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INDIA AND SOUTH KOREA

  May 14, 2020

INDIA AND SOUTH KOREA

Introduction:

  1. In recent times convergences between India and South Korea has increased due to India’s taking its Look East policy to a new level of Act East policy that includes South Korea also. At the same time South Korea has unveiled its “New Southern Policy”(NSP). The NSP is aimed at elevating Korea’s strategic ties with the Association of Southeast Asian Nations (ASEAN) and with India to bring relations on par with South Korea’s four major diplomatic partners: the United States, China, Japan and Russia.
  2. The fact that India has no sensitive issues with South Korea helps the cause of strategic cooperation between the two states. 
  3. India sees the ROK as an indispensable partner in its ‘Act-East’ strategy, with the potential to contribute to peace, stability and security in the Asia Pacific Region.
  4. Prime Minister Narendra Modi’s visit to Seoul in February 2019 witnessed a push towards a special strategic partnership.

Historical View of Relationship

  1. It was in May 2007 that Indian and South Korean defence ministers held their first-ever consultations.
  2. In January 2010, South Korean President Lee Myung-bak and Indian Prime Minister Manmohan Singh upgraded ties to a “strategic partnership” that included an enhanced focus on political and security cooperation.
  3. Both nations share a history of partition, and confrontation with Pakistan and North Korea, respectively, as well as an uneasy relationship with China. 
  4. Importantly, while both sides have sought to tackle their principal adversary through coercive diplomacy, they have adopted similar approaches to dealing with China. New Delhi and Seoul have sought to simultaneously accommodate and balance rising Chinese power–expanding economic ties with Beijing while deepening their strategic relationship with the United States, in an attempt contain growing Chinese presence in their neighbourhood.
  5. Indian Defence Minister Rajnath Singh’s visit to South Korea in August 2019 showed greater intent on the part of New Delhi to strengthen military ties. The visit followed the signing of two far-reaching agreements: one to extend logistical support to each other’s navies, and a second one to deepen defence educational exchanges.
  6. Indian defence minister invited the Korean defence industry to participate in DefExpo 2020.
  7. South Korean defence industry, Samsung-Techwin, and India’s Larsen & Toubro have entered into an agreement for the sale of 100 howitzers in May 2017.

AREAs OF CONVERGENCE AND DIVERGENCES

  1. INDO-PACIFIC COOPERATION-
  2. CONVERGENCE - both want rules-based and inclusive regional architecture for Indo-Pacific. 
  3. DIVERGENCE - Indo-Pacific presents a dilemma for both India and South Korea. This is because the US, through its ‘Free and Open Indo Pacific’ (FOIP) strategy, has adopted a confrontational stance vis-a-vis China. As a treaty ally of the US, with China as its biggest trading partner, Seoul increasingly faces problems in managing its relations with these important associates. In contrast, the Indian version of the Indo-Pacific is more conciliatory, emphasising stakeholdership and inclusion. For India’s strategic elite, the concept goes beyond political and strategic considerations to also include economic, cultural and historical elements, each underscoring the imperative for pan-regional participation and multilateral cooperation

2. MARITIME COOPERATION

CONVERGENCE - Since the early 2000s, India and South Korea have cooperated in search-and rescue and anti-piracy operations in the Indian Ocean. New Southern Policy reveals that there might be other areas concerning maritime security where the ROK might be willing to make common cause with India. These include shipbuilding (where the two nations already have an MoU in place), joint capacity building, maritime domain awareness, humanitarian assistance and disaster relief, search and rescue, marine pollution, anti-piracy, counter-terrorism and counter-trafficking, and

combating marine pollution. 

DIVERGENCE - India, however, has been reluctant to play a maritime role in Northeast Asia. While supporting measures for the establishment of a strong and unified Korea, Delhi has desisted from playing a more direct role in the Korean Peninsula. In the past, political observers have called India a legitimate dialogue partner in any future settlement with North Korea; the South Korean government has even requested that India use its “special status” with the two Koreas to support its position in the Six-Party Talks, playing an honest broker role between South Korea and North Korea as it did during the Korean War.

