President Lee Jae-myung, on a state visit to India, said relations between Korea and the world's fourth-largest economy have been "not sufficiently satisfying," speaking at a meeting with Korean expatriates on Wednesday. "Although ties have developed considerably since the establishment of the Special Strategic Partnership in 2015, they have been stagnant for a long time," he noted.
Lee held a summit with Indian Prime Minister Narendra Modi on Thursday local time and agreed to officially launch negotiations next month to improve the Korea-India Comprehensive Economic Partnership Agreement (CEPA), with the goal of concluding them by the first half of 2027. Having said a day earlier at the expatriate gathering that "there is a very high possibility that Korea-India relations will develop into an entirely different dimension" after the summit, Lee expressed confidence in building a new relationship. At the summit held at Hyderabad House in New Delhi, Lee and Modi signed 15 government-to-government memorandums of understanding (MOUs), including on the CEPA improvement. Companies from both countries also concluded 20 MOUs, accelerating the expansion of economic cooperation. Based on this, the two nations specified a goal of reaching $50 billion in bilateral trade by 2030.
Lee and Modi agreed to elevate the stagnant bilateral relationship. In a joint press statement following the summit, Lee said, "We have agreed to expand cooperation in strategic industries including shipbuilding, finance, artificial intelligence (AI), and defense, and to further strengthen cultural and people-to-people exchanges." Modi said, "We will expand cooperation opportunities in talent exchange, shipbuilding, environment, and energy to create a success story over the next 10 years."
However, although Korea and India have formed a multifaceted friendly relationship significant enough to establish a Special Strategic Partnership, the scale of their economic trade has fallen short. While some 10,000 Korean companies have advanced into Vietnam, only about 700 have entered India. Trade volume, which stood at $17.1 billion when the CEPA took effect in 2010, reached only $25.7 billion last year, 15 years later. It is not as if there was no effort. In 2018, then-President Moon Jae-in also visited India, touring the Gandhi Memorial in New Delhi with Modi and riding the subway together to visit a Samsung plant, as efforts to elevate bilateral relations continued under past administrations as well.
A senior Presidential Office official declared that unlike past Korea-India relations, this time "the tenacity of the leader and the capabilities of Korean companies have changed." At the New Delhi press center, the official said, "Every time there is a summit, the small-group meetings with President Lee become denser and longer." This time too, Lee reportedly devoted about 80 to 90 percent of the small-group meeting with Modi to economic issues, with intense focus.
"In the leaders' conversation, when President Lee specifically asked again about the difficulties of Korean small and medium-sized enterprises that he had heard at the expatriate meeting, Prime Minister Modi also responded in detail," the official said. "A shared understanding was formed between the leaders regarding the lower-than-expected outcomes (in bilateral relations) over the past five to 10 years." He added, "You know well President Lee's tenacity when it comes to work. That is why things will change significantly going forward." He also explained, "Our companies' capabilities have grown, and the Indian market has become more important."
Reflecting this, cooperation including government-to-government MOUs and corporate partnerships took shape in a way that combines Korea's technology and capital with India's market and production base. POSCO Holdings (005490.KS) signed a joint investment MOU worth approximately 10.76 trillion won ($7.8 billion) with India's JSW Group and will proceed with the construction of a local steel mill. HD Hyundai (267250.KS) has decided to build a new shipyard in India, and Hyundai Motor (005380.KS) will begin joint development of a three-wheeled electric vehicle.
Kim Yong-beom, chief of the Presidential Office's policy planning, also said at a briefing that day, "A highly unusual event was held that broke from convention by inviting business figures to Prime Minister Modi's state luncheon, a government diplomatic event," citing it as a representative example of parallel efforts to strengthen diplomacy and economic cooperation.
