The Indian Economy Blog

September 15, 2005

Korea Is Numero Uno

Filed under: Business,Capital markets,Trade — Prashant @ 6:31 pm

Guess which country’s the single largest foreign investor in India?

It’s not any of the usual suspects — the US, the UK or even Japan .

(Via reader Rasul Sharif)Newsweek reports

In one whopping megadeal, South Korea has become the largest foreign investor in Asia’s second emerging giant, India. On Aug. 31, Korean steelmaker Posco established a local subsidiary in the eastern Indian state of Orissa, paving the way for a controversial mill and mining complex that will cost the world’s fifth largest steelmaker $12 billion and employ some 40,000 workers once it’s fully operational in 2010.

By the numbers, Korea now tops the list of countries investing in India since New Delhi launched economic reforms back in 1991—at more than $14 billion. South Korean firms like Hyundai, LG and SK Group have carved out a notable presence in the country—the world’s second largest and a potentially huge market for products like refrigerators, washing machines and television sets.

In just a few years, South Korean brand appeal has eclipsed Japanese rivals like Sony and Honda, and even the nation’s biggest cricket stars have become known as Team Samsung, thanks to a successful sponsorship campaign. (In a cricket-crazy country like India, that’s a big coup — PK)

Importantly, Korean companies have helped India gain self-confidence as a manufacturing nation and an exporter with the potential to rival China in certain industrial sectors.


  1. Korea becomes the largest foreign investor in India

    After many trips back and forth, I’ve always been struck by the prevalence of Korean products in India. There are ads for LG and Samsung appliances, Hyundai cars, and they seem to have collectively gotten the hang of building “locally appr…

    Trackback by Ho John Lee's Weblog — September 16, 2005 @ 9:51 am

  2. I’m a tad skeptical of Posco actually following through on this — not sure if they have the resources. Suspect this announcement has a political/ PR/ vaporware element to it.. #

    W/o Posco, Korea may not be the largest foreign investor in India. Regardless, they’ve been successful — Hyundai, Samsung and LG — and for that, they deserve kudos

    Comment by RK — September 17, 2005 @ 6:18 am

  3. As India upgrades its infrastructure and raises wages, it had better move to high-end, high-margin products or it will risk being caught in between. Foreign investment will move to lower-wage or higher-productity countries. (Hint: Think biotechnology and nanotechnology.)

    Comment by David Govett — September 18, 2005 @ 4:43 am

  4. post-weekend links

    American Expat in Southeast Asia ponders

    Trackback by asiapundit — September 19, 2005 @ 3:33 am

  5. TATA bought daewoo as a thank you gift to Korea.
    On a more serious note.
    There is some issue {I dont know what it is }
    regarding how FDI is computed in India Vs other places.
    Can any one point to or explain how this works.

    Comment by GGK — September 20, 2005 @ 10:17 pm

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