INDIA-KOREA - Asia-Pacific Business and Technology Report

INDIA-KOREA
Glorious Past Bright Future
cover story
(Above) Mr. Vishnu Prakash introducing Korean dignitaries to Prime Minister, Dr. Manmohan Singh during his recent visit to Seoul on March 25, 2012.
time there would inevitably be a food crisis.
Now we are a net exporter of food, but we
have certainly seen hardship. We, I think,
can look back with satisfaction at what we
managed to achieve, especially in empowering
the masses.
India is still a developing country. We
have about 300 million poor people, but
the percentage of poverty is coming down.
The quality of life of the average Indian is
improving. We have a very young population.
More than 50 percent are below 25
years old, and 70 percent are below 35. Every
year, 10 million people join the workforce.
So it is a huge challenge just to create
enough employment opportunities in
our nation.
India is one of the oldest civilizations,
and one of the greatest democracies today.
It has a great hunger, but not for food. It is a
hunger for opportunity, says Tom Friedman.
The center of economic gravity is shifting
towards Asia. The BRICS countries together
have 23 percent of the world’s GDP. When
we look ahead, by 2035 China, the USA, India,
Japan, Korea, and Germany are going
to be among the largest economies in the
world. There is a Goldman-Sachs report to
back this up. Korea and India are vibrant
and robust democracies. India will soon be a
2 trillion dollar economy. Since 1991 when
we started reforms, we had 6-8 percent
growth per annum. And even though the
global economic slowdown has impacted
our GDP growth somewhat, our economic
fundamentals continue to be strong. On the
other hand, Korea is still the fastest-growing
OECD country in the world. Our national
challenge and objective is to put India on
the path of an equitable and sustainable
economic growth.
Some aspects of the Korean model are
worth emulating. The country spends 9
percent of its GDP on education. Like in
Korea a primacy is given to education in
India. India’s first Prime Minister said that
educational institutions need to be the new
temples of India. Following his ideals, we
have set up many institutions of excellence
throughout the nation. Our schools have
good reputation in providing quality education
in management, information technology,
engineering, and science.
India and Korea have complimentary
economies. We have strengths in the sunrise
industries, especially IT software. But
we are a huge importer of IT hardware,
where Korean manufactures have an edge.
The hardware demand in 2012 is estimated
at over US$13 billion. We are deficient in
infrastructure, but have now begun investing
8 percent of GDP in it per year. During
2102-17 we propose to invest US$1 trillion
in infrastructure development, including
highways, airports, metros, power plants,
etc. We have the money, and we are collaborating
with other countries in executing
these projects. We would like to see Korean
construction companies, which have an
excellent track record, play a more active
role in executing infrastructure projects in
India. Chinese companies have already executed
or secured US$70 billion worth infrastructure
projects in India.
Korean companies have been very successful
in India’s huge market, comprising
a 300 million strong middle class alone,
which has excellent buying power. Around
20 percent of the Indian small car market
share is with Hyundai for example, which
has in two plants in Chennai, producing
more than 600,000 cars per year. Over 50
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percent of market share for consumer durables
like air conditioners, TV, washing
machines, refrigerators is also with Korean
companies like Samsung, LG and Hyundai.
India exports a number of products like
chemicals, yarn, jewelry and raw materials
to Korea, including bauxite and iron ore.
There is as yet so much more we can do
together.
Indian multinational corporations now
have a global presence. India is seeking
and making investments. India received
FDI (foreign direct investment) of US$158
billion in the last ten years while US$129
billion was invested abroad by Indian companies
over the same period. As such, the
economic fundamentals are strong and the
economy is well regulated. Already we have
some of the big names like Tata that bought
out Daewoo trucks in 2004, and Mahindra &
Mahindra, which bought Ssangyong Motors
in 2010. Top IT companies from India are
present in Korea as well.
Then there is the power sector. We have
a sizable power shortage in India, but we
are adding 12,000 megawatts of power
generation capacity per year now. Last year
we added 19 gigawatts of generation capacity.
India is also enhancing its civil nuclear
power generation capacity. We are the only
country currently doing that. India plans
to scale up its capacity from 5,000 megawatts
of nuclear energy at present, to 20000
MW by 2020 and 60,000 by 2035. Korea has
the technology, India has the desire. India
would like to absorb this expertise, and we
can collaborate closely.
Now let me take stock of India-Korea ties.
India and Korea are strategic partners who
enjoy a close and multifaceted relationship.
The state visit of President Lee Myung-bak