India became an independent nation 60 years ago yesterday. Congratulations!
And to celebrate the day, the South Korean president was invited to attend the Indian version of the White House state dinner. What does the two countries have in common?
A lot of trade, as it turns out.
Since the end of the cold war, India has followed a “Look East” policy that calls for building deeper trade and security ties with Asian nations rather than focusing on Europe and America. India is now diving into economic integration with Asia, beginning with a new comprehensive trade deal with South Korea.
Economically, the two countries excel at relatively different things.
“India is very good at software, Korea is very good at hardware. Similarly, there are complements between different sectors where trade should be much more, but we haven’t gotten to that level because of trade barriers.”
Well, that is, until India becomes better at hardware – Tata? And Korea gets in the way of Infosys.
In the meantime, Korea will lend its expertise to India in infrastructure, and India will reward the knowledge transfer with those massive contracts.
On the eve of the visit, New Delhi gave the environmental OK to a South Korean firm to build a $12 billion steel plant in the Indian state of Orissa. The project represents the biggest foreign investment in the country.
South Korean companies won nine of the 44 contracts for India’s National Highway Development Project. And the country has manufactured trains for the darling of India’s new infrastructure projects, the Delhi metro.