Professional Documents
Culture Documents
RAJIV KUMAR
⁄This work was supported by the National Research Foundation of Korea Grant funded by the Korean
Government (NRF-2017S1A6A3A02079749).
RAJIV KUMAR is a Research Professor at the Institute of Indian Studies, Hankuk University of Foreign
Studies, South Korea. He also teaches at the Department of East Asian Studies, Sungkyunkwan Uni-
versity, South Korea. Dr. Kumar has been an Affiliate Scholar at the East-West Centre in the United
States. He can be reached at <mailrajivsingh@gmail.com>.
This is an Open Access article published by World Scientific Publishing Company. It is distributed under
the terms of the Creative Commons Attribution 4.0 (CC BY) License which permits use, distribution and
reproduction in any medium, provided the original work is properly cited.
by contending that the two countries are “natural partners” in reshaping the supply
chain dynamics in East Asia in the post-COVID-19 era.
KEYWORDS: Geopolitics; geo-economics; supply chain; East Asia; India; South Korea;
post-COVID-19 era.
* * *
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Introduction
1Gilpinused the concept “economic security dilemma” with regard to economic regionalism that was
emerging in the 1990s and the early 2000s (Gilpin, 2000, 2001).
violent clash in June 2020, has driven India to redesign its developmental strategy,
which now has two grand action plans: (1) ending China’s control of global supply
chain and (2) establishing India-centric supply chains in key industries. To accomplish
these tasks, India has launched various initiatives. First, it embarked upon economic
decoupling from China. Second, India stressed its endeavor to be a self-reliant
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supply chain security, a development that we term as “Quad Phase Two,” highlights
this point. New Delhi has also sought to strengthen the supply chain structure with
other like-minded countries beyond the Quad countries.
Similarly, Korea has also been redesigning its strategy concerning the supply
chain, with the China-related factor playing a key role in this change. The emergence
of political disputes between Seoul and Beijing, combined with Korea’s growing
competition with China to capture the top position in many key industries, has forced
Korean policy-makers to rethink Korea’s overreliance on the China-centric economic
system. In this regard, Korea has adopted a strategy to mitigate supply chain-related
risk through greater emphasis on developing strong self-reliance and promoting eco-
nomic diversification by enhancing its economic ties with the Association of Southeast
Asian Nations (ASEAN) and India. In addition, the pandemic-induced supply chain
disruptions further reinforced the Korean belief that the country needs to diversify its
supply chain away from China to ASEAN and India. Above all, Seoul is also
reshaping its alliance with its leading security partner, the United States, by including
supply chain cooperation in the Korea–US ties. This move has brought Korea closer to
liberal countries’ group that seeks to restructure global and regional supply chains
beyond China.
What are the implications of the aforementioned developments for the India–
Korea economic ties? Significant development concerning supply chain cooperation
has occurred between the two countries amid the COVID-19 pandemic. This crisis
provided an opportunity to open a high-level political exchange between the two
countries concerning supply chain. Apart from political discussions, the supply chain
cooperation between New Delhi and Seoul deepened as tangible outcomes were
achieved during the pandemic. To illustrate, on the one hand, India especially invited
Korean companies to leverage the PLI schemes, which were designed to reshape
supply chain beyond China, in key strategic sectors. On the other hand, Korea began
to view India as a valuable partner in its supply chain diversification strategy. Con-
sequently, the presence of Korean conglomerates and small- and medium-sized
enterprises (SMEs) in India significantly enhanced during the pandemic. How im-
portant are the two countries to each other in the future? This paper argues that
technologically advanced Korea could be a crucial partner for India, which seeks to
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end Chinese dominance in global supply chain and develop itself into a supply chain
hub for key strategic areas. Similarly, for Korea, which aims to reduce its economic
dependency on China, a rising India can be an important partner to realize this goal. In
sum, in this study, I conclude that the two countries are “natural partners” in reshaping
the supply chain dynamics in East Asia in the post-COVID-19 era.
