Korea Sees Huge Trade Potential With India In EVs, Clean Energy

India and Korea will see enhanced trade in coming years in areas of Electric Vehicles (EVs), Information and Communications Technology (ICT) and Green Industries, said Joomnhwa Bin, MD, Southwest Asia, Korea Trade and Investment Promotion Agency (KOTRA) on Monday.

Bin added that earlier the trade between the two countries was limited to automobiles, electronic appliances, mobile phones and displays.

In the future, this will be widened to areas like EVs and clean energy, Bin said on the sidelines of the India-Korea Future Industry Partnership Event 2023 in Delhi.

"India has the lead in producing Green Hydrogen, and we have advanced technology in fuel cells and hydrogen mobility. So, both countries need to cooperate. We need to import a lot of Green Hydrogen, and at the same time, India is also looking to develop an advanced transportation sector," Bin said.

At the forum, Korean Ambassador to India H.E Change Jae-bok said that through collaboration and cooperation, we can further emphasise the importance of adopting green energy and work towards achieving the sustainable development goals that both countries are committed to.

India and Korea have a strong economic partnership. Korea's trade volume with India in 2022 reached a record high of USD 27.8 billion, which increased by 17.3 per cent from the previous year's total of USD 23.7 billion. It was the largest trade volume between the two countries on a yearly basis as both exports and imports increased significantly.

Korea's exports to India increased by 21 per cent to USD 18.9 billion, while imports increased by 10.5 per cent to USD 8.9 billion.

Korea's investment in India in 2022 (as of January-September) increased by 54 per cent year-on-year to USD 348 million, a gradual recovery after the pandemic, data from the Export-Import Bank of Korea showed.

Apart from major investments in manufacturing industries such as electricity, automobiles, and chemicals, a new trend of investment expands in fields such as food, textiles, and diagnostic kits.

Bin said that a lot of Korean companies want to invest in India, and the 'Make in India' policy is very successful, which will lead to rising trading volumes.

On India's rising trade deficit, Bin said it is a transitional phenomenon that will not last forever.

"India's manufacturing is booming, and as more industrial clusters are formed in India, the trade deficit will be decreased," Bin said.

In February this year, Union Commerce and Industry Minister Piyush Goyal expressed the Indian government's growing concerns about India's rising trade deficit with South Korea. 

Goyal added that the government is negotiating with the Korean government about opening up its markets for Indian products.