The importance of India in South Korea’s foreign policy has risen in recent years. South Korean President Moon Jae-in’s “New Southern Policy” (NSP) attached primacy to strengthening the country’s economic and strategic relations with India, as well as the countries of Southeast Asia.
It is the first time that South Korea has clearly designed a foreign policy initiative for India and officially documented it. Immediately after President Moon assumed office in May 2017, he sent a special envoy to India; it is an unprecedented move that highlights his government’s desire to shape a new paradigm in Seoul-New Delhi relations. Since then, a number of high-level official delegations have visited India.
The South Korean government has also adopted an action-oriented approach to upgrade its engagement with India. For example, it has set up a state-run research centre on India and the ASEAN countries under the Korea National Diplomatic Academy (KNDA), which is tasked with laying a theoretical foundation for the Moon administration’s policy vision to diversify its strategic partnerships across Asia.
Moreover, South Korean trade officials are implementing strategies to strengthen engagement with India’s market. There are ongoing efforts to create a New Trade Order Strategy Office in the Ministry of Trade, Industry and Energy to intensify trade partnerships with India and the ASEAN countries.
President Moon’s four-day visit to India in July 2018 – the longest by any leader of the two countries – demonstrates this crucial shift in Seoul’s conduct of diplomacy. During that visit, President Moon emphasised that India was the main partner of his NSP and that his government will take all the necessary steps to deepen the strategic partnership.
There is a growing perception in South Korea that China’s rise as an economic power is a ‘threat’ to it, rather than an opportunity.
China emerged as South Korea’s biggest economic partner as their relations normalised after the end of the Cold War. South Korea’s trade and investment relations with China have increased manifold due to its economic liberalisation and the rise of China’s economy. At the same time, its relations with the US and Japan—once the backbone of its economic growth during the Cold War – have declined because of the rise of American protectionism and the stagnation of the Japanese economy. In the early 1990s, South Korea’s exports to the US and Japan constituted more than 55 percent of the total, while that to China was less than one percent.
Indeed, the equations have changed over the past two-and-half decades. China has now emerged as South Korea’s top export destination. It made up 26.6 percent of South Korea’s total exports in the first half of 2018, higher than the 16.5 percent accounted for by the US and Japan combined. If its exports to Hong Kong are included, China’s exports from South Korea rise to 34.4 percent. South Korea is the world’s seventh largest exporter, with its economic growth depending heavily on export activities. China is also South Korea’s top investment destination.
Such economic dependence was not a security concern for Seoul’s policymakers until China began its path of “peaceful rise”. The change began in the late 2000s with the controversy over the origins and legacy of the Koguryo dynasty.
South Korea’s policymakers, and the people themselves, came to believe that Beijing’s claim to a territory which was part of the ancient Korean kingdom reflected China’s imperialist mindset.
Fuelling the dissatisfaction towards China was its stance on the 2010 Cheonan and Yeonpyeong incidents in which many South Koreans were killed by North Korea, and a few years later China’s declaration of a new Air Defence Identification Zone (ADIZ) in 2013 which partly overlapped South Korea and Japan.
Note: -According to a survey conducted in 2006, 58.8 percent of South Koreans viewed China’s economic rise as more of an opportunity, while about 41 percent considered it as a threat. By 2018, the situation had changed, with 71.9 percent of South Koreans viewing China’s rise as a threat and only 18 percent seeing it as a positive development
The negative perception about China worsened when it targeted South Korea’s business interests over the deployment of the US missile system THAAD (Terminal High Altitude Area Defence) in its territory. China tried to exert pressure on Seoul to not allow such deployment and refused to believe that this was in its security interest vis-a-vis North Korea.
South Korean businesses in China were attacked and exports to China were curtailed. This made Seoul realise the need to diversify its trade destinations and look towards other partners such as India and the ASEAN countries.
South Korea’s choice for India is best explained in the words of Trade Minister Kim hyun-chong who said, “India is a country that has no sensitive issues with us geopolitically, so has little risk of its economic cooperation wavering due to external factors. China, for example, created serious problems for our country over the THAAD issue, but with India there are no such variables.”
In 2017, the country’s trade with India stood at US$20 billion, while that with China was 14 times higher at US$281 billion. During President Moon’s 2018 visit to India, he urged the business communities of both sides to raise the trade volume to US$50 billion in the next 10 years.
The South Korean companies in India, such as Samsung, LG Electronics and Hyundai Motor, are undertaking expansion activities. During President Moon’s visit, he and Prime Minister Narendra Modi inaugurated Samsung’s refurbished factory in Noida which is expected to be the company’s largest mobile phone production unit anywhere in the world.
The LG Electronics, which has two manufacturing units in India, also wants to make India its export hub.
Other measures being taken by the Moon administration include setting up a New Trade Order Strategy Office, as well as pushing the conclusion of the emerging regional trade mechanism called Regional Comprehensive Economic Partnership (RCEP) agreement in which India is a member.
The India-South Korea Comprehensive Economic Partnership Agreement (CEPA), signed in 2009, is being revived and the Ministry of Trade has held a number of meetings with their Indian counterparts to review its progress. The Moon-Modi summit of July 2018 finalised the ‘Early Harvest Package’ that would lead to an upgrade of the CEPA engagement.
In addition, the Moon administration has decided to establish the Korea-India Future Strategy Group and the India-Korea Centre for Research and Innovation Cooperation (IKCRI). The latter is expected to provide an institutional framework for cooperation based on research, innovation and entrepreneurship
For its part, the Indian government is taking measures to enhance South Korean investment. It has created, for example, a ‘Korea Plus’ mechanism under the Department of Industrial Policy & Promotion (DIPP) to boost the presence of South Korean companies in India.
Several new initiatives are being taken to foster closer people-to-people ties through youth exchange programmes, internships, and facilitation of tourism and business through simplified visa procedures.
India’s significance for South Korea is growing primarily because of the latter’s deepening strategic dilemma with China – its largest economic partner. South Korea’s shifting perception about its economic engagement with China has influenced Seoul’s strategy towards other Asian powers. Against this background, policymakers in Seoul see India as a crucial partner and their government is taking various steps to upgrade ties under their new policy framework called the NPS.
India needs to take advantage of this opportunity. South Korea can be a major economic partner in India’s economic growth. After all, South Korea, which is Asia’s fourth largest economy, has become one of the fastest growing economies in the world in recent years. South Korean companies are expanding and looking for new investment opportunities in emerging economies. They consider a rising India a good destination for their investment-related activities. Whereas existing South Korean companies in India are expanding their businesses, a large number of new companies are seeking to enter the India market as soon as possible. India must use this opportunity to enhance the presence of South Korean companies in India.
India should also pay particular attention to developing its strategic relations with South Korea. Such engagement with Seoul will also enhance New Delhi’s strategic leverage, especially in the Indo-Pacific region. As India is facing pressure from China in South Asia due to the ‘string of pearls’ strategy, India should design a similar type of strategy in East Asia. In this regard, New Delhi must nurture its relations with Seoul just as it has done with Tokyo in recent years. India and South Korea, two leading democracies in Asia, are natural partners and should closely work together to foster peace and stability in the region.