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The remainder of this paper is organized as follows. The next section explains
the emerging supply chain paradox in East Asia, followed by a discussion on the new
strategies of India and Korea regarding supply chain. Thereafter, it will shed light on
key developments in the India–Korea supply chain cooperation amid the COVID-19
crisis. Finally, the concluding remarks are presented.
Contrary to liberal international relations theory, realist insights suggest that the
deepening economic integration among the major powers is a source of conflict.2 This
realist insight is significant to understand the contemporary dynamics of supply chain
in a contested East Asia. In the post-Cold War liberal era (Mearsheimer, 2019), China
emerged as one of the largest economic partners of all regional economies. However,
in recent years, China-related economic and political risks have forced many countries
in East Asia to reduce their reliance on China and recalculate their strategy with
respect to supply chain dominated by a China-centric economy system. Indeed, in the
pre-COVID-19 era, the rise of labor costs in China, combined with the US–China
trade and technological war, induced many countries, especially Japan and Korea, to
minimize the supply chain risks by reducing their overdependence on Chinese market.
In this regard, they adopted a dual strategy: (1) to reduce investment in Chinese and (2)
to increase investment in Southeast Asia and South Asia. This strategy was commonly
known in East Asia as the “China Plus One” (CPO) strategy (Iida, 2015; Kim & Cho,
2Liberal international relations theory holds that economic interdependence facilitates interstate peace and
collaboration. On this point, see Barbieri (1996) and Moravcsik (1997).
China significantly emerged in the region. In sum, the US-China trade and technological
war, combined with Asian regional powers’ escalating tensions with a rising China,
caused the restructuring of supply china in East Asia in the pre-COVID-19 era.
The COVID-19 crisis, which heavily disrupted the global supply chain primarily
due to its dependence on one source (China), further accelerated this restructuring
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process. Indeed, for the post-COVID-19 era, major powers are designing a “multi-
directional strategy” to restructure the supply chain reliance “beyond China.” In doing
so, first, they have adopted a reshoring strategy (Suzuki, 2021). Under this strategy,
major powers like the US, Japan, and Korea have announced key subsidies for their
companies to relocate their manufacturing facilities from China to their respective
home country. In Japan and Korea, two archetypal developmental states in Asia, this
reshoring strategy has been part of their national missions to build key domestic
industries.4 In addition to reshoring strategy, major economies also welcome com-
panies from main allies to develop a domestic supply chain in the key strategic sectors.
The US’s quest to build a US-centric supply chain in the semiconductor industry
with the help of main allies such as Korea, Japan, and Taiwan and Japan’s approval
of the chip development project with Taiwan’s TSMC (Taiwan Semiconductor
Manufacturing Company) underscore this point.
In another remarkable development amid the COVID-19 crisis, developed
economies in the region are providing incentives to their firms to relocate their
manufacturing facilities from China to other friendly developing countries. For in-
stance, in the immediate aftermath of the COVID crisis, Japan announced sufficient
incentives to Japanese companies to shift their manufacturing production from China
3Although Japan and Korea’s CPO strategies have a similar objective, that is reducing the economic
reliance on China while strengthening the economic ties with ASEAN countries and India, some dif-
ferences exist between them. For example, Japan is much more aggressive than Korea in implementing
this policy. On this point, see Kim & Cho (2018).
4It should be noted that both Korean and Japanese governments have designed a policy to support their
firms to bring their production back from China to home. It is known as the “U-turn” policy in Korea,
which is in effect since the Korean government introduced its U-Turn Law in 2013. This policy approach
is still dominant in Korea as the Moon administration also lured the Korean firms to shift their production
to Korea under his government’s Korean-style New Deal ( ) for the post-COVID era. In Japan,
since the Abe government came into power in 2012, the Japanese government’s one of the key strategies
has been to shift Japanese companies’ production facilities from China to Japan. The Suga government
has followed suit.
to Southeast Asia and South Asia under its “exit China” strategy. In addition, the US
has also encouraged American firms to enhance their footprint in ASEAN and India at
the expense of Chinese market.
