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The Association of Southeast Asian Nations (ASEAN) under a Pan-Asian framework has figured highly in South Korea’s foreign policy over the last decade. The New Asia Initiative (NAI) in 2009 witnessed South Korea factoring ASEAN in its regional diplomacy, moving away from its excessive focus on Northeast Asia. Unlike ASEAN, India was never accorded a major place in South Korea’s regional diplomacy even though Seoul offered special importance to India at a bilateral level. The New Southern Policy (NSP) introduced by Moon Jae-in in the year 2017 marked a change, factoring India for the first time in Seoul’s regional diplomacy along with ASEAN. A policy to connect ASEAN and India under one framework was designed to promote a regional mode of contact to augment Seoul’s economic diplomacy. As a prime national developmental strategy of Moon Jae-in,¹ the NSP was expected to explore new economic engagement through a regional policy framework, joining ASEAN and India together.

The NSP accorded higher importance to the relationship with ASEAN and India for Seoul, reaching beyond major traditional economic partners like the US, China, Japan, and Russia.² However, this Pan-Asian basis of establishing a regional mode of contact under the NSP is being tested by the newly emerging regional dynamics. India’s withdrawal from the final negotiating mechanism of Regional Comprehensive Economic Partnership (RCEP); the newly emerging balance of states in the Indo-Pacific; and a lack of pragmatic convergence between India’s Act East Policy (AEP) and Seoul’s NSP are critical elements that impact Seoul’s regional diplomacy.

The RCEP conundrum

Once considered the backbone of India-South Korea regional partnership, RCEP seems to have now emerged more as a strategic conundrum between the two countries, especially with India’s decision to not join the final negotiations of this regional free-trade mechanism. The entire premise of the India-South Korea regional partnership was based on the ASEAN framework of forging a regional free-trade environment that would be promoted both within and outside the purview of RCEP. The plan was to draw out the strategic convergence that India’s AEP and Seoul’s NSP offered to each other regionally and bilaterally.

Nevertheless, intense domestic pressure and lack of concrete assurances about market access and non-tariff barriers for India did not allow New Delhi to sign RCEP, leading Prime Minister Narendra Modi to state that his “conscience”³ was against the deal. The move, while not unexpected, was a serious setback to most economies in the region, especially those of Japan and South Korea. Japan has managed to build a robust partnership with India over the last decade while South Korea’s focus on India had only increased after Moon Jae-in’s ascent to power in 2017, particularly after his 2018 India visit. For Seoul, the Indian decision to not join RCEP is especially unfavorable as its relationship with India was only recently improving under the NSP. Thus, despite the theoretical synchronization in India’s AEP and South Korea’s NSP, the two countries were not able to sway each other in matters pertaining to RCEP, highlighting the gap that exists in their special strategic partnership.

With a market of over 1.3 billion people with steadily increasing incomes, India aspires to emerge as a 5 trillion-dollar economy by 2025, driven mainly by the demand of its consumers.⁴ A market with these characteristics coupled with low domestic competition was the main attraction of the Indian presence in RCEP, especially for many of India’s strategic partners. Understanding such dynamics, New Delhi has been firm since the beginning in not embracing RCEP negotiations openly in order to safeguard its national security interests. Strategic partners of India such as South Korea, China, Japan, Australia and a majority of the ASEAN countries have rejected India’s negotiating demands, keeping in mind that acceptance of India’s conditions would not provide them the necessary market access that these economies are seeking. For instance, India’s request for a strict rules of origin clause has been opposed by the majority of economies, among them China, Australia, Japan, South Korea, and ASEAN.⁵

One of the major reasons behind India’s aversion to RCEP has been the huge trade deficit that it has with ASEAN members and its dialogue partners including South Korea. The trade contacts between India and South Korea are not very impressive, but still India has a deficit of $11.9 billion.⁶ Though a purposive economic partnership could have been furthered between India and South Korea via the RCEP framework, to what extent it would have strengthened the India-South Korea regional partnership remains unclear given India’s rising trade deficits. The more challenging aspect is how India and South Korea will meet their envisioned target of attaining $ 50 billion in trade by 2030,⁷ when India has decided not to be a part of the value-chain networks that the RCEP promises to promote. At the same time, it is important to note that the Comprehensive Economic Partnership Agreement (CEPA) and “special strategic partnership” have contributed little in advancing a robust economic engagement, both bilaterally and regionally, between India and South Korea.

