The international economic system is undergoing a structural transformation marked by intensifying US-China strategic and economic rivalry, supply chain fragmentation, technological bloc formation, demographic asymmetries, and the gradual reconfiguration of globalization.
Within this evolving geopolitical and geo-economic environment, middle powers are being increasingly compelled to recalibrate their strategic alignments and economic partnerships in order to mitigate systemic risks and secure their long-term resilience.
Recent high-level diplomatic engagements have reinforced the evolving strategic and economic logic underpinning India-South Korea relations. The Sixth India-ROK Foreign Policy and Security Dialogue (February 12-13, 2026), jointly chaired by senior officials from both countries in Seoul, reflected this growing recognition at the political and diplomatic levels of the broader regional environment within which the bilateral strategic partnership is taking shape.
The dialogue signaled a renewed commitment to upgrading cooperation across multiple domains, highlighting the extent to which India-South Korea alignment carries implications that extend well beyond bilateral dynamics. The institutionalization of sustained high-level engagement suggests a transition from transactional bilateralism toward a more structured and strategically embedded partnership with wider regional economic and geopolitical ramifications.
In an era of rapid global structural transition, the strategic logic of deepened economic and technological cooperation between India and South Korea requires continuous recalibration. India-South Korea collaboration can no longer be understood merely as a bilateral trade relationship; rather, it represents a structural response to shared vulnerabilities and complementary strengths.
For South Korea, diversification away from excessive dependence on China, demographic decline, and export concentration necessitates strategic partnerships in emerging markets. For India, industrial upgrading, supply chain integration, and technological modernization require deeper engagement with advanced manufacturing economies.
Global structural pressures and strategic imperatives
The global political economy is entering a phase of structural realignment. The post-Cold War order – characterized by US financial predominance, relatively integrated supply chains and deep trade interdependence – is increasingly strained by intensifying strategic competition between the United States and China.
Although the emerging order is not yet fully bipolar, it exhibits clear tendencies toward bloc formation in advanced technologies, trade regulation, financial governance and security alignments.
For middle powers such as India and South Korea, this transformation generates both risks and opportunities. South Korea remains deeply embedded in global value chains, with exports accounting for a substantial share of GDP. India, by contrast, represents a large but still industrializing economy with significant demographic and market potential. As supply chains reorganize and diversification becomes strategically imperative, the India-South Korea partnership acquires structural relevance.
In this changing environment, India-South Korea economic cooperation should be understood as a systemic adaptation to global fragmentation rather than a narrow commercial arrangement. This emerging partnership between two countries is shaped by three interrelated structural dynamics:
- export concentration and geopolitical exposure,
- demographic asymmetry and labor-market divergence, and
- the formation of competing technological ecosystems.
South Korea’s growth model has historically been export-driven, anchored in semiconductors, automobiles, shipbuilding, consumer electronics and battery technologies. While this model has generated remarkable economic development, it has also produced serious structural vulnerabilities. China remains South Korea’s largest trading partner, while the United States provides critical security guarantees and remains a central technological and financial partner.
In an era of intensifying US-China competition, South Korea faces a complex strategic dilemma. Overreliance on China for manufacturing integration heightens vulnerability to geopolitical shocks, while technological decoupling pressures complicate balanced engagement across competing blocs. Diversification of export markets and production geography is therefore not merely desirable but strategically necessary for South Korea.
South Korea’s demographic trajectory presents an additional structural constraint. With one of the world’s lowest fertility rates, the country faces rapid workforce contraction, rising dependency ratios, and mounting fiscal pressures. Historical experiences, such as Japan’s post-1990 stagnation, illustrate how demographic decline can reinforce economic slowdown. Although South Korea remains technologically dynamic, it must proactively counterbalance demographic headwinds through productivity enhancement, technological upgrading and external partnerships.
Elevated household debt further increases macroeconomic sensitivity to interest-rate cycles and real estate fluctuations, underscoring the importance of diversifying growth drivers beyond domestic demand. In this complex economic and social context, South Korea’s strategic imperative is clear: geographic diversification, technological upgrading and proactive risk hedging.
India, by contrast, represents the world’s most populous country and possesses one of the youngest labor forces globally. If effectively harnessed, this demographic dividend positions India as a long-term growth pole. Unlike China, whose working-age population has begun to decline, India’s demographic momentum remains favorable.
India’s expanding middle class and ambitious infrastructure development agenda are generating significant domestic demand across sectors such as automobiles, electronics, energy systems, transportation networks and digital services – areas in which South Korean firms possess strong competitive advantages. Production-linked incentive (PLI) schemes further signal India’s intention to integrate into advanced manufacturing supply chains spanning electronics, semiconductors, renewable energy components and defense production.
However, India’s industrial transformation requires technological partnerships and capital investment from advanced manufacturing economies. South Korea, with its deep industrial base and globally competitive conglomerates, is well positioned to play this role.
