On the 20th, a scene from President Lee Jae-myung's state visit to India drew attention during the economic mission's schedule. On the sidelines of the Korea-India Business Forum, the head of a major Korean conglomerate and the CEO of an AI-based financial startup stood face to face and exchanged brief greetings. The two were Chung Eui-sun, chairman of Hyundai Motor Group, and Lee Cheol-won, CEO of Afinit. The two were classmates in high school and met again on this day for the first time in decades since graduating from high school.
Chairman Chung is accelerating the expansion of electric vehicles and mobility businesses in India, and CEO Lee is rapidly scaling digital financial services targeting the local middle class.
Chairman Chung is the grandson of the late founder Chung Ju-yung and an owner-executive leading Hyundai Motor Group, Korea's No. 3 conglomerate. CEO Lee worked at Samsung and SK affiliates, then, noting the growth potential of India's mobile finance market, founded Afinit in 2014. He then scaled the business quickly, surpassing 100 billion won in revenue in the Indian market last year.
The meeting between the two executives goes beyond a simple personal connection and shows a snapshot of how Korean corporations are changing their approach to overseas expansion.
In fact, the reason the two executives could meet in India lies in the government's strategy. The government says Korean corporations' entry into India had remained at a large-conglomerate-led "first wave," and now it plans to launch a "second wave" that includes small and midsize enterprises and startups. The government is calling this "a second Korean Wave led by SMEs."
On the 20th, the Ministry of SMEs and Startups signed a memorandum of understanding (MOU) with India's Ministry of Micro, Small and Medium Enterprises on cooperation in the SME sector and agreed to form a Korea-India SME Cooperation Working Group. The plan is to systematize technology cooperation and support for market entry through this framework.
India is a market with high growth potential, backed by a 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 with 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, it will be even more important for Korea's SMEs and startups to target the Indian market, and systematic government support is needed to back this up.
Currently, SME exports center on manufacturing, including semiconductor parts, auto parts, steel sheets, and synthetic resins. Most are in an "indirect export" structure, joining supply chains with large corporations such as Samsung, LG, Hyundai Motor, and POSCO.
Experts first stress the need to strengthen these existing advantages. At the same time, they say SMEs' roles should be expanded in the strategic industries of both countries 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 penetrate the local market. In particular, linking with Korean Wave content such as K-pop and dramas, which are popular worldwide, is advantageous for building brand awareness.
However, entry barriers to the Indian market remain high. Laws, culture, and business environments differ by state, making it difficult for individual corporations to respond.
Maeng Hyun-cheol, a visiting researcher at the Seoul National University Asia Center and an India expert, said, "It is difficult for individual SMEs to resolve problems they face in the process of entering the Indian market," and noted, "The government should serve as a hub to accumulate and share 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 sophistication of local support systems is also cited as a task. In New Delhi, the Global Business Center (GBC) of the Korea SMEs and Startups Agency (KOSME) under the Ministry of SMEs and Startups (MSS) is in operation, but critics say staffing and support functions are insufficient. There are growing calls for expanding specialized personnel and shifting to a locally tailored support system.
Support for SME and startup entry into India being promoted on the back of 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.