Korean Business Leaders Target Growth in India and Vietnam
Korean business leaders are seizing the opportunity presented by President Lee Jae Myung’s official visits to India and Vietnam this week to enhance their presence in the Global South. The delegation, which includes approximately 250 executives from major corporations such as Samsung Electronics, Hyundai Motor Group, and LG Group, gathered for a Korea-India business forum in New Delhi on Monday. This high-profile event underscores the urgency for Korean companies to diversify their supply chains and investment strategies amid escalating U.S.-China tensions.
President Lee’s trip, spanning from Sunday to Friday, aims to explore new avenues for growth in India and Vietnam. Both countries are increasingly viewed as viable alternatives to China for manufacturing, thanks to their large populations, rising consumption rates, and expanding industrial sectors. Executives accompanying the president are expected to announce various partnerships and investments during the trip, particularly in sectors such as steel, automotive, shipbuilding, and energy.
Strategic Investments and Partnerships
One significant development from the trip is Posco Holdings’ announcement of a joint venture with India’s largest steelmaker, JSW Steel. The agreement aims to establish an integrated steel mill with an annual capacity of 6 million tons, with both companies holding equal stakes. This project, targeted for completion by 2031, marks a breakthrough for Posco, which has sought entry into the Indian market since 2004. The demand for steel in India has surged, driven by urbanization and industrial growth, making this venture particularly timely.
In the automotive sector, Hyundai Motor is expanding its manufacturing capabilities in India, where low vehicle ownership rates indicate substantial growth potential. With plants in Chennai, Anantapur, and Pune, Hyundai has an annual production capacity of about 1.5 million vehicles. In the first quarter of this year, Hyundai and Kia achieved record sales of 250,903 vehicles in India, highlighting the market’s upward trajectory. Analysts note that India’s high import tariffs encourage local production, while geopolitical tensions hinder Chinese competitors, positioning established players like Hyundai favorably in the region.
Expanding Maritime and Energy Ventures
Korean shipbuilders are also increasing their footprint in India, with HD Hyundai considering the establishment of a new shipyard in Tamil Nadu and strengthening collaborations with Cochin Shipyard. The company is also expanding its operations in Vietnam, focusing on boosting production capacity in segments such as tankers and bulk carriers, where Chinese firms have traditionally held dominance.
In the energy sector, Korean companies are exploring opportunities in both nuclear and renewable projects in Vietnam. The Vietnamese government’s plan to construct four nuclear reactors in Ninh Thuan province has garnered significant interest, with an estimated investment of approximately 30 trillion won ($20.4 billion). While one reactor project has been awarded to Russia, a consortium of Korean firms is a leading contender for another. Additionally, renewable energy developers are targeting Vietnam’s offshore wind sector, aiming to increase capacity from 6 gigawatts in 2030 to 139 gigawatts by 2050. LS Cable & System, a Korean cable manufacturer, is also contemplating additional production facilities in Vietnam to support this growth.
As Korean companies pivot towards the Global South, they are not only seeking new markets but also establishing critical production bases for exports to Europe, highlighting the strategic importance of these regions in their long-term growth plans.