If advanced economies in the region are reconsidering their existing economic
strategy, developing countries also design a new strategy to attract those companies
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moving away from China. Countries in the ASEAN region, such as Indonesia and
Vietnam, are expected to be the next destination for those Korean, Japanese, and even
US companies planning to exit China. Consequently, they have adopted active eco-
nomic diplomacy to maximize the opportunity. In June 2020, Indonesia initiated a talk
with the US government to attract US firms from China. The Vietnamese government
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Table 1.
India’s Quest for Economic Decoupling from China Amid COVID-19
April 2020 India’s new FDI rules restricted Chinese investment in India
June 2020 India banned 59 popular Chinese apps, including TikTok and WeChat
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July 2020 Over 200 Chinese investment proposals were frozen by the Indian government
September 2020 India banned 118 Chinese apps, including PUBG and Tencent
October 2020 Chinese smartphone makers were not allowed to participate in the mobile
manufacturing PLI scheme
October 2020 India put sticker investment rules for the Chinese EV battery makers to
participate in the PLI scheme for EV industry
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November 2020 India banned 43 Chinese apps, including Alibaba Group Holding’s AliExpress
May 2021 India blocked China-made wireless device imports
May 2021 India excluded Huawei and ZTE from participating in the 5G trials
Source: Author’s research.
global supply chain and (2) establishing an India-centric supply chain. These new
plans directly result from the geopolitical developments such as China’s growing
aggressiveness with India, especially in dealing with the territorial issue. To put it
simply, the recent border clashes, especially the Galwan Valley violent clash in May
2020, have forced Indian policy-makers and strategic thinkers to recalculate its China
strategy. As a result, most of them now believe that India should reshape its economic
strategy regarding a China-centric economic system (Interviews, New Delhi, April
2021). Against that background, the Indian government embarked on an economic
decoupling with China by introducing several trade and investment restrictions for
Chinese companies, banning popular Chinese apps in India, and putting sticker in-
vestment rules for Chinese companies to participate in the PLI schemes (see Table 1).
Equally significant, the Indian government also began to reshape its foreign
economic policy with respect to the supply chain. In August 2020, the Indian Foreign
Minister S. Jaishankar, for example, stressed on “strategic autonomy” for India con-
cerning the supply chain and sought to mitigate supply chain-related risks through
greater emphasis on diversification and resilience (MEA, 2020a). In the immediate
aftermath of the Foreign Minister’s strategic autonomy push, Prime Minister Modi
pitched India as an alternative to China in the global supply chain at the virtual
meeting of the US–India Strategic Partnership Forum in September 2020. He stated:
“The pandemic has shown the world that decision on developing global supply chain should
be based not only on costs. They should also be based on trust. Along with affordability of
geography, companies are now also looking for reliability and policy stability. India is the
location which has all of these qualities.” (MEA, 2020b)
In addition to ending China’s control over the global supply chain, as mentioned
above, India has also sought to establish an India-centric supply chain. In the process,
the Indian government initiated various policies; one among them is a game-changer
plan, the PLI scheme. This scheme was first announced in March 2020 and promoted
under the Self-Reliant India Mission ( ) during the announcement
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“The PLI scheme across these 10 key specific sectors will make Indian manufacturers
globally competitive, attract investment in the areas of core competency and cutting-edge
technology; ensure efficiencies; create economies of scale; enhance exports and make India an
integral part of the global supply chain.” (PIB, 2020)
5For instance, India’s External Affairs Minister S. Jaishankar highlighted the significance of PLI for
enhancing India’s national capacities and integrating India deeper into the global supply chain
(MEA, 2021).