For Seoul, finding strategic convergence with New Delhi regionally in the post-RCEP period or free-trade environment will come as a challenge. In contrast, New Delhi has strategic synergy with Tokyo regionally since both India and Japan embrace the “Indo-Pacific” as a diplomatic framework to advance their national interests. The India-Japan engagement in Southeast Asia is on an upward trajectory. Connectivity, infrastructure development, and developmental cooperation are becoming the key themes of India-Japan partnership. Japan has even expressed an interest in re-examining the RCEP negotiation mechanism in light of India’s interests. Such interest in reviewing India’s position on RCEP and promoting a partnership with India as a regional partner within the “Indo-Pacific” framework is not visible on Seoul’s part. Seoul understands that India’s presence in the final RCEP mechanism would have come with stronger rules of origin clauses, stricter transparency laws in trade, and higher tariffs. Such RCEP mechanisms would have affected Seoul’s ambitions of widening its trade footprint in Southeast Asia. Besides, Seoul has remained guarded over embracing the “Indo-Pacific” initiative overtly, concerned about arousing a backlash to its national interests in a tightly contested regional theatre.

RCEP, for South Korea, is vital for two main reasons: an opportunity to easily access promising, fast-paced, and ever-growing markets of Southeast Asia; and the possibility of a future where a Japan-China-South Korea trade or commercial bloc may exist. South Korea retains its economic balance by using Japanese technology and Chinese labor as well as markets in order to export goods to Europe and the United States. A successful conclusion of RCEP is as much of a priority for South Korea as it is for Japan and China. South Korea’s fortune as an export-driven, trading economy is deeply attached to RCEP’s conclusion. Hence, it has been in favor of RCEP being concluded without India, as has been acutely evident at the recently concluded 12th Economic and Trade Minister’s meeting held in Beijing.⁸

Further, it is important to note that India’s AEP and South Korea’s NSP, despite being synergistic, do not offer sufficient practical policy convergence for both to be likely to promote fortifying the India-South Korea regional partnership. The India-South Korea RCEP conundrum relates to this. For India, joining RCEP was not going to lead to a favorable outcome, particularly when trade deficits, economic instability, and domestic political turmoil stand in the way. India visualized that RCEP could have adversely affected its small-scale businesses and agricultural sector. In contrast, for South Korea, RCEP is paving the way for Korean entry into markets into which it otherwise did not have easy access. Further, it gives Seoul an opportunity to try and readjust its ties with both China and Japan. Under such changing regional dynamics, it is difficult to foresee the implementation of a successful NSP.

India’s weight in South Korea’s regional power-play

Most powers in Asia, including South Korea, are heavily affected by the changing balance of power dynamics in the Indo-Pacific, which is overwhelmed by the undercurrents of conflict and cooperation—the two extreme ends of geopolitics. In such circumstances, the success of the NSP is deeply dependent on how Seoul manages to deal with key relationship equations vis-à-vis stakeholders in the region. The ongoing US-China rivalry, Seoul’s turbulent relations with Tokyo, and India’s special attention to Japan and China ahead of South Korea (which is especially hard for Seoul because India is a focus of the NSP) are examples.

Not featured at the center of India’s “Look East” policy, bilateral relations with both Japan and South Korea started prospering after the development of the CEPA with South Korea in 2010 and the boost with Japan in 2011. The bilateral relationship thereafter witnessed an upward trajectory with New Delhi and Seoul signing a “strategic partnership,” which focused on enhanced political and security cooperation between the two countries.⁹ Likewise, India and Japan have engaged in a ‘Special Strategic and Global Partnership’ with a Vision 2025, mutually envisaging the ‘free, open and prosperous’ region of the Indo-Pacific.¹⁰ Specifically, India and Japan envision a shared view with respect to the Indo-Pacific, acknowledging the imperative to work together to achieve a rule-based and inclusive regional order, which assures trust and quality by focusing on communications and connectivity. The foreign policy of both countries likewise endeavors to work for unhindered trade, people-to-people contacts, bolstered technology, the rule of law, and the peace and prosperity of the region.

To advance such a purposive partnership, the India-Japan partnership has been continuously working towards upholding quality infrastructure and connectivity to fill in the infrastructure gaps in the region, which is strengthening their bilateral as well as regional relationship. Also, advocating openness and inclusivity, India and Japan support international standards of transparency, condemning unjust debt practices and opaque policies. Thus, Japan in the purview of the current developments has emerged as a significant developmental partner for India domestically, and mainly in Northeast India, which reaffirms the ethos of India-Japan relations. Synergising the AEP and Japan’s Expanded Partnership for Quality Infrastructure (EPQI), New Delhi and Tokyo have invested into the development of Northeast India through infrastructural and connectivity projects. South Korea’s NSP has to overcome and replicate such a robust India-Japan chemistry if it is to succeed. 

