Context :

• During the visit of South Korean President Lee Jae-myung to India (April 2026), India and South Korea set an ambitious target to increase bilateral trade to $50–54 billion by 2030.

Key Points :

• On 20 April 2026, in New Delhi, Prime Minister Narendra Modi and President Lee Jae-myung prepared a roadmap for a “Futuristic Partnership” to achieve this target.
• Current Trade: Bilateral trade during FY 2022–2025 stood at around $27.8 billion.
• New Target: To accelerate trade and reach $50 billion (some reports say $54 billion) by 2030.
• Growth Rate: Achieving this target requires an approximate 18% annual growth rate.
• Technology: Cooperation in AI, semiconductors, and launch of the India–Korea Digital Bridge.
• Manufacturing: Focus on shipbuilding, steel, and supply chains of critical minerals.
• Defence: Signing of more than 20 agreements to strengthen defence production and security cooperation.
• Energy: South Korea joining the International Solar Alliance and increasing investment in green energy.
• CEPA Upgrade: Decision to upgrade the 2010 Comprehensive Economic Partnership Agreement (CEPA) within the next year to reduce trade imbalance.
• Korean Industrial Townships: Plan to establish special townships in India to facilitate entry of Korean MSMEs.
• Financial Platform: Formation of an India–Korea Financial Platform to boost investment flows.

Key Challenges :

• Rising Trade Deficit: India faces a significant trade deficit with South Korea. In FY 2024–25, out of total trade of $27 billion, India’s exports were only $5.8 billion, while imports were about $21 billion.
• Export Structure: India mainly exports raw materials (like naphtha, aluminium, iron ore), whereas it imports high-value finished goods (semiconductors, machinery) from Korea.
• Technology Transfer: Hesitation by Korean firms in full technology transfer in defence and advanced manufacturing sectors remains a challenge.

South Korea (Republic of Korea) :

• South Korea is a developed democratic country located in East Asia, covering the southern part of the Korean Peninsula.
• Official Name: Republic of Korea (ROK)
• Capital: Seoul, one of the largest metropolitan areas in the world.
• Official Language: Korean (written in Hangul script)
• Currency: South Korean Won (KRW)
• Boundaries: Borders North Korea in the north (separated by the DMZ), Yellow Sea to the west, and the Sea of Japan (East Sea) to the east.
• Topography: About 70% of the country is mountainous; Hallasan is the highest peak, located on Jeju Island.
• Major Cities: Apart from Seoul, Busan, Incheon, Daegu, and Gwangju are major urban centers.