6Structural realists predicted that China’s economic and military rise would force other regional powers to
forge security alliances (Mearsheimer, 2001; Waltz, 2000).
elected Japanese PM Suga emphasized at their first official conversation that for the
post-COVID-19 era the economic architecture of a free, open, and inclusive Indo-
Pacific region must be premised on “resilient supply chain,” and urged cooperation
between India, Japan, and other like-minded countries in this regard (MEA, 2020c). In
that context, in April 2021, India, Japan, and Australia formally launched the Supply
Chain Resilience Initiative, a move that finally institutionalized supply chain-related
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Like India, Korea has also adopted a new approach to address supply chain
challenges. It is manifested in the fact that in recent years, the most crucial strategy of
Korea with regard to its new developmental plan has been to secure the supply chain in
key strategic sectors. It is in that context that Korea sought to implement two important
strategies: (1) to reduce Korean companies’ overdependence on its leading economic
partner, China,7 and (2) to diversify the country’s economic relations by deepening
Korea’s economic ties with Southeast Asia and India under the Moon administration’s
New Southern Policy (NSP). Geopolitical and geo-economic factors have played a key
role in shaping Korea’s aforementioned regional economic strategies. It is significant
to highlight that Korea developed strong economic ties with China in the post-Cold
7The Moon administration has also sought to reduce Korea’s supply chain dependence on Japan in key
sectors. However, I will remain focused on Korea–China economic ties for this paper, as China is Korea’s
most significant trade and investment partner.
War era as Seoul perceived China’s economic rise as an opportunity for the Korean
economy (Kumar, 2015b). However, the emergence of various political and security
disputes between Seoul and Beijing in the 2010s — especially China’s economic
retaliation against Korea over the deployment of US’s missile defense system called
Terminal High-Altitude Area Defense — forced Korean policy-makers to believe that
the country’s overdependence on China is a “threat.”8 Equally significant, as Weiss
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and Thurbon (2021, p. 476) suggest, in recent years, “China’s rapid technological rise
is also perceived in Seoul as a major threat for Korea’s future manufacturing capacity,
technological autonomy and export competitiveness.”
The COVID-19 crisis further reinforced the belief that Korea needs to reduce its
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over-reliance on one source as the crisis severely affected Korean companies’ pro-
duction due to their overdependence on one source, namely the China-centric supply
chain (Chosun Ilbo, 2020). In addition, Korea’s growing competition with China for
grabbing the top position in many key industries has also provided opportunities for it
to achieve “strategic autonomy” for the country concerning the supply chain that will
help realize its leadership position. President Moon said the following in July 2021
during his government’s official launch of battery development strategy:
“In 2011, Korea rose to No. 1 in terms of global market share for small-sized batteries,
overtaking Japan. We are competing fiercely with China to take the lead in mid-to large-sized
batteries as well. Our goal is obvious: to become the undisputed No. 1 country for batteries by
2030.” (The Blue House, 2021)
Taking all together, policy-makers in Seoul now firmly believe that Korea should
immediately seek to mitigate supply chain-related risks through greater emphasis on
developing strong self-reliance and promoting economic diversification.
Against that background, the Korean government has enhanced its role to or-
ganize economic activities to address new emerging challenges for the Korean
economy.9 The Korean State’s growing role in the economy can be characterized as
internal strategy and external strategy. Under its internal strategy, the Moon admin-
istration has embarked on a developmental state strategy, through which it seeks to
make Korea what President Moon called the “world factory of high-tech industries”
( ) (The Blue House, 2020). Accordingly, the government has
8For more details about how political and security issues in the 2010s transformed Seoul’s strategic
perception about the economic rise of China and its economic dependence on China, see Kumar
(2015b, 2018).
9The COVID crisis has provided an opportunity to confirm that the Korean State’s institutional capacity
has not declined as claimed by the declinist literature. On the contrary, the Korean State has enhanced its
activism to tackle pandemic-induced health and economic challenges during the crisis. For more details
on this point, see Kumar (2021).
adopted the traditional developmental means to accomplish this task, such as fostering
a strong alliance between state and business.10 It is manifested when the government
announced the “K-Semiconductor Strategy” (K- ) in May 2021 to build
the world’s biggest semiconductor supply chain by 2030 (MOTIE, 2021). Under this
strategy, the government joined hands with Korean giants, like Samsung Electronics
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and SK Hynix, to sharpen the country’s competitive edge and to achieve supply chain-
related self-reliance in this sector. Similarly, for the post-COVID-19 era, the govern-
ment is also building a robust supply chain in other core strategic industries through a
strong collaboration with Korean business giants. For example, the Moon government
announced the “K-battery development strategy” (K- ), and ex-
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tended its key support for the emerging electric vehicle battery alliance among the
Korean giants — known in Korea as the “K-battery alliance” (K- ) (The
Blue House, 2021).
