Geun-hye Park, the President of the Republic of Korea, was recently on a visit to India as her sixth tour since she took office in February 2013. As indicated in her speech at a New Year’s meeting, economy is the keyword in the second year of her tenure, and how ‘creatively’ the Korean economy is revitalised through diplomacy was the main agenda in this visit.

Similar to her previous tours, the expectation is mainly placed on successful ‘sales diplomacy’ that extends Korean business in India and upgrades the Comprehensive Economic Partnership Agreement (CEPA). According to the 2013 Korean Diplomatic White Paper, Korea’s exports to India increased to US$11.9 billion while Korea’s imports from India increased to US$6.9 billion in 2012, and the total trade volume increased by 55 per cent in 2012 compared to 2009, one year before CEPA came into force. President Park’s visit to India would institutionally upgrade the agreement to foster favourable conditions in business and trade.

The prospect of economic opportunity in India is considered promising with India’s twelfth five-year plan from 2012 to 2017, spending a total investment of US$1 trillion on infrastructure projects. 1.2 billion people in India’s domestic market also contribute to its potentiality of growth that increases the expectation in Korea. India’s advanced technology, proven by its space programme and development of information and communications technology (ICT), is deemed critical for a ‘creative economy’, the blueprint of President Park for the next three years.

In some ways, Korean companies in India are often compared to those of Japan. For example, Korea formulated CEPA earlier than Japan; however, it is far less active in Foreign Direct Investment (FDI) than Japan. Kwak Chang-ho, Director and Chief Representative of POSCO Research Institute-India, pointed out in a conference held in December 2013 in Seoul that Korea’s FDI in India is merely one-tenth of Japan. He suggested vitalisation of the Indian special economic zone and FDI incentive policy to enhance Korea’s involvement. It was observed that Japan’s FDI had increased in China that towed global FDI since the 1990s; however, Japan has diversified its FDI and shown varied destinations of investment after the mid-2000s. In this regard, it would be meaningful to refer to Park Min-Joon, Director of KOTRA Chennai, who has analysed that Japanese enterprises will expand investment in India in multifaceted ways to decrease dependence on China.

Korea’s expectations from relations with India come from the experience of substantial benefit from ‘China Rising’. Korea has successfully restored relations with China after the 1992 normalisation despite residual enmity from the Korean War experience and different views on the North Korean issue, and has been one of the beneficiaries of China’s economic development with geographic proximity. As of 2012, the volume of trade between Korea and China totalled US$215.1 billion, accounting for 20.1 per cent of Korea’s total trade.

Other important areas for bilateral cooperation between India and Korea include military and defence sectors, which are experiencing gradual progress. Shin Kyung-Soo, the deputy head of the international policy division in the Ministry of Defense, South Korea, has underlined that the defence industry has been one of the most attractive sectors throughout the progress of Indo- Korean relations. With a 1.3 million-strong military force and a defence budget that reached almost US$40 billion in 2012, modernisation of Indian forces is expected to provide a huge market for defence industry. India’s US$1.2 billion contract to the Korean company, Kangnam Corporation, for eight mine-counter-measure vessels with technology transfer condition has set a good precedent. What President Park might add through her visit would be, first, strategic dialogue between national security offices, second, the foundation for a military intelligence protection agreement, and finally, furtherance defence industry cooperation.

Broadly speaking, a common strategic interest is being envisioned between the two countries, which is strongly required to elevate relations to a genuine strategic partnership. It was through the Bush administration that the US and India found areas to cooperate in, given worsening US-China relations and the Pakistan threat with China working behind the scenes. It is easy to see that India and Japan would find stronger strategic commonalities during the Japanese Prime Minister’s visit in January, given the close relations between Japan and India and the geopolitical predicament of territorial disputes to China’s east and west. It is the same with Korea-India relations - common strategic interests would further facilitate the cooperation. However, Korea’s attempts should not depend on the US-Japan-Korea trilateral alliance, nor should it be indifferent to India’s core interests. Owing to this, President Park’s initiative of a ‘creative economy’ is expected to further evolve into the mapping out of a ‘creative strategy’ in Korea-India relations.