Domestic conglomerates are taking the lead in targeting the Indian market, which is emerging as a new global supply chain. As uncertainties continue in the major export markets, the United States and China, developing countries in the Global South, including India, are being spotlighted as strategic locations for diversifying risks.
Koo Kwang-mo, chairman of LG Group, stayed in India for four days starting on the 24th of last month, visiting local research and development centers, production facilities, and product sales sites. This year, he chose India as his first overseas business trip destination, marking his first visit to the country since taking office as chairman in 2018.
In the past year, business leaders have been visiting India one after another. Lee Jae-yong, chairman of Samsung Electronics, visited the Mumbai branch last July, while Chung Eui-sun, chairman of Hyundai Motor Group, traveled to India twice in April and October. Shin Dong-bin, chairman of Lotte Group, has recently engaged in his first overseas management activity in India this year. This marks Shin's first trip to India in nearly nine years.
With the launch of the second term of the Donald Trump administration and the repercussions of U.S.-China trade conflicts, India is considered a promising market to replace China. India is the world's largest populous country with over 1.4 billion people, and its working-age population (aged 15-64) is steadily increasing, making it a consumer powerhouse, with 68% of the total population comprising the working-age demographic. The government is also strongly committed to attracting foreign investment.
The government is expanding support for corporations as one of the response measures to U.S. tariff policies by proposing the diversification of export markets to the Global South. India is currently negotiating tariffs with the U.S., but it remains relatively free from trade friction.
Hyundai Motor, which falls under U.S. tariff policy, is cultivating India as a strategic export hub for expanding its emerging market business. Hyundai Motor India Limited launched the largest initial public offering (IPO) in Indian stock market history last October. The company plans to use the funds raised to enhance investments in localizing electric vehicle production, new cars, and research and development capabilities for future vehicle technology.
LG Electronics is preparing for the listing of its Indian subsidiary, and other affiliates are also planning to continue investing in the Indian market. According to Bloomberg, LG Electronics has recently started an investment briefing session for its IPO, which is expected to raise nearly $1 to $1.5 billion (approximately 1.045 trillion won to 1.078 trillion won). CJ Logistics has also been pushing for the IPO of its Indian subsidiary, CJ Dasal, since 2023.
The entry of Korean companies into the Indian market is not only increasing in appliances, automobiles, and retail but is also gaining momentum in the steel industry. POSCO Group is collaborating with India's leading steel company JSW Group to establish a local integrated steel mill and promote cooperation in battery materials and renewable energy sectors. Shipbuilders are also reportedly discussing cooperation plans under the leadership of the Indian government.
As Korean companies actively enter the Indian market, economic organizations are also increasing intersections between the two countries and enhancing support for local investment and exports. The Korea International Trade Association is in the process of establishing a new India committee by signing a memorandum of understanding (MOU) with the Indian Industry Association, the largest economic organization in India. The Korea Trade-Investment Promotion Agency (KOTRA) plans to dispatch a large-scale trade delegation targeting promising export countries, including India and ASEAN.