Korean firms should set up manufacturing & R&D bases in India: Amitabh Kant

Amitabh Kant, secretary, Department of Industrial Policy & Promotion, (DIPP), Ministry of Commerce and Industry, has urged Korean companies to look ahead of the curve, invest and set up manufacturing and R&D bases in India as this country quicken its strides to touch double-digit growth rate in three to four years.
 
Speaking at a business meeting here today on ‘Make in India: Contribution of Korean companies’, organised by FICCI, Korea International Trade Association (KITA) and Korean Chamber of Commerce India (Kocham India), Kant said, “The future for Korean companies is not in Korea. It is in India both for manufacturing for the domestic market and for export.” Korean companies, he added, would do well to drop anchor in India now as three to four years from now the growing Indian economy would have attracted large and small companies from across the developed world and it would be too late to scout for manufacturing opportunities then.
 
Kant said that India would like to see small and medium Korean companies set up manufacturing bases in this country and “we can create ‘plug and play’ facilities for them."
 
Dr Jyotsna Suri, president, FICCI and chairperson & managing director, Bharat Hotels Ltd, pointed out that Korea was one of the first countries to realise the potential of India as a manufacturing destination. Korean investment in India is concentrated mainly in the manufacturing sector which accounts for 86%, with wholesale and retail trade 6%, construction 1.2% and financial and insurance activities 1.3%.
 
The Korean companies’ faith in the India growth story is clearly reflected in the choice of India as a launch pad for Korean global automotive offerings, including an export hub for Hyundai Motors which has been exporting a significant chunk of its ‘Made in India’ vehicles.
 
According to Korean Exim Bank, Korean companies have invested more than $ 3.5 billion in India till December 2014 and 641 Korean companies have invested in India. However, compared Korea's worldwide investment, which is estimated to be about $270 billion, investments by Korean companies in India is miniscule. “There is a scope to invest a lot more in India. We look forward to more Korean investments in Delhi Mumbai Industrial Corridor, National Industrial Manufacturing Zones and Smart Cities as well as in areas other than manufacturing such as IT and services,” said Suri.
 
She Bo Shin, managing director & CEO, Hyundai Motor & chairman, Kocham India, said that this was the most opportune time for Korean companies to expand their manufacturing and export capacity and identified automobiles, shipbuilding, electronics, IT, defence production, infrastructure and energy as the potential for investment in India.
 
Jehak Jang, minister counsellor (economic), Embassy of the People’s Republic of Korea in India, said, “India was going through a paradigm shift in economic policy making, adding that Prime Minister Modi had unleashed a wave of optimism on investment prospects in India.” Korea, he said, was going to set up an industrial park in Rajasthan and added that his country could be a valuable partner of India, powered by skill, scale and speed. Given a conducive environment, Korean companies would shift their operations to India, he added.