to diversify ties, emphasizing the defense, technology and energy sectors.<\/span><\/p>\n The following Moon Jae-in administration further bolstered this bond by expanding diplomatic and economic ties under his New Southern Policy. In 2018, both nations <\/span>agreed<\/span><\/a> to increase trade levels to $50 billion by 2030, underlining the importance of solid economic ties.<\/span><\/p>\n