Embassy of India

Embassy of India

Seoul 

*****

Brief on India-Korea Economic and Commercial Relations

1.Overview: The trade and economic relations between India and Republic of Korea (Korea) have gathered momentum in recent years with annual bilateral trade reaching US$25.6 billion in 2025 (as per data from Korea International Trade Association). The bilateral Comprehensive Economic Cooperation Agreement (CEPA), set in place since 2010, has spurred the trade and investments both ways. In 2025, Korea’s investment to India recorded US$824 million. Korea’s total FDI to India from 1980 up to December 2025 stands at US$10.29 billion. Investments from India to Korea are to the tune of approx. USD 5.2 billion led by Tata Daewoo and Aditya Birla Group (Novelis).

Bilateral economic ties received a visible boost from the visit of Prime Minister Narendra Modi to the Republic of Korea from 18-19 May 2015, and more recently with the Korean President’s State visit to India in April 2026, after 8 years. 

Korean President’s State Visit to India in April 2026: During the Summit meeting in April 2026, India and ROK agreed to establish their first ministerial-level economic cooperation platform, the "Industrial Cooperation Committee," and to expand the annual trade volume from the current USD 25 billion to USD 50 billion by 2030. The two sides announced broadening of cooperation beyond existing economic ties to cover strategic industries such as critical minerals, nuclear power, clean energy, artificial intelligence (AI), shipbuilding, and finance. A Business Forum led by Federation of Korean Industries (FKI) and FICCI from both sides was held in New Delhi during the Summit, which saw the participation of around 600 Korean and Indian companies, including Samsung Electronics, Hyundai Motor Group, LG, POSCO Holdings, HD Hyundai and others, and signing of 20 private MoUs in areas such as shipbuilding, digital, and energy.

A number of MoUs were signed during the visit including the industrial cooperation committee, for port cooperation, steel supply chain, SMEs, for digital payment integration, for mutual cooperation between International Financial Services Centres Authority (IFSCA) and Financial Supervisory Services and Financial Services Commission, and cooperative Approach under Article 6.2 of the Paris Agreement.

3. Status of Korean Economy and Synergies with India: Over the past six decades, the Republic of Korea has transformed from one of the world's poorest economies into a leading export-oriented industrial nation. Korea's nominal Gross Domestic Product (GDP) reached KRW 2,663.3 trillion (approximately USD 1.87 trillion) in 2025, making it one of the world's largest economies, while its Gross National Income (GNI) per capita increased to USD 36,855. According to the Bank of Korea, the Korean economy continues to be driven primarily by the services sector (approximately 62%), followed by manufacturing (approximately 27%), with construction, utilities, and agriculture accounting for the remaining share of economic output. Despite its heavy dependence on imported energy and natural resources, including crude oil, liquefied natural gas, and critical minerals, Korea has built a highly competitive export-driven economy through technological innovation and advanced manufacturing. Korea became the 29th member of the Organisation for Economic Co-operation and Development (OECD) in 1996. In 2025, Korea's exports reached a record-high USD 709.7 billion, surpassing the USD 700 billion mark for the first time and increasing 3.8% year-on-year, reaffirming its position as one of the world's leading trading nations.

More than 40% of Korea's exports are destined for its three largest trading partners—China, the United States, and ASEAN—with China and the United States remaining the two largest individual export markets. Other major trading partners include the European Union, Japan, Taiwan, India, Hong Kong. Korea's foreign exchange reserves stood at USD 428.1 billion at the end of 2025, ranking ninth largest in the world (Source: Bank of Korea). Korea is also one of the world's leading manufacturing economies, maintaining its position as one of the world's largest shipbuilders while ranking among the global leaders in semiconductors, automobiles, batteries, and consumer electronics. As a major automobile manufacturing nation, Korea produced approximately 4.1 million vehicles in 2025, remaining among the world's top automotive producers. (Source: Ministry of Trade, Industry and Resources)

India and ROK, having pursued different economic paths for development since their independence, currently share considerable synergies. ROK is an export-driven economy and is drawn by India’s huge market. ROK developed considerable expertise in shipbuilding, steel, nuclear energy, heavy electrical machinery etc. and is keen to invest in India in these areas. Similarly, ROK wants to take advantage of India’s prowess in IT software and to combine it with its expertise in IT hardware, designing, engineering and manufacturing. However, India has to diversify its export market, particularly focusing on high-tech products in addition to primary goods, if it has to penetrate the Korean import market. Even in textiles and garments where India used to have an edge, ROK has closed the gap and is exporting its own finished products to overseas markets. It is encouraging that the two countries are exploring commercial opportunities in space, defense and nuclear energy areas.

