India and South Korea signed a major trade deal this Monday, aimed at increasing bilateral trade to over $50 billion by 2030. This would effectively double the current annual trade volume between the two nations over the next four years.
South Korean President Lee Jae Myung met with Indian Prime Minister Narendra Modi this Monday to deepen trade alliances between the two prominent Asian nations. This is the first time in nearly a decade that a South Korean President has visited India, and the impact of the meeting that took place is substantial. The goal of India and South Korea’s newfound economic partnership is to increase bilateral trade between the two countries to $54 billion USD over the next four years.
India is quickly becoming the world’s fastest-growing major economy, so it is no surprise that South Korea has moved to get in on the action. This news comes after France and India also recently forged a new strategic economic alliance as major world powers seek to deepen economic ties with the blossoming Indian nation. Regardless, this new trade alliance between India and South Korea is set to usher in a new era of economic progress between both countries.
Details of the new economic alliance
This Monday’s upgrade to the Comprehensive Economic Partnership Agreement (CEPA) between Indian and South Korean leaders resulted in the signing of around 15 new documents. These serve the purpose of boosting economic cooperation across various sectors: clean energy, artificial intelligence, critical minerals and supply chains, semiconductors and advanced technology, shipbuilding, manufacturing, defense, and digital trade. Discussions also led to the establishment of an India-Korea Industrial Cooperation Committee, which will be focused on investment in four of the aforementioned areas of industry, trade, strategic resources, and clean energy.
Each of these newly forged agreements is to act as a framework for the two nations to meet their bilateral trade goal of over $50 billion by 2030. This would require an annual growth rate of roughly 18% from where it stands today at roughly $25-27 billion. Leaders from both nations have committed to ongoing negotiations to expedite the CEPA upgrade to make this happen. These negotiations are to include the removal of non-tariff barriers and additional improvements to reduce friction that would otherwise limit the ease of conducting business.
Why India, why now?
The new economic partnership between South Korea and India is part of a larger shift in economic strategy by major world powers. India is quickly positioning itself as a global production hub as many countries seek to diversify supply chains away from China. However, this is hardly accidental, but part of a larger effort by the Indian government to transform its economy in a way that invites accelerated foreign investment.
India’s Viksit Bharat 2047, which translates to “Developed India 2047,” is the government’s long-term plan to become a fully developed economy by its 100-year anniversary of independence from the British. It is driven by a few major engines such as scaling domestic production, technological leadership, expanding clean energy resources, and low-cost infrastructure expansion. This future-oriented agenda gives foreign partners confidence in the long-term stability of economic partnership with India as they scale their economy with intention.
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Source: https://www.cryptopolitan.com/india-and-south-korea-to-double-bilateral-trade-with-new-50-billion-economic-partnership/