On the external front, Korea now seeks to mitigate supply chain-related risks by
adopting the diversification of the supply chain. It is important to highlight that the
Moon administration launched the NSP in 2017 amid China’s growing economic
retaliation against the Korean companies. One of the major aims of this policy was to
diversify the country’s economic relations by reducing its economic dependence on
China and by deepening its trade and investment ties with ASEAN and India (Kumar,
2018). The COVID-19 crisis further influenced Korea’s economic strategy in this
regard. According to Korea International Trade Association’s (KITA) August 2020
report, Korea needs to diversify its supply chain from China to India and ASEAN in
the post-COVID-19 era (KITA, 2020). Moreover, numerous scholars and leading
media outlets in Seoul urged the government that the time has come for Korea to
immediately reduce its economic reliance on China by strengthening the supply chain
cooperation with ASEAN and India. The primary logic behind this argument is that the
economic autonomy of Korea could be maintained only if Korea’s economy is less
dependent on China in the post-pandemic era [Interviews in Seoul, November 2020;
for media outlets, see Yonhap News Agency (2020), Maeil Business (2020), and
ChosunBiz (2021)]. In this regard, the government also started various initiatives. It
tightened the cooperation with ASEAN (especially Vietnam) to diversify the supply
chain and avoided over-reliance on a single source, notably China (Thuy, 2020).
Korean companies’ business strategy is also transforming as many leading firms are
shifting their focus from China to Southeast Asia. Hence, it is not just a coincidence
10An essential characteristic of the East Asian developmental state model is a robust state-business alliance
for achieving national interest. On this point, see Johnson (1982) and Amsden (1989) and Wade (1990).
Table 2.
Korean Chaebols’ Strategy to Reduce Reliance on China Amid COVID-19
Company Strategy
Samsung – Samsung closed its China-based last computer plant and only TV factory in 2020
– Lee Jae-yong visited Vietnam in October 2020 to enhance investment
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– Samsung shifted its display manufacturing unit from China to India in 2021
Hyundai – Hyundai sold its China’s No. 1 plant site in Beijing in May 2021
– Hyundai announced to build its Southeast Asia’s biggest plant in Indonesia in
March 2021
– Hyundai and LG Energy announced to build EV battery factory in Indonesia in July
2021
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that several Korean companies started to reduce or even close their manufacturing
facilities in China and enhanced their footprint in Southeast Asia amid the COVID-19
crisis (see Table 2).
In addition to this, Seoul is also strengthening its ties with the main security
partners, focusing on strengthening the supply chain. Take the new dynamics in
Seoul–Washington ties as an example. When the first summit between Korean Pres-
ident Moon and US President Biden was held in May 2021 at the White House, the
joint statement stressed that both countries have decided to work together to build a
stable supply chain for core industries, like semiconductors and electric vehicle bat-
teries (The White House, 2021). The statement’s inclusion of supply chain-related
issues is widely interpreted in Seoul as the beginning of a new chapter in Korea–US
relationships (Interviews in Seoul, August 2021). Moreover, the outcome of President
Moon’s US visit was also tangible. During his visit, leading Korean giants announced
their plans to invest $38.4 billion in the US in key areas, including semiconductors and
electric vehicles, to strengthen both countries’ global supply chain (Yonhap News
Agency, 2021). Indeed, this is a significant development given that while the US had
earlier urged Korea to support its effort to make a “China-less global supply chain,”
Beijing wanted Seoul to be a strong pillar of the existing China-led supply chain.
