India, South Korea reset trade ties, aim to double flows to $50 billion by 2030

India and South Korea said on Monday that they would expand economic cooperation across energy, critical minerals, shipbuilding, semiconductors and steel, as both countries aim to double bilateral trade to $50 billion by 2030.

New Delhi and Seoul also agreed to resume and step up negotiations to revive their 2010 trade agreement. India is seeking a more balanced trade relationship, while South Korea is looking for greater market access to the world’s fastest-growing major economy.

South Korean President Lee Jae Myung is on a three-day visit to India, marking the first South Korean presidential state visit to the country in eight years.

“We decided to upgrade the framework of economic cooperation between the two countries to create a new engine ⁠for shared growth,” Lee told reporters after talks with Indian Prime Minister Narendra Modi.

Lee said the two countries have, for the first time, set up a ministerial-level economic cooperation committee. He added that cooperation would be strengthened in areas including nuclear power plants, clean energy, trade and investment.

With the Iran war affecting global energy supplies, Lee said India and South Korea would continue to cooperate to ensure a stable supply of energy resources and key raw materials such as naphtha.

Modi said Lee’s visit was extremely significant and that the two countries had taken important decisions to boost two-way trade to $50 billion by 2030 from around $27 billion at present.

“Today, we are laying the foundation for the success story of the next decade,” Modi said, as he referred to civilisational ties between the two countries that go back several centuries.

Minister of Commerce and Secretary Piyush Goyal said he held talks with his South Korean counterpart, Yeo Han-koo, to discuss ways to resume and revamp the trade pact. He said they also explored opportunities to deepen cooperation in industry, green energy and digital trade.

Lee is scheduled to attend a joint business forum later on Monday, where about 250 South Korean participants are expected, including leaders from Samsung Electronics, Hyundai Motor and LG Group, according to South Korea’s Yonhap news agency.

The two sides also plan to sign 20 private-sector memoranda of understanding on the sidelines of the forum, covering sectors such as shipbuilding, digital technology and energy, Yonhap reported.

Separately, POSCO Holdings said in a regulatory filing on Monday that its steelmaking unit plans to build a joint venture integrated steel plant with India’s JSW in Odisha. The company said its investment until end-2031 is expected to be about $1.09 billion.

The joint venture to set up a 6-million-ton-per-annum steel plant in Odisha was announced last week.

At a policy seminar at South Korea’s parliament last week, Maeng Hyun-chul, a research fellow at Seoul National University’s Asia Center, noted India’s longstanding concern over a widening trade deficit with South Korea. He said political ties had not kept pace with commercial ties.

According to Korea International Trade Association data, South Korea recorded a $12.8 billion trade surplus last year, with exports of $19.2 billion and imports of $6.4 billion.

Lee will travel to Vietnam after his visit to India.

(With inputs from agencies)