With the India-Korea FTA (they call it CEPA) now in force, it has not taken long for the Indian business community to form an association, to help improve economic relations between both sides.
The Indian Chamber of Commerce in Korea has been setup and was formally launched yesterday evening. It has the full backing of the Indian embassy and the launch event was actually organized by the Indian diplomats here in Korea. Although I hope the bureucrats do not interfer too much in its actual day to day activities...too much involvement by the Indian bureaucrats in any project has never been good.. A facilitating role is more than enough!
While the launch ceremony was slightly embarassing, with too many boring speeches, I am sure the ICCK will soon stand on its own feet. I am still not sure though that there are enough Indian companies here to join the chamber! It may eventually be filled up with 'individual members' who have an interest in India-Korea relations, more to use it as networking association like many of the other national chambers, and not the 'lobbying group' like Amcham and EUCCK, which have more clout with the Korean government officials.
As far as I know, while Korean investment in India is substantial (including the heavyweights Samsung, LG, Hyundai and POSCO among others), the revere is not true. There are only two major Indian Groups which have committed some investment here- Hindalco and Tata.
Novelis Inc., a subsidiary of Hindalco Industries Limited the flagship company of the Aditya Birla Group, acquired Alcan Taihan Aluminum Limited in January 2005. Novelis Inc. holds 68% of total capital investment of US$ 600 million of Novelis Korea Limited. Novelis Korea is Asia’s number one manufacturer of aluminum rolled products with state of art production facilities in Yeongju and Ulsan and employs more than 1,200 employees. Tata Motors Limited, India, also acquired the Daewoo Commercial Vehicle (DWCV), Gunsan, Korea for a total price of KRW 120 billion (approximately US$ 102 million or Rupees 4650 million) in March 2004.
In addition, an Indian Company, M/s Creative Plastic, invested US$ 2 million in ROK and set up a 100% investment company, Alchemy Mold & Plastic Ltd. in Pyeongtaek. These are the only worthwhile investments. Hope the record improves, now that the FTA has been implemented.
A related news item:
With the full backing of the Indan Embassy opened its doors yesterday, becoming the 14th organization of its kind here and joining the ranks of the American Chamber of Commerce in Korea and the European Union Chamber of Commerce in Korea.
“Over the past three years, trade between Korea and India increased 100 percent, and last year [trade] volume reached $15 billion,” Kim Jong-shik, chairman of the Indian chamber and chief executive of Tata Daewoo Commercial Vehicle Company, said during a gathering at a hotel in central Seoul to celebrate the opening. “Around 380 Korean companies are currently promoting business in India.
And Indian companies including the Tata Group and the Aditya Birla Group are actively and successfully investing in Korea.”
The closer ties between Korean and Indian businesses stem in part from a bilateral agreement the two signed last year to break down tariff barriers. The agreement, which encourages businesses in each country to invest more freely in the other nation, took effect this year.
“Specifically, Hyundai Motor built its plant near Chennai, and many other Korean companies continue to increase their investment in India,” Finance Minister Yoon Jeung-hyun said at the gathering.
“On the other hand, India’s Tata Group was successful in entering Korea and has been producing commercial vehicles for the Korean market.”
The minister added that “despite such a rapid increase in bilateral trade and investment, there are still large opportunities for cooperation and further growth.”