Hence, Korea’s decision to foster its ties with the US concerning supply chain is a
clear manifestation of Korea’s tilting toward the US vis-a-vis China regarding the
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During COVID-19
India and Korea have entered a new phase in their relationship with the launch of
NSP by the Moon administration in 2017.11 For the first time, China-related geopo-
litical and geo-economic factors have played a key role in transforming India–Korea
investment ties. Since the beginning of China’s economic retaliation against Korea in
2017, existing Korean conglomerates in India, such as Samsung, LG, and Hyundai,
have undertaken expansion activities, and several new Korean giants, such as Kia and
Lotte, have entered India (Kumar, 2018). In addition, between 2017 and 2019, more
than 360 Korean SMEs established businesses in India, thanks to the Korean gov-
ernment’s active support through the NSP.
Significant development concerning supply chain cooperation has occurred be-
tween the two countries amid the COVID-19 pandemic too. This can be understood in
a number of ways. First, the pandemic crisis provided an opportunity to open a high-
level political exchange between the two countries concerning the supply chain. To
illustrate, in October 2020, PM Modi and President Moon had telephonic conversa-
tions to review significant global developments, including “diversification of global
supply chain” (MEA, 2020d). Since both countries use the “diversification of supply
chain” rhetoric to counter the China challenge, the appearance of this rhetoric in the
Modi-Moon conversation is a significant development with regard to bilateral coop-
eration on the supply chain.
Apart from the political exchange, the cooperation between New Delhi and Seoul
regarding the supply chain deepened when the former welcomed leading Korean
companies to participate in the PLI schemes designed to reshape the supply chain
away from China. For example, in October 2020, when the Modi administration
11For the origins and evolution of India–Korea relations since World War II, see Kumar (2015a).
announced the names of domestic and global companies — who were found eligible
for the PLI scheme in electronic manufacturing — the Korean company Samsung was
listed among them. On the other hand, Chinese companies’ applications were rejected
because none of the Chinese electronic manufacturers figured in the Indian govern-
ment’s list. The Indian government took this decision although the Chinese smart-
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phone makers together controlled around 75% of India’s total smartphone market in
2020 and have much capital to invest in the PLI scheme. Accordingly, this move of
India underscores the fact that New Delhi ought to establish a “China-less supply
chain” in electronic manufacturing with the help of companies from friendly countries
like Korea.
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“The Indian government announced plans to provide huge incentives to automakers and
suppliers over the next five years to boost investment in the electric vehicle market. This is to
attract global manufacturers from competitors such as China to India and make India a major
supply base for electric vehicle markets. . . Korean companies need to consider the possibility
of local manufacturing of electric vehicle batteries in India.” (KOTRA, 2020)
develop India as a hub for vehicle parts and reportedly asked its vendors to shift their
supply chain’s center of gravity from China to India (Sporbiz, 2021). This move is part
of Hyundai Motor’s broader plan to reduce its over-reliance on China.12 What is more,
during the pandemic, two critical developments took place regarding Hyundai’s
growing engagement with India: First, in May 2020, Hyundai became the first car-
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maker to export three million cars from India; and second, in December 2020, India
replaced China as the biggest overseas market for Hyundai Motor (ChosunBiz, 2020).
Table 3.
Deepening India-Korea Investment Ties Amid COVID-19
October 2020 PM Modi and President Moon discussed to review the “ongoing diversification
of international value chain”
October 2020 Samsung was listed in the PLI schemes in mobile manufacturing, while the
Chinese smartphone makers were excluded
October 2020 LG Chemical was invited to participate in the PLI scheme in EV battery industry
December 2020 Samsung announced to invest around $654 million to shift its mobile display
factory in China to India
January 2021 Hyundai asked its vendors to shift their supply chain’s center of gravity from
China to India
February 2021 Hyundai announced to localize low-end EV battery in India
May 2021 KIA Motors announced to invest $54 million in an expansion project at its
manufacturing facility in Andhra Pradesh
May 2021 India included Samsung in 5G trials and excluded Chinese companies, Huawei
and ZTE, from participating
June 2021 Samsung completed the construction of the display manufacturing unit that is
shifted from China to India (Noida)
August 2021 After Samsung and LG, two new Korean electronic companies bought land to
set up plants in Noida with investments worth $60 million
2020–2021 Totally, 90 new Korean SMEs entered India amid COVID-19
Source: Author’s research.
