India and Japan have been quietly building one of Asia’s more consequential partnerships. Prime ministerial summits happen annually. Defence ties are deepening. Infrastructure cooperation spans bullet trains to semiconductor supply chains. South Korea has watched this with interest — and some urgency. Japan and South Korea share deep historical disputes, and the two economies compete directly in semiconductors, automobiles, and electronics. Seoul cannot use Tokyo as a bridge into New Delhi. It has to build that relationship itself. That is part of what brought President Lee Jae-myung to India for his first state visit since taking office — the first South Korean state visit to India in eight years — and part of what the visit needs to be judged against.
The timing of the visit added its own urgency. The blockade of the Strait of Hormuz, through which nearly 90 per cent of South Korea’s energy passes, triggered an immediate crisis — markets fell, and energy shortages rattled both government and public confidence. With no quick resolution in sight, Seoul needed to send a signal to its own people that it was securing alternative economic relationships. India, with its enormous market and an emerging economy, was the most credible option. The fact that over 600 South Korean companies already operate in India, according to the Embassy of India in Seoul, only strengthens the case.
Despite a Comprehensive Economic Partnership Agreement signed in 2010, the relationship has never quite realised its potential. Part of the reason is straightforward geography and economics — Vietnam offers South Korean businesses a closer, more familiar operating environment with a stronger ease-of-doing-business record, where factory approvals that take weeks in Vietnam can take months in India. But the deeper problem is structural. Land acquisition remains one of India’s most intractable investment challenges. POSCO’s experience is instructive — the South Korean steel giant spent twelve years trying to establish a $12 billion plant in Odisha before finally withdrawing in 2017, caught in the complexity of acquiring land in a country where the vast majority of the population still lives in rural areas and where land carries deep cultural, livelihood, and environmental significance. India’s infrastructure gap — in roads, ports, and industrial logistics — remains a significant deterrent, particularly when compared to the seamless connectivity that Vietnam and China offer to foreign manufacturers. That is not a problem that a trade agreement can resolve.
What makes this moment different from previous visits is India’s own trajectory. South Korea, like many export-oriented economies, is increasingly drawn to the scale of the Indian market — not as a future possibility but as a present reality. India is now the world’s fourth-largest economy, having overtaken Japan in 2025 according to IMF projections, and is expected to climb to third by 2028. What gives India an edge over its competitors is democratic stability. Vietnam, despite its manufacturing appeal, has seen unprecedented political turmoil since 2024, with four top leaders removed in quick succession, according to Chatham House. China, meanwhile, is precisely the dependency South Korea is trying to reduce. India, as the world’s largest democracy with a consistent record of peaceful transfers of power, offers something neither can predict — long-term predictability.
One area where this partnership could deliver something concrete is semiconductors. India’s ambition is clear — to move from being a consumer of chips to a producer, backed by the India Semiconductor Mission’s outlay of ₹76,000 crore. South Korea is the world’s leading chip producer, with Samsung and SK Hynix together accounting for over 60 per cent of the global memory semiconductor market — an edge that Japanese firms, whose strength lies in semiconductor materials and machinery rather than production, cannot match. Japan is already moving into India — Renesas Electronics has set up a facility in Gujarat, and Tokyo Electron has partnered with Tata Electronics, with Japanese semiconductor investments in India nearly tripling between 2020 and 2024. For South Korea, the risk is straightforward. If Japan anchors India’s semiconductor supply chain first, South Korea may find itself locked out of the world’s fastest-growing major semiconductor market in the sector it dominates globally.
The trade deficit between the two countries remains a stubborn problem — and the reasons are structural rather than incidental. India is still a largely agricultural economy with an industrial base that is growing but not yet globally competitive across most sectors. South Korea, by contrast, exports semiconductors, automobiles, and household appliances in large volumes. Despite the CEPA being in place since 2010, bilateral trade grew at a compounded annual rate of just 3 per cent from 2018 to 2025, reaching $26.89 billion in the financial year ending March 2025, according to India’s Ministry of Commerce — barely half the $50 billion target both sides keep reaffirming. India’s trade deficit with South Korea widened to $15.19 billion in 2024–25, up from $8 billion in 2020–21. A renegotiation that puts India’s strengths on the table — services and pharmaceuticals, where Indian firms are genuinely competitive globally — would be a more honest starting point than simply renewing targets that have not been met.
President Lee, during the visit, described India and South Korea as “the most ideal partners for comprehensive cooperation” in “an era of hyper uncertainty.” That is the right framing. Whether it produces something lasting will be visible in the years ahead — not in the language of joint statements, but in three measurable outcomes: whether South Korean investment in India grows beyond its current modest levels, whether the trade deficit begins to narrow through a renegotiated CEPA that genuinely opens Korean markets to Indian services and pharmaceuticals, and whether Indian companies find the same welcome in Seoul that Samsung and Hyundai have found in India. If those three things move, this visit will have mattered. If they do not, it will join a long list of well-photographed moments that changed very little.
Dr Anupam Shukla has a PhD in East Asian Studies from Jawaharlal Nehru University, New Delhi, with a research focus on foreign policy, economic diplomacy, and global governance.
AloJapan.com