Strategically, India’s role in the Indo-Pacific has expanded through initiatives such as the Quad and increased maritime cooperation. While India maintains strategic autonomy, its concerns regarding regional stability and China’s assertiveness align with broader Indo-Pacific balancing efforts. South Korea’s evolving Indo-Pacific outlook, though more cautious, reflects similar concerns about maintaining a rules-based order, thereby providing a political foundation for expanded cooperation.
Key areas of structural convergence
The 2026 India-ROK Foreign Policy and Security Dialogue represents more than a routine diplomatic engagement; it signifies the institutional consolidation of bilateral strategic coordination. Both sides have emphasized the importance of sustained high-level exchanges, including ministerial visits and expanded sectoral consultations.
Within this evolving framework of institutional consolidation, several key domains of strategic convergence have begun to emerge, reflecting a gradual deepening of cooperation across economic, technological, and security dimensions.
The reconfiguration of global supply chains represents one of the most consequential developments in contemporary political economy. The Covid-19 pandemic and subsequent geopolitical tensions exposed vulnerabilities associated with excessive geographic concentration. For South Korean firms heavily integrated into Chinese manufacturing ecosystems, diversification has become both a commercial necessity and a strategic imperative.
India offers scale, labor availability, and growing policy receptivity to foreign investment. Diversification into India would reduce South Korea’s geopolitical exposure while providing access to a rapidly expanding domestic market. Such a strategy aligns with broader resilience initiatives across the Indo-Pacific and reflects an emerging principle of balanced redundancy rather than outright decoupling.
Semiconductors lie at the core of technological bloc formation. South Korea’s global leadership in memory chips positions it as a critical node in global technology networks, while India seeks to establish fabrication and packaging capabilities to reduce technological dependence. Cooperative models could include South Korean investment in Indian manufacturing facilities and the integration of Indian design talent into South Korean-led ecosystems. Such collaboration would strengthen South Korea’s diversification strategy while accelerating India’s industrial upgrading.
Cooperation in critical minerals and green hydrogen reflects shared concerns about energy transition and resource security. As both countries pursue decarbonization and technological leadership, collaboration in sustainable energy supply chains could become a defining feature of long-term partnership.
Defense industrial cooperation represents another domain of structural convergence. South Korea’s expanding defense export capabilities complement India’s modernization needs. Collaborative production, technology transfer and joint research initiatives could deepen strategic trust. Beyond commercial considerations, defense cooperation fosters durable institutional linkages that reinforce geopolitical alignment.
South Korea’s aging population contrasts sharply with India’s youthful workforce. While large-scale migration may be politically sensitive, targeted skilled mobility programs, research exchanges, and innovation partnerships could mitigate demographic constraints. Joint R&D ecosystems and academic collaboration would enhance productivity and knowledge transfer in both economies.
In a fragmented global environment, diversification functions as macroeconomic insurance. For South Korea, deeper engagement with India reduces systemic vulnerability, while for India, partnership with South Korea broadens technological options and enhances strategic autonomy.
Constraints and policy challenges
Despite compelling structural logic, significant obstacles remain. It is precisely here that future bilateral interactions, such as the India-ROK Foreign Policy and Security Dialogues, must devote greater attention going forward. Despite the best initiatives taken by the current political dispensation in India, regulatory unpredictability and bureaucratic complexity still deter sustained South Korean investment. That leads firms to remain cautious about relocating deeply embedded supply chains.
Upgrading existing trade frameworks, particularly the Comprehensive Economic Partnership Agreement (CEPA), has therefore become increasingly urgent. Leadership in both countries must accelerate negotiations toward an updated agreement that reflects the structural transformations underway in the global economy. Failure to conclude a modernized CEPA risks undermining the long-term economic potential of the partnership and could impose multidimensional costs on both economies.
Furthermore, domestic political considerations in both countries may shape strategic and economic prioritization. Going forward, both sides must devote greater attention to these dynamics and develop new institutional frameworks to better align differing domestic political imperatives. Without effective management, such divergences could generate friction and potentially undermine the long-term stability and effectiveness of the partnership.
Differences in regulatory environments, industrial policy frameworks, and geopolitical alignments are generating coordination challenges that can no longer be overlooked. Effective cooperation will therefore require broader, deeper and more sustained institutional dialogue; enhanced regulatory transparency; and long-term political commitment accompanied by strategic clarity from both sides.
The persistence of strategic ambiguity in the bilateral relationship must be addressed, as sustained ambiguity risks diluting policy coherence and constraining the full realization of the partnership’s strategic potential.
The future of the global economic order will not be determined solely by superpower rivalry but also by the adaptive strategies of middle powers. The time has come to understand India-Republic of South Korea economic cooperation as a strategic adaptation to systemic transformations in the world economy rather than a conventional bilateral economic relationship.
It is time to factor in the global structural transition in this evolving partnership and bring about a paradigm shift in the strategic and economic thinking of both countries to build a strong and durable partnership between two of the most dynamic economies of Asia.