4.Bilateral Trade:India is Korea’s 16th biggest source for imports and 7th biggest export market as of 2025. In the last four decades, the pattern of Korean exports has undergone significant transformation. Exports moved up the value chain from primary goods to light industrial products, to heavy industrial, high-tech and knowledge-based products. One barrier that India faces is Korea’s restrictive policy towards import of primary agricultural products such as fruits and vegetables. These matters are being discussed in the annual CEPA review meetings. There is also a need for diversification of the export products which at present are driven by petrochemical products, mainly Naphtha.

As per statistics published by Korea International Trade Association (KITA), the bilateral trade between Korea and India is as under:

5. Major items of India's exports to Korea include light oils and preparations / mineral fuel distillates (mainly naphtha) (HS Code: 27), unwrought aluminum (HS Code: 76), iron and steel products (HS Code: 72), refined lead (HS Code: 78), ores and concentrates (HS Code: 26), and cereals (HS Code: 10). Basic industrial raw materials continue to account for the bulk of India's exports to Korea, with naphtha (HS Code: 27) remaining the single largest export item. Korea imported approximately USD 6.4 billion worth of goods from India in 2025, and naphtha continued to account for around one-fifth (20–21%) of Korea's total imports from India. Other major imports included unwrought aluminum (HS Code: 76), ferro-chromium and other iron and steel products (HS Code: 72), refined lead (HS Code: 78), and agglomerated iron ore and concentrates (HS Code: 26). These products continue to play an important role in supporting Korea's petrochemical, automotive, steel, and manufacturing industries.

6. Korea's main exports to India include semiconductors (HS Code: 85), machinery and mechanical appliances (HS Code: 84), iron and steel products (HS Code: 72), electrical machinery and equipment (HS Code: 85), automobile parts and vehicles (HS Code: 87), petroleum products (HS Code: 27), plastics and petrochemical products (HS Code: 39), and optical, precision and medical instruments (HS Code: 90). Korea's exports to India reached a record high of approximately USD 19.2 billion in 2025, driven primarily by strong demand for semiconductors (HS 85), machinery (HS 84), and steel products (HS 72). Semiconductors remained the largest export category, supported by the rapid expansion of AI-related memory demand, while exports of machinery, automobile parts, electrical equipment, and steel products also recorded solid growth. Although petroleum products (HS 27) and petrochemical products (HS 39) continue to account for a significant share of Korea's exports to India, the overall export structure has become increasingly diversified toward higher value-added manufacturing and technology-intensive products.

7. Comprehensive Economic Partnership Agreement (CEPA): Korea and India signed Comprehensive Economic Partnership Agreement in Seoul on 7 August 2009 and was operationalized with effect from 1 January 2010. CEPA is Korea’s first free trade agreement with a member of the BRICS countries. The trade deal, which came after negotiations of more than three years and twelve rounds, commits the two countries to lowering or eliminating import tariffs on a wide range of goods over the next 8 years, and helps expand opportunities for investments and trade in goods as well as services. Korea was to phase out or reduce tariffs on 90 percent of Indian exports while India would phase out or cut tariffs on 85 percent of Korean exports.

8. Financial Sector Cooperation:Six Korean Banks have overall 18 branches in India. These include KEB Hana, Kookmin, Shinhan, Woori, Nonghyup and IBK. KEB Hana Bank and Korea Development Bank are in the process of opening 2 branches and 1 representative office each respectively in India, and these are to open in 2026. KB Kookmin Bank opened its 2 new branches in Chennai and Pune in October 2025. Woori bank opened its 2 branches in India in September 2024. KB Securities opened its office in Mumbai on December 1, 2025. Korea Investment Corporation [KIC], the sovereign national fund of ROK, opened its first branch in India [Mumbai] in April 2024.

During the State visit of the Korean President to India in April 2026, an inaugural edition of ‘ROK-India Financial Cooperation Forum’ was held with the participation of financial authorities and institutions from both countries, including FSC, CIFC, KFTC, SEBI, IFSCA and others to strengthen cooperation in the financial sector, including banking, capital markets and fin-tech.

