Food, Cars, Electric and Electronics Promising in India with Population of 1.3 Billion

-     Korea is behind the United States, China and Japan in IT, telecommunications, e-commerce, smart city, etc… government supports are required ？

It appears that it is promising for Korean manufacturing areas such as packaging materials, processing machines, automobiles, electric and electronics to enter into India, a huge market with a population of 1.3 billion.

The Korea International Trade Association (Chairman, Kim Young-joo) issued a report titled ‘Strategies and Implications for Small and Medium-Sized Enterprises to Expand into the Indian Market’ and assessed that India’s competitiveness for manufacturing value chain, including food manufacturing and processing, automobiles and electric and electronics is relatively weak.

According to the report, India's food manufacturing, processing and packaging industries are experiencing rapid growth. However, due to the poor manufacturing technology and logistics infrastructure of local companies, the exports of Korea’s packaging materials, processing machinery and cold chain technology as well as business expansion through mergers and acquisitions with local distribution companies will be promising. In addition, India's automobile and electrical and electronic industries depend heavily on overseas companies in research and development (R & D) and after-sales service (A / S). Therefore, there is high possibility for Korean companies to advance into the local market with Korea’s high technology and customer management know-how.

On the other hand, when it comes to information communication technology (ICT), e-commerce, and smart city, which are future industries, Korean companies’ competitiveness in India is relatively weak. In case of ICT and e-commerce industries, awareness of Korean companies in India is insignificant as Korean companies are behind in the competitions for technology and investment due to the capital power gap between Korean companies and global corporations of the United States and China. India is planning on large infrastructure projects in order to build 100 smart cities by 2020, but Korea does not have enough participation strategies or support from the government level.

In regard to this, a game company Zeppeto, which provides online FPS (First-person shooter) game called 'Point Blank' in more than 60 countries, has recently met with the Korea International Trade Association  and expressed its difficulties to compete with the companies of the United States and China with a huge capital power. Cho Young-il at Zeppeto pointed out, "In order to Korean companies to successfully make inroads into the IT and telecommunications markets in India, the Korean government needs to build a new technology development support system at the national level."

Ssangyong E & C, which is involved in building smart cities in India, has world-class construction technology. However, the company is closely watching the market situation as India does not have proper infrastructure environment. Lee Kyung-kwon, head of India branch, stressed, "India's smart city market is still in its infancy. In order to win project orders, large-scale support at the national level is required."

Therefore, as the keys to success for Korean companies in the Indian market with a population of 1.3 billion, the report suggested ▲ fast-track system that eliminates various procedures to select promising IT technologies and foster companies, ▲ tax support for e-commerce companies, ▲ activate country-led project consortiums through official development assistance (ODA), and ▲ sustainable financial deregulation.

Ahn Geun-bae, head of KITA's Trade Policy Support Division, said, “In order for Korea to dominate the Indian market in competition with global companies from Japan, the United States, and China, it is urgent to provide diverse policy supports, including government’s support for next-generation technology development, tax benefits, and stronger financial support.”