By Zarak Khan | 2026-05-01

India and South Korea are expanding economic and industrial cooperation across key strategic sectors. The move reflects a growing effort among Indo-Pacific partners to diversify supply chains and reduce dependence on Sino-centric manufacturing networks, say analysts.

During the first visit of South Korean President Lee Jae Myung to India, from April 19-21, talks between the leaders of the two governments covered ways to "deepen cooperation in various sectors ranging from chips to ships, from talent to technology, from entertainment to energy," said Narendra Modi, Indian prime minister, in an April 20 statement.

Both nations are "bound by shared values and a common outlook on the Indo-Pacific region," Modi said.

Modi and Lee vowed to broaden a strategic partnership underpinned by trade and technology with a focus on shipbuilding, artificial intelligence, finance and defense cooperation.

They welcomed the signing of an industrial cooperation agreement "to expand trade and investment" and "unlock new opportunities for collaboration across industry, with focus on Indian-Korean cooperation in sectors such as automobile, shipbuilding, chemicals, semiconductors, telecom equipment, display, secondary batteries," said an April 20 statement from Modi's office.

The leaders agreed on cooperation to "strengthen supply chains for strategic resources, critical minerals and rare earths; trade of green hydrogen and its derivatives, nuclear power plant projects; and overseas resource development projects," the statement added.

The countries have decided to ​boost their annual trade to $50 billion by 2030, up from approximately $27 billion at present, said Modi.

A delegation of about 200 South Korean business leaders accompanied Lee.

Supply shift

The expansion of cooperation between India and South Korea comes amid a broader shift of global supply chains, with India increasingly positioned as a viable alternative to China across several critical industries.

The McKinsey Global Institute has recently identified India as a leading challenger to China's entrenched dominance in the US technology market.

In 2025, New Delhi took about 40% of the US market for imported smartphones away from China, the report said.

Both India and South Korea are diversifying economic exposure and reducing overreliance on Chinese supply chains, said Ashok Malik, a partner at The Asia Group think-tank.

"India wants to diversify its sourcing away from China in these sectors," Malik told CNBC on April 21.

South Korea represents a useful strategic complement to India, given its advanced capabilities in electric vehicles, electronics manufacturing, semiconductors and artificial intelligence, he said.

Beyond India and South Korea, other major economies, including the United States, are accelerating efforts to reduce dependence on Chinese supply chains and to curb Beijing's expanding influence across strategic high-technology sectors.

In March, an Nvidia-backed US startup and a South Korean conglomerate announced plans to build an artificial intelligence data center that will reportedly be the largest in South Korea.

Strategic alignment

India is intensifying efforts to reinforce a network of strategic partnerships across the Indo-Pacific, a move widely interpreted by regional actors as a response to China's expanding assertiveness.

In China's own neighborhood, New Delhi has increasingly focused on strengthening ties with South Korea. It is positioning the relationship as a key component of its broader regional strategy.

The partnership aligns with India's vision of a "free, open and inclusive Indo-Pacific," underpinned by shared concerns over "supply-chain vulnerabilities, maritime security, and technological resilience," according to an April 18 analysis in the Asia Times.

The analysis cautioned that any inability by South Korea to "effectively manage the expanding influence of China across both its economic structures and security policy" could have implications extending beyond the Korean peninsula, affecting multiple strategic domains.

Last October, India and South Korea held their first-ever joint naval exercise off the coast of Busan, South Korea.

Participating ships included the indigenous Indian stealth frigate INS Sahyadri.

"INS Sahyadri's ongoing operational deployment to the South China Sea and Indo-Pacific underscores India's stature as a responsible maritime stakeholder and Preferred Security Partner," said the Indian embassy in Seoul in a statement at that time.