India and South Korea have committed to enhancing their economic and strategic partnership, aiming to increase bilateral trade from approximately $27 billion to $50 billion by 2030. The two countries agreed to establish Korean Industrial Townships in India to facilitate investments by Korean companies, especially small and medium enterprises (SMEs). Negotiations to upgrade the Comprehensive Economic Partnership Agreement (CEPA) will resume within the next year to strengthen economic ties.
Korean Industrial Townships in India
Korean Industrial Townships are designated zones aimed at attracting Korean investments and promoting industrial collaboration. These townships will provide infrastructure and regulatory support to Korean SMEs for manufacturing and services in India. The initiative is expected to enhance technology transfer and create employment opportunities in host states.
Institutional Mechanisms and Sectoral Cooperation
New institutional frameworks include the India-Korea Financial Forum and the Industrial Cooperation Committee to boost financial flows and business cooperation. An Economic Security Dialogue has been initiated to collaborate on critical technologies such as semiconductors, artificial intelligence, and advanced manufacturing. Sectoral cooperation extends to shipbuilding, steel, sustainability, critical minerals, nuclear and clean energy, and defence.
Recent Developments and Investment Initiatives
In December 2025, HD Hyundai signed a memorandum of understanding with Tamil Nadu to build a new shipyard, aiming to replicate the scale of Ulsan, South Korea’s largest shipbuilding hub. Chhattisgarh organised an Investor Connect event in Seoul in September 2025 to attract Korean investments in IT, semiconductors, healthcare, clean energy, and food processing under its new Industrial Policy. India-Korea bilateral trade stood at around $27 billion as of 2025. The Comprehensive Economic Partnership Agreement (CEPA) between India and South Korea was signed in 2009 and is subject to periodic upgrades.
Last Modified: April 20, 2026