India touts huge consumer market, startup ecosystem to Korean investors

The Korea Times President-Publisher Oh Young-jin, front row sixth from right, poses with Indian Ambassador to Korea Amit Kumar, front row fifth from right, and Director General for International Trade Relations of the Korean Ministry of Trade, Industry and Energy Kim Jong-chul, front row fourth from right, in a group photo after The Korea Times Global Business Club at Korea Press Center in central Seoul wrapped up on Thursday. Korea Times photo by Choi Won-suk

By Ko Dong-hwan

• Published Oct 12, 2023 6:09 PM KST
• Updated Oct 13, 2023 9:20 AM KST

India has a huge consumer market with wide-ranging industrial demand in need of investment by Korean firms and robust infrastructure to support future business, senior officials at the Embassy of India in Seoul said, Thursday.

With growing sectors such as energy, chemicals, pharmaceuticals and medical devices and a dynamic ecosystem of more than 100,000 startups, India is the world's fifth-largest economy and the "fastest-growing large economy," according to officials. The country's GDP this year saw a year-on-year increase of 7.2 percent, registering $3.75 trillion and in 2022-23 the country reached its highest-ever exports of $776 billion in 2022-23.

Alongside India's development was incrementally rising foreign investment. Among the foreign capital of $919 billion poured into New Delhi since 2000, 65 percent is from the past nine years.

"New Delhi's Vision 2047 states the country will see its economy grow up to $32 trillion, GDP growth of 7.6 percent and per-capital-income (PCI) grow nine times to log $22,000," Nishi Kant Singh, deputy chief of mission at the Embassy of India, said during The Korea Times Global Business Club forum at the Korea Press Center in central Seoul. "And 65 percent of our population is under the age of 35."

The country has introduced a series of business reforms like government incentives for key sectors and is introducing a new digital platform for foreign investors called the national single window system (NSWS). Until 2040, India plans to invest 3.6 percent of its GDP in infrastructure including highways, ports and airports. That is the third-biggest portion of a projected commitment for domestic infrastructure in the world following China and Indonesia.

The goal to eliminate carbon emissions by 2070 is another national goal that prompted India to venture into environmental innovation. The country seeks to be energy-independent by 2047 and attain the world's fourth-largest capacity of renewable energy by 2070. By 2030, it is looking to raise non-fossil fuel energy capacity to 500 gigawatts and reduce total carbon emissions by 1 billion tons. Singh said such environmental commitment is one of the reasons India successfully attracted foreign investments.

"There are companies with their biggest R&D centers in India," Singh said. "Samsung and LG have their largest R&D centers outside Korea, Oracle has the second-largest R&D workforce and Qualcomm has the largest design center outside the U.S. General Electric and Intel also have their largest lab and R&D facility outside the U.S. Their partnership with India has led the country to report an 82 percent increase in patent filings since 2016 and increase patent grants by more than threefold from 2016."

Singh highlighted the country's key industrial sectors that could develop further with foreign investments. In the energy sector, the country seeks to launch strategic intervention for green hydrogen transition (SIGHT) to set up green hydrogen production facilities and manufacturing capacities for electrolyzers. Last year, the country received foreign direct investment (FDI) of $1.7 billion in the sector, the highest since 2000.

India is also seeking investment in petrochemicals and specialty chemicals like agrochemicals, surfactants, coatings and adhesives. From 2020 to last June, FDI worth $21.5 billion has been infused into the field. Pharmaceuticals, medical devices, ports and shipping, roads and highways, logistics, automobiles, textiles and food processing are other local key sectors that have been attracting foreign investment, according to Singh.

More than 100,000 registered startups and almost 110 unicorn companies in India are the country's other major strengths attracting foreign investment.

"The last nine years saw the number of startups in India rise by 300 percent, with 100 unicorn companies born in the last three years," Sharique Badr, first secretary of the Embassy of India in Seoul, said during the forum. "The government of India in 2016 launched Startup India Mission that focused on space and defense sectors. In the first half of this year, some $18 billion foreign investment came from big players like SoftBank, Tiger Global and Sequoia Capital."

Badr said Korean venture capitals like Mirae Asset, Korea Institute of Procurement and KB Investment have already made "safe bets" in India's social networking, fintech, e-commerce and gaming sectors. The fact that 50 percent of the country's 1.4 billion people are active internet users and the country has the world's second-highest number of local mobile users supported such ventures by Korean firms.

Kim Jeong-kon, director of the India and South Asia Team of the Korean Institute for International Economic Policy, said during a panel discussion that India's economic growth and industrial conditions are currently very stabilized.

"Many experts share that India will sooner or later emerge as one of the G3," Kim said. "They may have a lower PCI than Korea but, on a global stage, they boast a significant influence. The scope of innovation India is realizing is also very wide in a range. In terms of bilateral trade, their interests mutually overlap. So they have high potential to become great trade partners."

Kim Jong-chul, director general for International Trade Relations at the Ministry of Trade, Industry and Energy, mentioned I2U2, a new grouping of India, Israel, UAE and the U.S. with a commitment to deepening their economic partnership.

"India is starting to show international leadership," he said. "Not only the country contributes a great deal to the world economy but it is increasingly stepping up as a mitigator among global communities. Look how India hustled in the Hangzhou Asian Games where they came fourth overall right behind Korea. I think the games have also given Koreans a new chance to look at India differently."