9. Joint Committee:Joint Committee at the Ministerial level, headed by the Ministry of Commerce and Industry, India and the Korean Ministry of Trade, is in place to undertake an annual review of CEPA implementation. The first meeting of the Committee was held in New Delhi on 20 January 2011. Mr. Kim Jong-Hoon, Minister for Trade, and Mr. Anand Sharma, Minister of Commerce and Industry, co-chaired this meeting. It was agreed to establish a Joint Committee at the JS/DG level (Joint Secretary level for India and Director General level for Korea) also to assist the Ministerial Joint Committee in ensuring the effective operation and implementation of CEPA. As agreed during the visit of Prime Minister Narendra Modi to ROK in May 2015, the Joint Committee meeting to review the India-Korea CEPA was held in New Delhi on 18 June 2016. It was co-chaired by India’s Minister of State for Commerce & Industry Ms.Nirmala Sitharaman and Mr.Joo Hyung-hwan, Minster of Trade, Industry & Energy from ROK. The Korea Plus, a special investment facilitation cell to provide hand holding services to Korean companies was launched by the two Ministers.

10. Industrial Cooperation Committee: To strengthen the strategic industrial cooperation, the MoU onIndustrial Cooperation Committee was signed during the Korean President’s State visit to India in April 2026. India is only the 4th country with which RoK has signed this – others being the US, Vietnam, and China. This is a new ministerial-level economic cooperation committee which aims to bolster our economic ties, focusing on strengthening supply chains, advancing strategic technologies, and fostering collaboration in industries like semiconductors, automobiles, and shipbuilding. It has 4 working groups: 

• Trade, with focus on upgrading the CEPA, addressing non-tariff barriers, expanding market access, and easing rules of origin.

• Industry, with theaim of deepening collaboration in sectors such as semiconductors, electronics, advanced manufacturing, e-mobility, shipbuilding, and digital trade.

• Strategic Resources, withfocus on securing supply chains for critical minerals and resources, including cooperation in the steel sector, and 

Clean Energy, with the aim to advance cooperation in green energy and technologies.

11. CEPA Review: The Prime Ministers of India and Korea, at the summit meeting held on 18 May 2015 in Korea, agreed on commencement of negotiations to amend the IKCEPA with a view to achieve qualitative and quantitative increase of trade through an agreed road-map. Since then, 12 rounds of negotiations at Chief Negotiators level (JS/AS-DG level) and several inter-sessional rounds have been held.  The latest round (12th) was held in New Delhi from 25 – 27 May, 2026.

A Joint Declaration on Resuming & Expediting CEPA Upgrade Negotiations for Early Conclusion by first half of 2027 was announced at the Summit meeting (19-21 April, 2026). 

12. Korean Investments in India: Korean FDI to India (up to Dec 2025, latest data as of July 2025) stood at US$ 7.27 billion, as per the Export-Import Bank of Korea, of which $200 million was received in 2010, US$ 457 million in 2011, US$ 323million in 2012, US$ 347 million in 2013, $337 million in 2014, US$ 365 million in 2015, US$ 337 million in 2016 and US$ 56 million in 2017, US$ 1,072 million in 2018, US$ 453 million in 2019, $625 million 2020, and US$ 341 million 2021, US$ 370 million 2022, US$ 722 million 2023, US$ 941million 2024, US$ 824 million in 2025.

13. Since 2022, Korean companies have continued to deepen their presence in India by expanding manufacturing capacity, strengthening research and development (R&D), and increasing investments in emerging sectors such as electric vehicles (EVs), batteries, semiconductors, clean energy, and advanced manufacturing. Hyundai Motor Group further reinforced its long-term commitment to India through the successful listing of Hyundai Motor India Limited (HMIL) on the Indian stock market in 2024, marking one of India's largest IPOs. The Group continues to expand its EV production capabilities, localization strategy, and R&D activities, positioning India as a key global manufacturing and export hub for both conventional and electric vehicles. Kia Motors India, a key member of Hyundai Motor Group, has also continued to strengthen its presence in India through its state-of-the-art manufacturing facility in Anantapur, Andhra Pradesh, which serves both the domestic market and global export destinations. Since commencing operations in 2019, Kia India has become one of the country's fastest-growing automobile manufacturers, producing popular models such as the Seltos, Sonet, Carens, and Syros. The company continues to expand its manufacturing capacity and is preparing to introduce locally produced electric vehicles as part of Hyundai Motor Group's broader electrification strategy in India, further reinforcing India's role as a strategic production and export base for the Group.

