 Strategic Collaboration of Defense Industry between India and South Korea: Towards a Matured Economic PartnershipChoong Yong Ahn and
Jagannath Panda
No 25-10, Policy Reference from Korea Institute for International Economic Policy Abstract: This study is based on the hypothesis that defense industry cooperation between India and South Korea (ROK) goes beyond the technical dimensions of defense and technology transfer. Instead, it serves as a strategic pathway to foster deeper mutual trust, enhance economic interdependence in trade and investment, and strengthen both countries’ positions as credible middle powers in an increasingly fragmented and volatile international order. Building upon decades of export-driven growth that underpinned the “East Asian Miracle,” South Korea—now the world’s tenth-largest economy—seeks to transition into a sustainable, high-technology economy with the goal of joining the “higher high-income” group, by exceeding a per capita income of USD 40,000. Simultaneously, it is developing a modern and diversified defense portfolio to deter persistent security challenges from North Korea and its ongoing efforts to attain international recognition as a nuclear state. Confronted with external security threats and a protectionist trade environment under US President Donald Trump’s “America First” agenda, Seoul has adopted a dual-track innovation strategy. It aims to become one of the world’s top three artificial intelligence (AI) powers and among the top four global arms exporters in the near future. India—the world’s largest democracy by population—is poised to become the third-largest economy within a few years under Prime Minister Narendra Modi’s “Make in India - Resilient India” policy. Departing from its historically inward-oriented economic posture, India is now positioning itself to seize global trade and investment opportunities. With per capita GDP still around USD 2,400, India seeks sustained high growth through deeper integration into the global economy. On the strategic front, New Delhi seeks to become a military power commensurate with its rising economic stature—not only to meet regional security challenges but also to strengthen its diplomatic profile as a leading middle power and a representative voice of the emerging Global South. Consistent with its long-standing multi-alignment approach, India continues to engage with a wide spectrum of partners, including the Western world, Russia, and China. Given their ambitious national trajectories and complementary developmental strengths, India and South Korea share a strong potential for strategic convergence as like-minded partners. Both nations pursue strategic autonomy and diversification strategies in response to the intensifying US-China rivalry and broader instability across the Indo-Pacific. This shared pursuit of autonomy provides a compelling rationale for both countries to deepen and redefine the nature of their collaboration. Despite these synergies, bilateral economic connectivity remains underdeveloped. The Comprehensive Economic Partnership Agreement (CEPA), launched in 2010, has yet to deliver outcomes comparable to South Korea’s trade and investment linkages with China or Vietnam. In an era of proliferating minilateralism and protectionist fragmentation, both countries must find innovative pathways to unlock their untapped potential and realize the full promise of their strategic partnership. In this context, defense industrial collaboration offers a powerful catalyst for expanding trust, trade, and investment. The India-South Korea partnership in defense production has already yielded tangible results, exemplified by India’s acquisition of the K9 Vajra-T self-propelled howitzer, co-developed with South Korea’s Hanwha Defense—a landmark success story that opens the door for wider cooperation. The implications of such collaboration extend far beyond defense procurement: by working together in arms production and technology transfer, Seoul and New Delhi can cultivate long-term strategic trust and generate spillover effects across broader economic domains. Defense cooperation inherently builds trust because it touches the most sensitive spheres of n Keywords: India-South Korea Strategic Collaboration; Defense Industry; Arms Trade; Industrial Policy; Dual Technology; Security-Trade Nexus; Mutual Trust; K 9 Vajra; Strategic Autonomy; CEPA (search for similar items in EconPapers) Published in Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepre:022554 Access Statistics for this paper More papers in Policy Reference from Korea Institute for International Economic Policy [30147] 3rd Floor Building C Sejong National Research Complex 370 Sicheong-daero Sejong-si, Korea. Contact information at EDIRC. |
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