South Korea wishes to develop a security relationship with India, but not as a ploy to contain growing Chinese power. ‘Strategic equilibrium’ is more what Seoul seeks in Asia, and it is willing to partner the US for a desirable end-state.

FUTURE PROSPECTS-The Indian navy has also worked to boost its situational awareness in the maritime commons, establishing an Information Fusion Centre (IFC) for the Indian Ocean Region. Launched in 2018, the centre processes radar and sensor data from participating countries and offers the data to partners, including all members of the Indian Ocean Rim Association. Seoul could also help boost the Indian capacity to provide humanitarian aid and disaster relief (HADR) in the neighbourhood.

3. ENERGY

CONVERGENCE - South Korea and India are heavily dependent on fossil fuels, i.e. coal, oil and natural gas, which poses a critical challenge to their efforts to decarbonise their energy systems. Both South Korea and India are heavily dependent on imports to meet their energy demand, which exposes them to the vagaries of geopolitics and geoeconomics. They have also invested heavily in nuclear energy to diversify their energy baskets, but this has meant grappling with the inherent contradictions of nuclear power.

DIVERGENCE- For South Korea, the critical challenge is to find a balance between maintaining industrial competitiveness and decarbonising. For India, the challenge is to balance between industrialising and decarbonising.

4. Healthcare - 97 percent of the South Korea population is covered by a contributory health insurance scheme. India has also launched Ayushman Bharat to provide near universal access to heath care to its citizens. India can learn from the experience of South Korea.

5. Automobile Industry - India has recently given a push to electric vehicle. In this regard, South Korean Companies such as KIA can play a great role. South Korea is one of the leading shipbuilders in the world. This could be crucial for India as India is implementing programs such as Sagaramala to overhaul shipping sector.

6. Defence - South Korea’s defence industrial base is one of the best in the world. Its forces are mainly equipped with Korean-designed and made equipment: small arms, tanks, armoured fighting vehicles, engineering vehicles, radar systems, communications equipment, optics and night vision systems, artillery, surface-to-surface missiles, military robots, fighter aircraft, destroyers, frigates, and submarines. India can use this sector to develop its own capabality.

Comprehensive Economic Partnership Agreement (CEPA)

The CEPA is a bilateral agreement that covers trade in goods and services, investment, competition, and intellectual property rights (IPRs). It was signed in 2009 and operationalised in 2010.

Current Situation-

INDIA-Although India’s GDP (at market exchange rate) is converging towards the US$ 3-trillion mark, a large population makes India’s per-capita GDP much lower than that of other major economies. The GDP growth has slowed down. Consumer demand has been slowing down.

South Korea  - Although South Korea is a high-income economy with per-capita GDP at US$ 33,634, it is presently facing a low inflation situation and a slowdown in its GDP growth. With rift with Japan in recent times, there is more uncertainty on Growth.

On Updating of CEPA

  1. In July 2018, India’s Commerce and Industries Minister and ROK’s Trade Minister signed agreements on trade and commerce, thereby updating the CEPA. However, updating the CEPA has been done through difficult negotiations from both sides.
  2. India maintained its stand against giving South Korea tariff lines that directly impacted its manufacturing.
  3. South Korea did not agree to confer the status of ‘native English-speaking nation’ upon India though it has accorded the same to a few countries, including South Africa. This could have opened up possibilities of E2 teaching visa for Indians in South Korea.
  4. After implementing CEPA in 2010, the widening trade deficit of India with South Korea has remained an issue of concern. Overall deficit has gone over US$ 12 billion, of which trade deficit in goods constitutes the major part.
  5. After implementing CEPA in 2010, the widening trade deficit of India with South Korea has remained an issue of concern. Overall deficit has gone over US$ 12 billion, of which trade deficit in goods constitutes the major part.
  6. How to handle increasing trade deficit? One way of tackling the problems of trade deficit and comparatively less advanced nature of export basket of India is to encourage South Korean investment in India. If South Korean companies start operating from India and export to other destinations, that could narrow the trade deficit of India and also improve the quality of the basket of Indian exports.
  7. ROK companies often complain about delays and cancellation in granting different approvals for doing business in India. Some of these complaints are genuine and must be addressed.