14. Samsung Electronics continues to strengthen its manufacturing and innovation footprint through its smartphone and consumer electronics production facilities in Noida and Sriperumbudur, together with five R&D centres across India. Under its "Make for India" initiative, Samsung continues to develop India-specific products while maintaining India as one of its largest production and innovation hubs outside Korea. Samsung Display has also expanded its display component manufacturing to support the growing smartphone ecosystem. LG Electronics continues to expand its consumer electronics and home appliance manufacturing operations in Noida and Pune while strengthening its R&D activities in Bengaluru. In addition, LG Energy Solution has been actively exploring opportunities in India's rapidly growing battery and electric vehicle ecosystem through potential partnerships in battery manufacturing, energy storage systems, and EV supply chains, reflecting India's strategic importance in the global clean energy transition. POSCO Holdings significantly expanded its investment plans in India through a landmark joint venture with JSW Group, announced during the 2026 Korea–India Summit, to establish an integrated steel plant with a planned investment of approximately USD 7.3 billion. The project represents one of the largest Korean investments in India and is expected to strengthen bilateral cooperation in steel production, downstream manufacturing, and industrial supply chains. Hyosung Corporation continues to expand its presence in India in spandex, industrial materials, heavy industries, and advanced manufacturing while exploring new opportunities in sustainable materials and high-performance industrial products. The company remains one of Korea's largest industrial investors in India. HD Hyundai has also expanded cooperation with India in shipbuilding, maritime engineering, offshore industries, and smart shipyard technologies. The company is actively exploring partnerships with Indian shipyards and supporting India's maritime development initiatives under the country's expanding shipbuilding and port modernization programmes. KRAFTON has continued expanding its presence in India through investments in gaming, digital entertainment, and technology start-ups. India has become one of KRAFTON's most important global markets, with the company investing in local game developers, digital content platforms, esports, and interactive entertainment ecosystems.

15. Korean Model of Investment: According to the Korea Trade-Investment Promotion Agency (KOTRA), approximately 88% of Korean subsidiaries established in India are wholly owned, while around 11% operate as joint ventures. Most joint ventures are formed between Korean companies themselves, whereas partnerships with Indian firms remain relatively limited. 

16. This investment structure reflects the long-standing preference of major Korean companies to establish wholly owned subsidiaries, enabling them to maintain operational control, protect proprietary technologies, ensure consistent quality standards, and respond quickly to market demands. Leading Korean companies such as Hyundai Motor Group, Kia India, Samsung Electronics, LG Electronics, POSCO Holdings, and Hyosung have continued to expand their wholly owned operations while strengthening local manufacturing, R&D, procurement, and supply chain networks across India.

17. In recent years, Korean companies have increasingly adopted a "Make in India, Make for the World" strategy by expanding local production, increasing the use of domestic suppliers, and positioning India as a strategic manufacturing and export hub for global markets. While wholly owned subsidiaries remain the dominant investment model, Korean companies are also expanding strategic collaborations with Indian partners in areas such as electric vehicles, batteries, semiconductors, clean energy, shipbuilding, digital technologies, and advanced manufacturing, reflecting the growing diversification of Korea–India industrial cooperation.

18. This investment approach differs from the traditional Japanese model, which historically relied on technical collaborations and minority equity participation before gradually increasing ownership. In contrast, Korean companies have generally preferred direct investment through wholly owned subsidiaries combined with long-term commitments to manufacturing, technology transfer, and local value creation.

19. Indian Investments in Korea: Major Indian investments in ROK are as follows:

• Novelis Inc., a subsidiary of Hindalco Industries Ltd., the flagship company of the Aditya Birla Group, acquired Alcan Taihan Aluminium Ltd. in January 2005. Novelis Inc. holds 68% share amounting to about US$ 600 million in Novelis Korea Ltd, which is Asia’s number one manufacturer of aluminum rolled products with state of art production facilities in Yeongju and Ulsan, and employs more than 1,200 employees. Novelis’ total investment in Korea is over US$ 700 million.

• Tata Motors Limited, acquired Daewoo Commercial Vehicle based in Gunsan, Korea for a total price of KRW 120 billion (approximately US$ 102 million) in March 2004. Its cumulative investment now is over US$ 400 million.

• In addition, Indian IT majors including Tata Consultancy Services (TCS), and Mahindra Tech set up operations in ROK and have been serving both Korean and other foreign clientele in this country. Currently, Indian IT major HCL is also trying to establish it’s footstep in Korean market.

