Aggressive Japanese, Chinese investments in India leave Koreans worried

NEW DELHI: Aggressive investment and business expansion plans of Japanese and Chinese companies in India, and support to them by their governments have left the South Korean business community worried here.

Investment by Chinese companies in various sectors in India especially the startups, and also by the Japanese companies in infrastructure and strategic sector here has shot up in recent years, and their presence and number are rising in India.

A concern to this effect was shared by the Korean business community with the visiting delegation of Korean Member of Parliaments. South Asia Diplomatic Forum which is a group made up of Members of Parliaments within the Korea national assembly, comprised of four MPs who were on a 3-day visit to India recently.

Euy Don Park, the Chairman, Presidential Group of Korean Associations in India told Asian Community News (ACN) Network that the South Asia Diplomatic Forum visited India Korea Small Medium Enterprises Centre and interacted with the top representatives of Korean companies operating in India.

“We informed the forum of MPS that Japan is very aggressive in India, and has become the number one foreign investor here. Singapore and Mauritius are financial parking investments in India but the actual top investor here happens to be Japan. Japan is investing in a lot of opportunities and infrastructure projects like Delhi Mumbai Industrial Corridor (DMIC), high-speed trains, etc.” said Park.

The forum was also informed about various schemes and programs launched by Japan in India like TITP (Technical Intern Training Program) inviting 3 lakh youngsters to japan to train them on various skills there for three years.

The cumulative investment by various Korean companies in India has been recorded at US$ 6 billion while it is deep contrast low as against Japan that has invested US$30.27 billion between 2000 and 2019.

While informing about the Chinese scenario in India, the Korean business community informed the Forum that China was the number one trading partner of India with US$92 billion bilateral as against Korea with trade US$21.5 billion bilateral trade till now.

Interestingly, the visit of Korean MPs to India happened around the visit of Amazon’s CEO Jeff Bezos who announced to invest US$ 1 billion in India.

“Now Chinese companies are very aggressive to pump investment into India in sectors like automobiles and electronics. Their mobile smartphone brands like Oppo, Vivo, Heir are aggressively doing business in India through Electronics Manufacturing Services. These EMS companies are supporting Chinese manufacturing companies with the development of their brand as well as R&D services. A huge rush of Chinese companies is coming to India in other sectors such as construction and their number is growing every day,” said Park.

The Korean business community is reported to have suggested the MPs delegation that the Korean government should also come out with aggressive plans for India.

“We suggested to the delegation that it is high time that Korea and India should take strong strategic decisions to increase Korean presence in India more. At present, the number of Korean companies in India is under 700. Another problem is the growth rate of Korean companies in India is not high. MNCs make success here but SMEs are struggling because of a lot of challenges like cultural issues, business style, government regulations, tax issues, etc as SMEs have limited resources too. We sought more support from the Korean government on this,” added Park.

The total number of Japanese companies in India has crossed the 1441 mark.

According to Yoo Chang-ho, Minister-Counselor, Political Affairs, Embassy of the Republic of Korea the MPs delegation also met with the Indian MEA officials, and MPs, BJP Think Tank besides visiting the Korean SME and Startup center.

When asked about the concern showed about the increasing Chinese and Japanese investment, Yoo said Japan was always there but China too was increasing investment in India and visiting MPS was made aware of it.

“It was emphasized that Korea should also increase investment in India while seeing the potential of the Indian market. It was also stressed at the same time, that all these countries are investing in India, so Korea should also invest in India keeping all that in mind,” Yoo told Asian Community News (ACN) Network.

According to Euy Don Park, the MPs delegation gave a patient hearing to the concerns expressed by the business community and assured them to act positively on the same.

“The MPs tried to understand Korean business status in India and the problems Korean businessmen are facing here, also the kind of support they need from the Korean government. They left with some good ideas to promote Korea-India bilateral trade, and human and cultural exchange,” added Park.

Japanese aggression can be gauged from the fact that way back in 2014 during PM Modi and Japanese PM Abe had announced the India– Japan Investment Promotion Partnership at Tokyo to invest JPY 3.5 trillion (USD 33.5 billion) in India over the next five years.

Though the cumulative Chinese investment in India amounted to $5.08 billion till 2019, these figures do not take into consideration the investment routed through Singapore, Hong Kong, and others especially in sectors such as start-ups, etc. which has seen significant growth in Chinese investment.

In deep contrast, even though India and Korea have vowed to take the bilateral trade to US$ 50 billion by the year 2030, and India features among the top 10 trade partners of South Korea and is the sixth-largest export destination for South Korean goods, the progress of Korean investment and bilateral trade has been sluggish so far, and need the much-required push from both the sides. Widening the scope of CEPA would be the first and welcome step in this direction.