Destination India: India is next China, Vietnam, KITA tells Korean companies
New Delhi. With a focus on strengthening its global position as world’s leading economic power, Korea is asking its companies in its country as well as those operating in China, Vietnam and other countries to look forward to India as their next destination for all their future expansion plans.
New Delhi office of Korea International Trade Association (KITA) led by its Chief Representative (Director) Hee-chul Jung, is trying to convince Korean companies that by making India as their operation base, they would have better access to international markets like Africa, Europe, and the Middle East.
“With focus on business, we are telling not only the Korean companies currently operating in India do more business here but also want more Korean companies operating in Korea, China or elsewhere in the world to come to India,” Hee-chul Jung, the KITA chief in India told Asian Community News (ACN) Network recently .
At present, India has the meager presence of about 500-700 large, medium and small Korean enterprises where the number of Korean companies operating in China is over 50,000 and these are more than 7,000 in Vietnam.
“We are making every effort to convince the Korean companies elsewhere that India will be next Vietnam or China. Korea owed its success to countries like China, Vietnam and to our success also. We had set up factories in these countries to lower the cost and to have better access to other countries. We sent out our people, set up our factories and the majority of them have set up their representatives and factories in countries like China. We want that to happen in India also,” added Hee-chul Jung.
Also read: Korean SMEs seek sops, easy access to Indian markets
When asked why Korea was looking forward to India as next its destination, Hee-chul Jung said since Korea owned its success to countries like China as from there they were able to lower the cost, and utilise the raw materials, to have access to the international market. And this way of doing global business was not specific to Korea as it was the same for any other country to an as natural way of business too, he added.
“Right now, we need to find a better place to establish our foundation for business and apply the same logic. India has all the factors for laying our strong foundation here such as well-educated manpower, raw material, and also the access to most of the global markets like the Middle East, Africa and Commonwealth countries. India is closer to Africa, Europe, the Middle East. If they (Korean companies) establish a manufacturing base here, they will have better access to those countries,” said Hee-chul Jung.
However, Korea cautioned India that it was looking at some other options as well such as Indonesia and Malaysia that it feels could be good candidates for Korea investment.
“We also want India to be a very competitive candidate to those countries,” said Hee-chul Jung.
When compared to China politically, KITA New Delhi chief said India has a better chance than China because India has a better relationship with the western world.
“Korea is one of the capitalist countries and where they follow the capitalist way of doing business which is in compliance with the western world. India is representing the non-alliance, however, it is closer to the west. Its regulations and law were inherited from the west, therefore we find it quite comfortable doing business here with the western world,” added Hee-chul Jung.
Established in 1946 with the objective of advancing the Korean economy through trade, KITA is currently the largest business organization in Korea with over 70,000 member companies. With a widely established network of 13 domestic offices and 11 overseas branches in major cities, KITA has consolidated its position as a leading business organization dedicated to assisting SMEs in gaining foreign market entry and has actively contributed towards Korea’s recent achievement of 1 trillion dollars in trade volume.
Both India and Korea have jointly pledged to increase the bilateral trade to $50 billion by 2030 from.
Ironically, Indian trade volume with Korea is just 2 percent of the total overseas trade volume of Korean, while with China it is more than 25%, while Korean-ASEAN trade volume is more than 10 %.
However, there are some operational challenges and concerns the Korean companies, especially the ones operating in India already in places like Chennai, Pune, Bangaluru and other cities.
“Some of these concerns are land acquisitions regulations, import regulations, and labour laws and unions but the Korean companies seem to have learned to overcome hurdles. One such instance is the decision of not employing local people and prefer to induct transportation means like buses for their employees to commute between their homes and workplace,” said Hee-chul Jung.
