Mentor’s Comment:

The question itself directs the way answer to be written. Introduction should explain about the economic ties between both the countries. Signing of CEPA in 2010, India’s export of about $2.91 billion, FDI by major Korean industries etc. have significant economic impact on both the countries.

Further mention how the ties can be beneficial for Indian Economy. Boosting India’s economic growth, job creation, promotion of make in India, skill development etc.

Next mention how Korean economy will benefit. Market for start-ups, reducing independence on China and US, Korea will get rare earth minerals from India etc.

Next, conclude with way forward.

Model Answer:

The Economic relations between India and South Korea have been strong. We have signed CEPA in 2010. As of 2017, Indian exports to South Korea stood at $2.91 billion and imports from there stood at $8.71 billion. As of 2017, Major Korean industries such as Samsung, Hyundai Motors and LG have made significant investments into India, estimated at over $4.4 billion.

How Indo-Korea ties can be beneficial for Indian Economy?

• It can boost India’s economic growth: A lot of complementarities exists at various levels between two countries; for example, South Korea’s technological advancement and manufacturing capabilities can be helpful in India’s economic growth and human resource development.
• Korean Industrial giants can create jobs in India: Recently Samsung opened world’s largest mobile factory in India. Korean Giants like Samsung, LG and automobile companies have potential to create enough jobs in India.
• Can promote make in India: South Korean companies can participate in our Make in India programme and can give a boost to India’s industrial sector. Because of the commitment of the companies towards maintaining quality, they have become household names.
• Can help in skill development: South Korea is a world leader in Skill development. Most of the workforce in Korea is skilled. Korean expertise and collaboration could give a boost to skill India programme.

How Indo-Korean ties can be beneficial for Korean Economy?

• Market for start-ups: India is a potential market for start-ups and is witnessing a surge in Korean companies investing in the Indian market.
• Can reduce dependence on China and USA: Increased trade relations with India can reduce Korea’s reliance with China and the US which are biggest trading partners of South Korea. With new issues cropping up in ties with China and America, export-driven South Korea must find new markets. South Korea’s economic growth has slowed, presenting it with important challenges. India can be a new market for South Korea.
• Import: India can Supply rare earth Minerals and Parametrical to Korea at an affordable cost.

Way Forward

• There is an urgent need to strengthen economic partnership. As a trade war unfolds between US and China, Delhi and Seoul need to liberalise their own bilateral trade relations.
• The business community of both countries must leverage opportunities arising from complementarities between the two economies to enhance investment, to promote joint ventures, and to work towards the goal of raising bilateral trade to $50 billion by 2030″.