On the 20th, a moment during President Lee Jae-myung's economic mission to India drew attention. On the sidelines of the "Korea-India Business Forum," the head of a leading Korean conglomerate and the CEO of an AI-based fintech startup stood face to face and exchanged a brief greeting. The two were Chung Eui-sun, chairman of Hyundai Motor Group, and Lee Cheol-won, CEO of Afinit. They were classmates in high school and met again on this day for the first time in decades since graduating.
Chung is accelerating the expansion of electric vehicles and mobility businesses in India, while Lee is rapidly scaling digital financial services targeting the local middle class.
Chung is the grandson of the late founder Chung Ju-yung and an owner-operator who leads Hyundai Motor Group, Korea's No. 3 business group. Lee is a business leader who, after working at Samsung and SK affiliates and noting the growth potential of India's mobile finance market, founded Afinit in 2014. He then grew the business quickly, surpassing 100 billion won in revenue in the Indian market last year.
The meeting of the two business leaders goes beyond a simple personal connection and shows a facet of how Korea's corporations are changing their approaches to expansion abroad.
In fact, the reason the two business leaders could meet in India lies in the government's strategy. The government believes Korea's expansion into India has so far remained at a first stage led by large corporations, and now plans to launch in earnest a second stage that includes small and midsize enterprises and startups. The government describes this as "a second Korean Wave led by SMEs."
On the 20th, the Ministry of SMEs and Startups signed a memorandum of understanding (MOU) on cooperation in the SME sector with India's Ministry of Micro, Small and Medium Enterprises and agreed to form a "Korea-India SME Cooperation Working Group." Through this, the plan is to systematize technology cooperation and support for market entry.
India is a market with high growth potential based on its population of 1.4 billion. Experts see the next three to five years as a "golden time" for Korea's technology-based SMEs and startups to gain a foothold locally.
Last year, Korea's SME exports to India totaled $3.25 billion (about 4.7934 trillion won). Compared to major export destinations such as China ($18.9 billion), the United States ($18.28 billion), and Vietnam ($10.83 billion), the scale is not large. Going forward, targeting the Indian market will become even more important for Korea's SMEs and startups, and systematic government support to back this up is also needed.
Currently, SME exports are centered on manufacturing, including semiconductor parts, auto parts, steel sheets, and synthetic resins. Most are "indirect exports" integrated into supply chains alongside large corporations such as Samsung, LG, Hyundai Motor, and POSCO.
Experts first emphasize the need to strengthen these existing advantages. At the same time, they say SMEs' roles should be expanded in the two countries' strategic industries discussed at the Korea-India summit, including shipbuilding, finance, AI, and defense.
Consumer goods such as food and beauty offer another opportunity for SMEs and startups. Unlike manufacturing, direct production and sales under their own brands are possible, making it relatively easier to target the local market. In particular, connecting to Korean Wave content such as K-pop and dramas, which are popular worldwide, is advantageous for building brand recognition.
However, barriers to entry in the Indian market remain high. Laws, cultures, and business environments differ by state, making it difficult for individual corporations to respond.
Maeng Hyeon-cheol, a visiting researcher at the Seoul National University Asia Center and an India expert, said, "It is difficult for individual SMEs to solve the problems they face in the process of entering the Indian market," and noted, "The government should serve as a hub that accumulates and shares information related to local business." He added, "A strategic approach is also needed to avoid industries protected by the Indian government, such as toys and apparel."
Advancing the local support system is also cited as a task. Although the Global Business Center (GBC) of the Korea SMEs and Startups Agency (KOSME) under the Ministry of SMEs and Startups (MSS) is operating in New Delhi, there are criticisms that staffing and support functions are insufficient. There is a growing call for expanding specialized personnel and shifting to a locally tailored support system.
Support for the entry of SMEs and startups into India, promoted in connection with this summit diplomacy, should not be a one-off. Whether India can establish itself as a core market for Korean SMEs after China, the United States, Vietnam, and Japan ultimately depends on the continuity and execution of policy.