India and South Korea have reaffirmed their commitment to expand bilateral trade to $50 billion by 2030, a target originally set in 2018. This announcement was made during a joint press statement by Indian Prime Minister Narendra Modi and South Korean President Lee Jae Myung, who is the first South Korean president to visit India in eight years. Both leaders emphasized the importance of moving from a 'trusted partnership' to a 'futuristic' collaboration, covering sectors such as chips, ships, talent, technology, environment, and energy [1].
Despite these ambitious goals, trade between the two countries has grown at a compounded annual rate of just 3% from 2018 to 2025, reaching $26.89 billion in the financial year ending March 2025. This figure is just over half of the 2030 target, according to data from the Indian commerce ministry [1]. Experts, including Ashok Malik from The Asia Group, highlighted the 'tremendous unrealized potential' and noted that both countries are seeking to diversify away from the U.S. market and reduce reliance on China, particularly in sectors such as EVs, electronics, semiconductors, AI, shipbuilding, and automotive steel [1].
However, Korean companies investing in India face significant practical challenges, including regulatory delays, policy unpredictability, land acquisition issues, infrastructure delays, and regulatory complexity. Reema Bhattacharya of Verisk Maplecroft pointed out that these operational challenges remain major deterrents for Korean investors [1]. For example, Korean steel giant POSCO's $12 billion investment project in India was dropped a few years ago due to land acquisition difficulties. In 2024, POSCO renewed its investment plans by partnering with India's JSW Steel to set up a steel plant with a capacity of 6 million tons per annum. After two years of planning, the project has now secured land and is set to become operational [1].
The reaffirmation of trade targets and renewed investment plans signal optimism for future growth, but the slow pace of trade expansion and persistent regulatory hurdles suggest that achieving the $50 billion target will require significant policy reforms and operational improvements [1].
CONCLUSION
India and South Korea's renewed commitment to expand trade and investment highlights strong intentions for deeper economic ties. However, regulatory and operational challenges continue to hinder progress, making the achievement of the $50 billion trade target by 2030 uncertain. Market participants may view the developments with cautious optimism, pending further reforms.