12As mentioned above, many Korean chaebols have recently sought to reduce their presence in China. In
the process, Hyundai Motor has also followed suit by reducing its footprint in China while expanding its
presence in the Indian and ASEAN markets.
Samsung and other Korean electronic companies’ inclination toward India vis-
a-vis China is also an important development in India–Korea economic ties during
the COVID-19 crisis. In December 2020, Samsung announced to invest around
$654 million to shift its mobile display factory in China to Noida, India, and com-
pleted the construction of the factory in June 2021. Moreover, in August 2021, after
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Samsung and LG, two new Korean electronic companies bought land to set up plants
in Noida with investments worth $60 million.
Apart from conglomerates, Korean SMEs have also enhanced their presence in
India during the pandemic. According to the Korean government data, 90 new Korean
SMEs entered India from January 2020 to August 2021. Taking all together, it can be
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said that India–Korea economic ties deepened amid the COVID-19 crisis as Korean
firms have become an important partner in India’s effort to become a hub of the global
supply chain in critical industries (see Table 3).
So far, we have seen that the COVID-19 crisis has accelerated the ongoing
process of restructuring the supply chain, stemmed mainly from the geopolitical and
geo-economic dynamics among the major powers and China-related economic and
political risks. Major regional powers, including the US and Japan, strive to reshape
the supply chain beyond China. India and Korea are also redesigning their strategies
amid COVID-19, and in the process, these two major economies of Asia have
deepened their investment ties. How vital are two countries to each other in the post-
COVID-19 era, especially with regard to the supply chain?
For India, which seeks to put a check on the Chinese dominance in global supply
chain and make India a supply chain hub in key strategic areas, Korea could be a
crucial partner. Indeed, Korean companies’ leading position and leverage in key
strategic industries, such as semiconductors and electric vehicle batteries, could help
New Delhi to realize its grand ambition to build an India-centric supply chain. Also,
there is a great synergy between Korea’s Green New Deal policy, launched by the
Moon administration in 2020, and India’s quest to become a clean energy economy in
the post-COVID-19 era. Moreover, Korean government’s quest to build strong eco-
nomic relations with India under its NSP and Korean companies’ growing presence in
India are another important indicator that Korea is a vital partner for India concerning
supply chain in the post-pandemic era. Furthermore, from the geo-economic
perspective, Korea could be India’s natural partner in shaping the supply chain dy-
namics in East Asia as Korea has sought to deepen its ties with the US, a Quad
member, to stabilize the supply chain. Above all, the fact that Korea aims to diversify
its firms’ supply chain beyond China makes it a natural partner for India that also seeks
to end China’s control on the supply chain.
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For Korea, which has embarked on a strategy to reduce its economic reliance on
China, India can be a crucial partner to realize this goal. India’s economic potential,
market power, and quest to build an India-centric supply chain can provide enormous
opportunities for Korean companies to grow and diversify their supply chain. In
addition, New Delhi’s warm welcome for Korean companies to participate in various
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PLI schemes underscores that India is eager to take its relationships with Korea to the
next level. Above all, the absence of historical and geopolitical tensions between
Asia’s two major economies, India and Korea, provides another opportunity for Seoul
to build a robust, long-term supply chain cooperation with New Delhi. As Korea’s
former Trade Minister Kim Hyun-jong rightly pointed out amid his country’s growing
economic and political tensions with China, Seoul should deepen economic ties
with India because “unlike other Asian major powers, India is a country that has no
sensitive issues with Korea historically or geopolitically, so has little risk of its eco-
nomic cooperation” (Yonhap News Agency, 2018). In sum, India and Korea
are “natural partners” in reshaping the supply chain dynamics in East Asia in the
post-COVID-19 era.
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