Seoul’s NSP has given importance to creating a stronger strategic synergy with India in Southeast Asia without really factoring in Northeast India. Nevertheless, the NSP is the first ever officially documented policy release by South Korea with a clear focus on India.¹¹ With Narendra Modi’s AEP becoming India’s central foreign policy approach, the scope for South Korea to fulfil its regional strategic ambitions factoring in India has widened. New Delhi is a vital economic partner to Seoul as well as a needed strategic substitute in order to enhance its presence beyond Northeast Asia.¹² Bolstered defense and economic ties with India would offer South Korea a much-needed respite from its overdependence on the two major powers, the US and China.

A way forward?

India’s AEP and South Korea’s NSP both aim at furthering their country’s relations with Asian partners in order to strengthen their regional power. The two policies converge in their geographic outreach across Asia and in their subtle goal of slowing Chinese outreach in the region. China is economically crucial for both India and South Korea; hence, both do not seek to follow an antagonistic approach towards Beijing. ASEAN is at the center of India’s AEP and Seoul’s NSP.¹³ In terms of economic growth, Korea in the past four decades has transformed its economy into an export powerhouse; in 2018, India was its 7th biggest export market.¹⁴ Bilateral trade between the two reached $21.5 billion in 2018, and Korean investments in India crossed the $1 billion mark in 2018.¹⁵ Indian investment into Korea is approximately $3 billion and primarily led by companies like Novelis, Ssangyong and Tata Daewoo.¹⁶ While India and South Korea followed different economic models after their independence, their economic goals today have considerable convergence.

However, it is in the realm of defense relations that South Korea and India possess immense potential for each other. India is looking to move away from its traditional defense partners like Russia and the US and expand the sources of its defense equipment imports. At the same time, South Korean defense industries are looking for investment and cooperation possibilities beyond traditional borders in order to raise Seoul’s defense standing in the regional order. This potential in the defense sector between the two countries has been tapped into by the Indian Army’s introduction of the self-propelling howitzer, K-9 Vajra.¹⁷ The K-9 Vajra is a version of South Korean K-9 Thunder and was produced by Korea’s Samsung-Techwin and India’s Larsen and Tourbo after signing an agreement in 2017.¹⁸ In 2019, India signed a naval logistics agreement with South Korea;¹⁹ this is significant as India had such arrangements with only France and the US.²⁰ Indian-South Korean defense synergy has been viewed with apprehension by Chinese state-run media outlets, which have published articles raising eyebrows over the growing defense partnership between New Delhi and Seoul.²¹ While growth in South Korea and India relations has been significant, there is much to be achieved in the strategic defense sector. For India, maneuvering through South Korea’s closeness to China and Seoul’s tumultuous relations with Tokyo (an important strategic partner of India) will prove to be challenging.

In brief, India is key to South Korea’s NSP and its regional diplomacy. While the NSP offers an impression of being an unofficial Indo-Pacific policy of South Korea, it lacks the real strategy and vision to deal with the regional balance of power equations. For instance, ASEAN and India’s closer economic ties with both China and Japan can pose a challenge to Seoul’s strategic objectives of having a vibrant economic engagement strategy if the NSP fails to overcome the prospects that these relationships offer regionally. Unless Seoul manages to decipher such dynamics and navigate through the same, the prospects of a successful NSP involving India and ASEAN will continue to remain a distant reality.

Conclusion

On the surface, India-South Korea relations appear promising with a possible convergence between Moon Jae-in’s NSP and Narendra Modi’s AEP. However, the NSP and the AEP are two different initiatives aimed at forging cooperation under shifting geopolitical circumstances. India’s withdrawal from the RCEP, to which Seoul remain unsympathetic unlike Tokyo, has arrived as an obstacle. This raises doubt for the prospects of improving bilateral trade between South Korea and India in the coming years. Perhaps more important, the absence of a shared regional strategy between India and South Korea, such as the “Indo-Pacific” initiative, comes as an additional barrier. Indeed, India-South Korea relations fall short of embracing the kind of regional character that India-Japan relations have been quick to adopt. The prospects of deepening India-South Korea relations under the NSP would heavily depend on the extent to which Seoul is willing to embrace to Indo-Pacific narrative that India’s AEP is currently pitching.

* These National Commentaries were prepared in collaboration with the East-West Center in Washington.