Shin Bongkil, South Korea’s Ambassador to India, says  cleaner air itself would attract more foreigners and investment to India.


New Delhi: Shin Bongkil, the South Korean Ambassador to India, has told The Sunday Guardian that while India’s business environment has improved under the Narendra Modi government, bureaucratic hurdles, air pollution and the quality of highways were some of the challenges that South Korean companies were facing while looking to invest in India.

Bongkil, a career diplomat who joined the service in 1978, also responded to why Korean companies were reluctant to shift their supply chains to India even as they were moving to Vietnam. Excerpts:

Q: You were appointed as the Ambassador to India in January 2018. It is now almost three years since you have been here. Based on what you have seen during this time period, how would you describe the business environment in the country?

A: I have witnessed the Modi government undertake structural reforms and streamline regulations to improve the business environment in India. As you know, India’s efforts have been well recognised by ranking 63rd in the World Bank’s 2020 Ease of Doing Business report. Still, India has a long way to go to create a favourable business environment. India should take further steps to improve its basic infrastructure such as roads and highways to guarantee better mobility and connectivity. It should also exert more efforts to do away with bureaucratic hurdles for businesses. Furthermore, the government should pay attention to improving fundamental living conditions, including air quality. I see terrible air pollution every winter in New Delhi. Cleaner air itself would attract more foreigners and investment to India.

Q. Due to Covid-19 and other geopolitical issues, many companies, including Korean ones, are shifting their supply lines from China to other countries, including India and Vietnam. India, going by the data, seems to be losing out to Vietnam when it comes to attracting these companies. What, in your view, are the challenges that are stopping these companies from preferring India to Vietnam?

A: The Covid-19 pandemic has exposed the risk of overdependence on a single country to feed the global supply chains. Consequently, companies are increasingly looking for an alternative manufacturing base. As an alternative, India has the natural advantage of a big market. I am aware that the Indian government is working hard to attract foreign companies exiting China by implementing measures such as the Production Linked Incentive (PLI) scheme. Korean companies who already have bases in India are very keen to benefit from these policies. However, I would say India is still more of a “new frontier” for Korean companies, compared to countries such as Vietnam, which Korean companies are more familiar with. For one thing, Vietnam is geographically closer to Korea than India, and has a robust Korean community with 7,000 Korean companies and 200,000 Korean people. This lowers the entry barrier for Korean companies, both conglomerates and SME, to enter Vietnam. Moreover, Vietnam has many favourable conditions for manufacturing industries, including qualified human resources at a low wage rate, good infrastructure, as well as well-developed industrial zones. Most importantly, companies favour countries that provide a solid administrative and legal framework for businesses. So, with regard to shifting supply chains, while India is one of many attractive destinations, Korean companies would also be inclined to shift to such countries that are more predictable.

Q: On 7 August, you held a meeting with other stakeholders on the investment conditions in India. What were the main findings of that meeting? Are representatives of the South Korean companies, who want to invest in India, facing red tape and bureaucratic hurdles?

A: Yes, I had a meeting with the stakeholders in our bilateral relations on ways to expand Korean investment in India. Our trade organisations KOTRA and KITA, and the Korea Plus desk set up under Invest India, participated in the meeting. We discussed the investment conditions in India under the Covid-19 pandemic. We also exchanged views on the shift in global supply chains from China towards other countries, recent trends in India-China economic relations and how that would affect Korean companies. The participants also shared ideas to increase Korean companies’ investment in India, including diversification of investment, increasing promotion, and the possibility of establishing a special economic zone for Korean companies. We discussed some bureaucratic difficulties Korean companies were facing, especially with regard to the Covid-19 pandemic. Some issues raised include difficulties in customs clearance, higher logistical fees, import restrictions, and the cancellation of regular international flights between Korea and India. We are closely coordinating with the Indian government and relevant organisations to deal with any difficulties our companies are having, and will continue to do so.

Q: India and South Korea share a strategic level of partnership and India is seeking more investments from Korea which is right now the fourth largest source of FDI in the country. What are the new opportunities that South Korean companies might be interested in apart from automobiles and mobile phones?

A: Korea and India share a special strategic partnership which provides ample scope for cooperation in a range of areas. Korean companies, including Samsung, LG, Hyundai and Kia, already have a huge presence in the automobile, mobile phone and electronic sectors in India. In the wake of the recent shifting of global supply chains, Korean companies can be an alternative investor in fields where India has been heavily reliant on China, including mechanics, infrastructure, food processing, etc. E-mobility, pharmaceutical and healthcare also can be new areas of cooperation. In particular, Korea and India can join more efforts in the field of innovative technology, including communications and IT. In December last year, the Korean delegation, including officials from the Ministry of Science and ICT, and leading communication companies such as SK Telecom, visited India to discuss ways to enhance 5G cooperation between the two countries. Our EXIM bank provided a 750 million dollars loan to Reliance Jio’s Infocom Network. Recently, the Korean company LS Cables established a 5G equipment factory in India. On the other hand, the Covid-19 pandemic opened up possibilities to enhance cooperation in the healthcare sector between the two countries. Korean companies are exporting and donating personal protective equipment (PPE) and face masks to India. The Korean company SD Biosensor has been supplying around 700 thousand rapid diagnostic kits per day in its manufacturing unit in Haryana.

Q: South Korea has deep ties with both China and the United States. In the present situation, when these two economic and military giants are engaged in a show of strength, where does South Korea see itself?

A: Korea has a close bilateral relationship with both the U.S. and China. Both countries are important partners to Korea in the field of economy and geopolitics. In this regard, Korea is not in a position to side with one single country; both the U.S. and China are of great importance to Korea. In changing times, it is necessary to harmonize various conflicting factors and maintain our balancing act.

Q: China’s attempt to extend its borders is something that has become a concern for every country that shares its border with it. South Korea, too, is engaged in a dispute with China over the ownership of Socotra rock in the Yellow Sea. Do you believe an economic, military grouping of these concerned countries is needed to collectively stand against China’s expansionism?

A: Korea always stands for building greater peace in the region and beyond. We do not want to see any type of conflict develop into military competition between divided blocs in the Indo-Pacific region. Against this backdrop, the Moon Jae-in government is promoting the New Southern Policy. The policy aims to strengthen our relationship with India as well as ASEAN countries, whereas previously Korea’s external policy had been heavily concentrated on four powers; US, China, Japan and Russia. Under the regional cooperation principles of international norms, openness, transparency, and inclusiveness, Korea will put forth harmonious cooperation between its New Southern Policy and other countries’ initiatives, in its contribution to regional stability and prosperity.

Q: Do you believe that India-South Korea ties are still not working at their optimum level and there is scope for much more, especially in defence?

A: As an Ambassador of Korea to India, I look at the level of our cooperation in a positive perspective. In the last couple of years, Korea-India relations have entered a new phase of genuine strategic partnership. High-level exchange of visits has become frequent. Trade and investment are blossoming and so are the people-to-people contact and cultural exchanges. Recently, the Indian government introduced Korean language as one of the foreign languages at the secondary level of school education in the New Education Policy-2020. This provides millions of school students in India an opportunity to learn the Korean language at a very young age. In 2018, the contents on Korean history, democracy and economic development were included in the NCERT textbooks for Classes X, XI and XII. Both these developments are shining examples of our bilateral cooperation. It is my view that the cooperation between Korea and India is just at its initial stage. Maybe we have only seen 30% of the full potential this relationship has. Our bilateral relationship can expand further from economic and trade to defence production, tourism, entertainment, and so on. We have much room for further development in all areas and we will continue to work together to realise the full potential of our  bilateral relations.