On Monday, Narendra Modi, the prime minister of India, went to South Korea for a two-day visit with its president, Park Geun-hye. On that day, the duo signed seven agreements dealing with various economic issues, discussed investments and political issues, and improved their bilateral relations. The two countries have vastly improved their relationship, elevating their relationship to a "Special Strategic Partnership". By improving both political and economic ties between the countries and opening up special business deals, Modi's visit is one that could prove vastly beneficial to both countries and potentially the global economy.
One of the several reasons for the visit was to encourage investment in India from South Korea's biggest firms. In September of last year, Modi launched a "Make in India" initiative designed to encourage foreign businesses to make their products in India and strengthen the country's manufacturing sector. Other Asian countries such as China and Japan have invested and produced in India, but South Korea has not done much so far. As a result, talks have been arranged between Modi and companies such as Hyundai Motor Company and Hyundai Heavy industries, both of which are based in South Korea but have plants in India. Other companies, including Samsung and LG, are also scheduled to talk with Modi.
India and South Korea are also signing agreements for strengthening economic and business ties. South Korea is investing $10 billion (in US dollars) in India to improve India's infrastructure and transportation. $1 billion is set aside for an Economic Development Cooperation Fund, and $9 billion will be used in India for the improvement of infrastructure and transportation, the development of smart cities, and generation of electric power. Other agreements include a Memorandum of Understanding, with provisions like an avoidance of double taxation and a prevention of fiscal evasion. The countries also enabled cooperation between their National Security Councils, signed an India-South Korea Comprehensive Economic Partnership agreement, formed an India-South Korea Comprehensive Economic Partnership Agreement, and formalized relations between their economic ministries.
India is one of the major developing global powers, and these deals with South Korea could prove extremely beneficial to its economy. If India improves its manufacturing sector and strengthens its dealings with global business conglomerates, it can prove an attractive place for business investment. South Korea has much to gain from strengthening its ties with India, which could prove as an example to other nations looking for further business deals in Asia. As both countries strengthen their bonds to help their economies, many other major nations will be watching and may also follow suit.