By Choe Nam-suk, vice chairman of The Korea Post media
The following details are based on an interview with Chairman Vasudev Tumbe of the Indian Chamber of Commerce in Korea conducted recently by The Korea Post media.—Ed.
Question: First of all, please introduce the activities of the Chamber, including it's history, organization and main activities.
Answer: The Comprehensive Economic Partnership Agreement (CEPA), which came into force on January 1, 2010, provided the impetus to form a Chamber of Commerce in Korea to represent the interests of Indian businesses and advocate positions that would enhance commerce between the two countries. At the behest and encouragement of the Embassy of India in Seoul and members of the Indian community in Korea, Korean supporters of a strong India/Korea partnership, the Indian Chamber of Commerce in Korea (ICCK) was formally established in January 2010.
ICCK’s affairs are managed by a Secretariat under the guidance of board of Governors with strong support from the Indian embassy in Korea.. From a modest beginning, ICCK’s membership base is expanding steadily every year & is now poised to grow at a faster pace thanks to the interest shown by Korean businesses in the India opportunity.
ICCKs’ vision is to play a vital & valuable role in the economic development & trade promotion between India & Korea.
ICCK’s mission is to foster economic development & enhance quality of trade between India & Korea through:
Development: Promote Indian investment in Korea & Korean investment in India that leads to economic & cultural development.
Awareness: Share business information on India to Korean businesses & on Korea to Indian businesses.
Advocacy: Advocate & support trade policies that increase commercial relations & improve quality of trade between India & Korea on behalf of stakeholders
ICCK serves as the nodal organization to help state & provincial governments and businesses in India and Korea to maximize economic and cultural opportunities.
ICCK arranges meetings for Korean businesses when state government delegations come from India. ICCK also arranges Speakers’ forum, net-working events & the annual Diwali Ball giving our members various opportunities to network.
The goal for this year is to create more awareness to increase the number of members, arrange business meetings with government delegations & other networking events.
Q: Please introduce the ICCK's major achievements and contributions to the Korean industries for enhancing economic ties between Korea and India.
A: India is the fastest growing large economy in the world today with a population of 1.3 bn. The current government is taking various steps to enable ease of doing business & attract foreign investment. There is a growing interest of Korean businesses to know more about India & also state delegations from India are coming to Korea to present their case.
ICCK has a big role to play in this scenario, by serving business information, holding seminar or events and broadening the network of Indian and Korean companies. Many companies ask for the information of business partners or route for extending their business to the other country. It is too early to quantify the benefits but I can add that in 2017, bi lateral trade between Korea & India increased by over 25% after being stagnant for last 2-3 years.
Q: Please introduce India's investment environment and special favors for foreign investors.
A: India’s 2.5 trillion USD economy which is growing at over 7% comprises of 15% agriculture, 31% industry including manufacture & 54% service sector.
Make in India’ is the most ambitious program launched on September 25, 2014 by the Prime Minister of India to encourage multinational, as well as domestic, companies to manufacture their products in India.
Boeing, Airbus Group, Fiat Chrysler Automobiles, Ford, Hitachi, Lenovo, Foxconn, & many others, have committed to participate in Make in India.
Kia Motors has committed to invest more than 1 bn USD to set up a car manufacturing plant in India.
Also, Indian government has eased the regulation for FDI to attract foreign investment to India. Below are some indicators for the improving investment climate:
a) India has jumped 30 places in the Ease of Doing Business Rankings
b) Since 2013, 5.3% points improvement in India’s investment grade compared to 0.4% for all countries.
c) As per EY attractiveness survey, India is ranked no. 1 among the three most attractive markets for investment in the next three years by the investors. Overall, 70% of respondents from companies with revenue above US$ 2 billion said they plan to expand or relocate manufacturing facilities to India in the next five years.
The Goods & Services Tax Act introduced in July 2017 is a major tax uniform aimed at simplifying various taxes into one by consolidating & ensuring an item has one rate of VAT across the country. This will go a long way in enhancing trade as well as compliance.
There is also a focus on Digital development which will enhance transparency.
There is a slogan ‘no more red tape, only red carpet’ for foreign investment.
Q: What industrial sectors are attractive to Korean companies wanting to invest in India?
A: The Indian Government has identified 25 key thrust sectors, such as Auto components, Automobiles, Biotechnology, Chemical, Defense Manufacturing, Electrical Machinery, infrastructure like roads, ports, railways, Food Processing, IT, Leather, Mining, Textiles and etc.
Currently over 500 Korean Companies which are in India are mostly located in Delhi, Mumbai, Pune, Hyderabad, Bengaluru and Chennai. We have to consider which sectors each state is focusing on. For example Telangana state, they focus on IT Hardware, Plastics and Polymers, Textiles, Life Sciences and Precision Engineering. Whereas Tamil Nadu state, focus on automobile and Computer hardware & software sectors.
In fact, Korea has strong capabilities in many of these sectors like automobile, electronics, chemicals, defense, ship building, construction, etc & hence it is a great opportunity for Korea.
Q: What is your view of further strengthening the economic ties between India and Korea.
A: Although Hyundai, Samsung & LG have done well in India & are household names, Korean businesses have not been confident of the business environment in India.
Especially the Posco incident is fresh in everyone’s mind! But Posco has moved on & set up a smaller project in another state.
What gives me confidence now is the current Indian government’s initiatives & tax reforms which has already started attracting lot of investments.
Kia’s plan to set up a car manufacturing unit will mean more auto parts suppliers will follow.
Korea Plus is a one stop shop set up in 2016 to facilitate opportunity assessment, partner/location search, policy guidance, etc. in India.
ICCK is spreading awareness of the India opportunity by conducting seminars, arranging meeting with government delegations.
I am sure all these steps will help to enhance bi lateral trade between the two countries.
I strongly feel Korea has the required capabilities to succeed in India & if they don’t go to India, someone else will!