South Korea Sets Up New Division To Encourage New Wave of Korean Companies Into India

 

New Delhi : South Korea's Ministry of Trade, Industry and Resources has set up a dedicated division to promote industrial and trade cooperation with India, underlining efforts to deepen economic linkages.

South Korean firms like Samsung and Hyundai are established brands in India with Korean soft power visible in the popularity of its music, television shows, food and beauty brands. Despite South Korea's popularity in India, both sides have been seeking to boost trade and investment.

 

The Korean Ministry said it was setting up the new division to promote industrial and trade cooperation between the two countries. The effort, analysts noted, aims to encourage a second wave of South Korean investments into India, already visible through a proposal to set up a Korean Enclave or an industrial township in India, featuring plug-and-play infrastructure to ease the entry of small and medium-sized enterprises from Korea.

The township was discussed during South Korean President Lee Jae Myung's visit for a bilateral summit in April, the first visit by a South Korean head of state to India in eight years.

Kyunghoon Kim, the head of the India and South Asia Team at the Korea Institute for International Economic Policy told ETV Bharat that the new division within the ministry demonstrated "Korea’s strong commitment to strengthening its partnership with India".

 

He noted that at the April 2026 summit, the two countries agreed to establish an Industrial Cooperation Committee, resume negotiations to upgrade the Comprehensive Economic Partnership Agreement (CEPA) signed in 2010, and expand cooperation in strategic industries.

"The new division is expected to oversee bilateral industrial cooperation and help ensure that these agreements and initiatives translate into concrete action."

The renewed push comes as the two sides seek to widen the economic engagement. Bilateral trade between India and South Korea was $25.6 billion in 2025 with the goal of more than doubling it to $54 billion by 2030. Trade has grown by around seven billion dollars over the past decade.

Indian exports to South Korea include petroleum products such as naphtha, engineering goods, pharmaceuticals, aluminium, and steel. South Korea exports integrated circuits and semiconductors, machinery, automotive parts and electronics to India.

 

Investments have also been growing with Hyundai Motor Group announcing plans to invest $15.5 billion from 2026 through 2032 in manufacturing and research and development in India.

Still, expanding trade is just one part of a larger effort to deepen engagement across the board as both countries seek to diversify their trade and security ties.

Both countries are also seeking to further expand business ties including in newer areas like emerging technologies and critical minerals.

For India, the effort is to attract investments into India and help bolster its economy and manufacturing ecosystem. India is also seeking to diversify supply chains away from a dependence on any single country.

For South Korea, India provides a massive market but the challenge is for smaller companies to navigate the Indian market.

 

"Their domestic market is ageing and shrinking. They have a 50 million population. Everybody has white goods. You can only sell in large markets like India," said C. Rajasekhar, former diplomat and Vice-Chairman of the India–ROK Friendship Society.

"We need to have close conversations so that we can create a framework for a sustained economic partnership. The task is to attract a second round of investments from Korea."

The proposed Korean enclave is aimed at facilitating the entry of Korean firms into India. The key challenge for companies is a "lack of experience and network in India especially for Korean SMEs," said Kim

"They understand that India offers great potential as an emerging market and a manufacturing base, but many still have limited knowledge and information with regard to regulations and processes."

The bid by both countries to deepen economic ties is part of a broader engagement to expand ties across the board, including in defence.

Defence Minister Rajnath Singh was in Seoul in May 2026 during which the two sides discussed ways to boost joint development, production and exports from India.

There are many complementarities between the two sides, said Rajasekhar. "India and South Korea are similarly placed countries in terms of the geo-economic background," he said. He noted that South Korea too is balancing ties between China and the US.