India: Crucial piece for South Korea's New Southern Policy

By Sourajit Aiyer

Most people are aware of India's historical connection with the Association of Southeast Asian Nations (ASEAN), but not many are aware of India's history with Korea.

According to mythology, a princess from India's Ayodhya traveled to the Korean Peninsula, and settled there in 48 A.D. as Queen Suriratna. Many Koreans are said to trace their lineage to this royal couple.

But that was history! Contemporary relations are driven more by economics and geopolitics. And economics and geopolitics offer an interesting cocktail to mix South Korea's New Southern Policy with India's Act East Policy.

To give some backdrop, India launched a Look East Policy in the 1990s, focusing on the ASEAN markets for trade, investment and people-connections. This was upgraded to the Act East Policy in 2015, when ties expanded further in strategic areas. It catalyzed connectivity, infrastructure and institutional development, all necessary for productive ties.

Korea's New Southern Policy is also focusing on the Southeast Asian region to deepen bilateral ties, but perhaps it is time the Blue House should look at India as the crucial piece for the success of its New Southern Policy, as India looks at Korea as the crucial piece in its Act East Policy. There are a few reasons for this:

First, the India-Korea relationship is free from the overhang of Chinese or Japanese influence. While engagement with Korea is becoming relevant for India given its potential role in counterbalancing China's growing military clout in the region. More importantly, given the depth of China or Japan's influence in some ASEAN markets, bilateral efforts with those countries for India or Korea often becomes enmeshed with the influence China or Japan exert on these ASEAN markets.

Both India and Korea have kept themselves largely multipolar, making each other free from such Chinese or Japanese influence. That augurs well for sustaining a stable political and diplomatic agenda.

Second, their economic ties can expand exponentially with the global sourcing model. That would expand market access, improve their competitiveness, reduce costs and help trade and investment move north.

Korea's prowess in manufacturing and India's location surrounded by fast-growing consumer markets of South Asia offers an ideal combination to invest into global sourcing facilities for Korean businesses in India. This is happening already, as seen by the $4 billion investments made by LG, Hyundai and Samsung in India. But there remains ample headroom for growth, to supply to the South Asian region.

India's trade with Korea at $20 billion is similar to that with Singapore or Indonesia, but the complementarities offered in those relationships are less. A renewed focus on global sourcing facilities can help India-Korea economic ties and bring more results for the New Southern Policy.

Efforts like the Korea Plus initiative in India or a focus on India in the Korean trade ministry's New Trade Order Strategy are in the right direction. Food processing, automobiles, textiles, electronics and telecom equipment offer tremendous scope to supply to third countries. As it is, India and Korea are exploring tripartite development work in third countries.

Next, Korea announced in 2017 to upgrade the India-Korea relationship to the level of its traditional partners under the New Asia Community-Plus. The recently concluded Strategic Economic Dialogue, and the soon-to-be-held 2+2 consultation exercise of their foreign and defense ministries, would take bilateral ties further into strategic areas.

It is imperative to leverage this momentum and win dividends by deepening the focus of the New Southern Policy on India. That would help Korea reduce its overdependence on the U.S. or China for economics. For India, connecting its East Policy with the New Southern Policy would give it depth in terms of its Indo-Pacific security strategy.

Last, research offers an unparalleled avenue for cooperation. The plans for the Korea-India Future Strategy Group and Korea-India Centre for Research and Innovation Cooperation bode well to build the institutions for cooperation in research and innovation. Recent bilateral agreements between the two nations include areas such as biotechnology, science and information technology.

India's flagship programs like Make in India and Smart Cities will continue to offer a huge opportunity for R&D, enabling innovation and research to take this relationship to the next level.

However, nothing can happen without deeper people-to-people connections. India's strong relationships with the U.S., the U.K. or Japan are, in part, a result of the depth of the people-connections.

With neighborhoods like Songdo and Incheon housing several international development organizations, there is an opportunity to bring in more Indian expats into Korea, that brings natural gains to people-connections. While several Indian students are pursuing higher studies in Korea, this should be a priority-sector in the bilateral relationship.

Closer cultural connect with translated film or television content can also promote awareness, as would boosting air connectivity and assistance for tourists.

At the end, not only is India looking at Korea, even Indian states like Maharashtra and Telangana are soliciting Korean businesses. With the 2+2 dialogue creating further strategic mileage to the bilateral ties, it may be time Korea puts disproportionate emphasis on India in its New Southern Policy. That would be a win-win for both nations.

Sourajit Aiyer (sourajitaiyer@gmail.com) is a consultant with South Asia Fast Track. He is an author and guest-lecturer, and has worked with both traditional and sustainable finance organizations.