20.Engagement between the Finance Ministries: Korean Minister Mr. Yoon, Jeung-Hyun visited India for the first Ministerial level meeting with the then Finance Minister Shri Pranab Mukherjee in January 2011. During that meeting, it was agreed to have regular ministerial-level interactions and an MOU to formalize and streamline the engagement was proposed by the Korean side. Issues under discussion in this forum included: Taxation on Korean business operations in India; opening of bank branches; cooperation and exchange of expertise in tax evasion; cooperation between EXIM banks etc. Indian Finance Minister Shri P. Chidambaram paid a reciprocal visit to ROK on 2-3 November 2012 for a meeting with his counterpart Minister Bahk Jae Wan. The issues discussed included: fiscal policy, taxation, customs clearance, public procurement and cooperation in infrastructure. The 4th round of discussions were held in New Delhi in January 2014. Exim Bank of India and the Exim Bank of Korea agreed to provide each other lists of suitable projects for co-financing in third countries, including those in Africa. During the visit of PM to Korea in May 2015, the Ministry of Strategy and Finance and the Export-Import Bank of Korea expressed their intention to provide US $10 billion for mutual cooperation in infrastructure, comprising Economic Development Cooperation Fund ($1 billion) and export credits ($ 9 billion) for priority sectors, including smart cities, railways, power generation and transmission, and other sectors to be agreed.in September 2017, The Export and Import Bank of Korea(Eximbank) invited high-ranking government officials from 17 emerging countries, including India, to its EDCF Workshop held in Seoul on the occasion of the 30th anniversary of the launching of the Economic Development Cooperation Fund (EDCF).

21. Minister for Finance, Corporate Affairs and Defence Shri Arun Jaitley visited ROK from 14-17 June 2017 and co-chaired the Fifth India-Korea Financial Dialogue with newly-appointed Deputy Prime Minister and Finance Minister of the Republic of Korea, H.E Mr Kim Dong-yeon. They discussed the risk of rising protectionism, and the need for the two countries to increase efforts to stimulate investment flows, support for infrastructure development, and bilateral trade. The two Ministers witnessed the signing of agreements to establish US$ 9 billion in concessional credit and US$ 1 billion in ODA funding for infrastructure development projects in India. Korea became one of the first non-G-7 countries to become an official development assistance contributor in India. Visit of ROK Finance Minister was planned in June 2020. However it could not happen due to global pandemic.

22. On 19 April 2022, ROK Deputy Prime Minister Mr. Hong Nam-ki met with India’s Finance Minister, Ms. Nirmala Sitharaman and discussed the global economy and bilateral economic cooperation. Minister Sitharaman said that as a co-chair of the G20 International Financial Architecture Working Group, Korea has been dedicated to creating discussions on key agendas including low-income sovereign debt issues, the 16th General Review of Quotas, voluntary contributions of SDR for countries most in need, and review of the IMF’s institutional view, and hoped to expand cooperation with Korea for dealing with G20 agendas. In addition, DPM Mr. Hong proposed to reach an agreement for financing among members at a time when scaling up financing for enhancing global health systems is an urgent task. DPM Mr. Hong also suggested that members should continue to discuss how to utilize capital flow management measures to ensure developing countries could benefit from it amid the higher volatility of the global capital market.

23. Next round of FMM is being discussed to be held in Seoul in 2026. 

24. Engagement between Trade Ministers: Trade ministerial engagement between India and the Republic of Korea has intensified in recent years, with a strong focus on upgrading the India–Korea Comprehensive Economic Partnership Agreement (CEPA) and expanding cooperation in trade, investment, resilient supply chains, and emerging industries. In March 2026, Mr. Yeo Han-koo, Trade Minister of the Republic of Korea, visited New Delhi and held bilateral talks with Shri Piyush Goyal, India's Minister of Commerce and Industry. The two Ministers reaffirmed their shared commitment to resuming and accelerating the CEPA upgrade negotiations, improving market access, facilitating bilateral investment, and strengthening cooperation in strategic sectors, including advanced manufacturing, semiconductors, green energy, digital trade, and resilient supply chains. During President Lee Jae Myung's State Visit to India in April 2026, Minister Piyush Goyal again met with Trade Minister Yeo Han-koo, where both sides agreed to further expedite the CEPA upgrade process and deepen industrial cooperation. The Ministers also supported the establishment of new cooperation frameworks covering digital trade, industrial development, clean energy, and critical supply chains as part of the two countries' shared objective of expanding bilateral trade to USD 50 billion by 2030. Following the Leaders' Summit, the 12th Round of India–Korea CEPA Upgrade Negotiations was held in New Delhi from 25 to 27 May 2026, during which both sides reviewed progress on negotiations covering trade in goods, services, investment, rules of origin, sanitary and phytosanitary measures, and agreed to establish dedicated sub-groups on digital trade, supply chain cooperation, and strategic industrial cooperation, reaffirming their commitment to conclude a modernized and mutually beneficial CEPA by early 2027.

July 2026

****