By Ahn Choong-yong
Professor, Chung-Ang University

“In the golden age of Asia and Korea was one of its lamp-bearers and that lamp is waiting to be lighted once again for the illumination in the East…”

So reads the first line of “The Lamp of the East,” a poem about Korea by the great Indian poet, Rabindranath Tagore. His words inspired hope, courage and perseverance in Koreans during Korea’s time of Japanese colonial rule. Today, Korea and India continue to support each other, most recently through the 11th Korea-India dialogue to deepen partnerships for the 21st century, co-organized by the Seoul Forum for International Affairs and the Indian Council for Research on International Economic Relations.

I was honored to be a part of this dialogue, which was held in Seoul very recently in a track II fashion between the opinion leaders of Korea and India. As the third and fourth largest economies in Asia, our nations have been making constant efforts to enhance their positions in the international arena as G20 members and are forging strong economic ties. These efforts resulted in the effectuation of a Comprehensive Economic Partnership Agreement (CEPA) between India and Korea in 2009. CEPA is Korea’s first FTA with a BRICs nation and India’s first FTA with an OECD country.

Until recently, the regional view of both countries toward Asia has been confined to the relatively adjacent economies, not being able to see a geographically broader spectrum within Asia beyond Myanmar. In fact, Korea and India formerly relied on different economic development paradigms. India had pursued an inward-looking import substitution policy until the early 1990s while Korea has adopted an aggressive outward-looking development regime since the early 1960s. However, bilateral relations between India and Korea have changed dramatically in the past decades and are likely to deepen further.

India and Korea in 2010 had almost equal GDPs and ranked among the 14 world economies with highly commendable growth performance in the past two decades. At present, the two economies share common values on democracy, humanity, an open society, the market economic system and outward and global orientation, not to mention past colonial experiences. Both countries have emphasized higher learning at domestic as well as foreign universities so that their diaspora, including elite professionals, are visible all over the world. Despite these similarities, Korea and India have almost opposite factor endowments in terms of land and population. As a result, they can benefit significantly as the CEPA dictates in this era of globalization. There have been significant direct investments into India by Korean companies such as Hyundai, Samsung, LG, Doosan and POSCO. There have also been direct investments by Indian companies into Korea, such as the Tata Group and Mahindra and Mahindra Ltd. Over the past two years, bilateral trade has also increased significantly thanks to CEPA.

However, this is just the beginning of expanding further and deepening linkages between Korea and India, given the tremendous collaboration potential between them. For example, India is a country of diversity with IT soft power and great back office functions while Korea is an IT hard power and advanced manufacturing powerhouse. By combining their mutual strengths, both countries can create an Asian Knowledge Platform. India is now fully headed toward economic transformation with the Delhi-Mumbai Industrial Corridor. Many similar projects and those requiring infrastructure projects are also envisioned for the years to come. Korea’s rich experience in overseas construction projects can be robust inputs in the process.

The Asia Development Bank predicted that India is likely to become the largest economy in the world, even surpassing the economic size of China by year 2050. India has joined East Asian regionalism in the ASEAN-plus-six framework (China, Japan, Korea, India, Australia and New Zealand) to cooperate in intra-regional issues ranging from security, environment, trade, finance and R&D to investment. India and Korea should co-navigate the way toward the emerging Asian pivot. Both countries should work together toward expanded East Asian integration to illuminate Asia by bring about a civilized and prosperous Asian century,

Dr. Ahn is also the foreign investment ombudsman at the Korea Trade-Investment Promotion Agency (KOTRA).

http://www.koreatimes.co.kr/www/news/biz/2012/10/346_123318.html