• 88% of Korea’s Investment in India Goes to Manufacturing Industry While the World Focuses on Service
    2019-12-31 hit 1648

    88% of Korea’s Investment in India Goes to Manufacturing Industry While the World Focuses on Services

    - KITA studied economic trends and investment environment in India need to cooperate in the new industries such as bio industry -

    It appears that while the world is expanding its investments in India’s service industries, Korea’s investment is engrossed in manufacturing businesses.

    According to a report titled “Assessment of the Latest Economic Trends and Investment Environment in India” issued by the Institute for International Trade (President: Shin Seung-kwan) of the Korea International Trade Association on December 31st, the foreign direct investment (FDI) in India from all over the world between 2010 and 2018 expanded over 54.4 percent from 27.4 dollars to 42.3 dollars whereas the world’s investments in China and ASEAN increased only 21.2 percent and 31.6 percent, respectively, during the same period.


    As of last year, India had 802 cases of Greenfield Investment, which directly establishes production facilities in the developing countries of New Southern region. It was 2.8 times more and 6 times more of those of Vietnam (290 cases) and of Indonesia (133), respectively. In terms of each country's share of FDI in India, Singapore took up 37.4 percent ($ 15.1 billion), followed by Mauritius (20.5%, $ 8.3 billion) and the Netherlands (8%, $ 3.2 billion).


    By industry, service industries such as banking, insurance, outsourcing, etc. accounted for the largest portion with 28.4 percent (8.3 billion dollars), followed by computer (20%, 5.8 billion dollars) and vehicles (8%, 2.3 billion dollars).

    The report pointed out, “Korea’s FDI last year was over 1 billion dollars. However, 88.3 percent of it went to manufacturing sector and Korea’s investments in other promising areas are rather slow,” and added, “Since India is strengthening trade protectionism focusing on manufacturing businesses by practicing antidumping measures, Korea needs to diversify its investments.”    

    The report also stated, “Recently, India’s industries that are attracting investments from all over the world are services, telecommunication, construction infrastructure, etc.” and added, “Their investment direction is different from that of Korea which focuses on automobiles and trailers, metal products, chemical substances and goods.”

    Cho Eui-yoon, a researcher at the Institute for International Trade, said, “The investment environment in India is improving. However, there are many risk factors such as sluggish economy and trade protectionism. Therefore, it is necessary for Korean companies to make inroads into the country with countermeasures.” The researcher also advised, “Korea needs to strengthen bilateral cooperation in the new industries such as bio, IT, and energy that can create significant synergy effect and carry out preventive measures against trade remedies and resolve corporate difficulties simultaneously.

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