South Korean IT & Tech Business in India – Opportunities & Setup

Introduction: India-Korea Tech Partnership & Business Apex

Why the Partnership Matters Now

The collaboration between India and South Korea is entering a pivotal phase, especially in the tech & digital services arena. Here’s why:

• Korea brings deep strengths in semiconductors, electronics & hardware design, 5G/6G infrastructure, smart-factory automation and EV-component manufacturing. These align directly with India’s strategic push under initiatives such as Digital India, Make in India and the Production Linked Incentive (PLI) scheme.
• India offers scale (1.4 billion + population), a booming tech services ecosystem (IT/BPM exports, fintech innovation) and cost-competitive manufacturing. For Korean digital companies and chaebol, the Indian market presents both consumer-demand opportunity and manufacturing-base potential for global supply chains.
• With global supply-chain realignments (amid semiconductor/geopolitical stress) and India’s target to build its tech/manufacturing base, the India-Korea axis offers a clear win-win: Korea’s tech + India’s scale/localisation = strategic value.

Setting up a South Korean business in India unlocks significant tech and market opportunities, leveraging India’s growing consumer base and favorable policies like “Make in India.” With high valuation multiples and access to a skilled workforce, South Korean firms are capitalizing on India’s strategic advantages for local manufacturing and tech collaboration.

Snapshot of Major Numbers

Metric	Value	Insight for Tech & Business Entry
Bilateral trade (India-Korea, FY25)	~ US$ 26.89 billion	Indicates growing economic engagement; tech/hardware trade is key.
Korean FDI into India (Apr 2000 – Mar 2025)	~ US$ 6.69 billion	Shows Korea as 13ᵗʰ largest investor in Indiaroom to grow especially in tech/manufacturing.
India’s tech sector share of GDP (FY24)	~ 7.3 %	Demonstrates the size and relevance of India’s digital economy for Korean firms.
Korea’s exports to India (2024)	US$ 18.66 billion	Highlights Korea’s export footprint in electronics/hardware as potential origin of tech collaboration.
India’s exports to Korea (2024)	US$ 5.88 billion	Implies an existing trade imbalance and opportunity for India to deepen its tech-exports (and for Korea to invest).

These figures set the foundation for why the partnership is timely and relevant for Korean digital companies, Indian investors and start-ups eyeing cross-border collaboration.

Market Sizing & Context: Indian IT Market, India’s Digital Economy & Korea’s Role

Indian IT & Tech Ecosystem

Key Figures & Growth Metrics

• India’s electronic goods exports surged by 40.63 % during April-August 2025, rising by USD 5.51 billion over the same period in the prior year.
• During July 2025, electronic goods exports rose by 33.89 % (US$ 3.77 billion) over July 2024 (US$ 2.81 billion).
• As of FY2024-25, India’s IT services exports reached approximately US$ 224.4 billion, representing growth of around 12.5% year-on-year.
• India’s startup ecosystem: over 185,000 startups recognised under the Startup India initiative.
• Key policy-drivers: Digital India, Make in India and the Production Linked Incentive (PLI) Scheme for electronics & manufacturing, all actively shaping India’s tech-manufacturing growth.

Why This Matters for Korean Firms

• The rapid growth in electronics exports underlines India’s rising manufacturing capability and global integration  making it an attractive site for localisation of Korean digital companies, electronics system design & manufacturing (ESDM), and smart-factory deployment.
• The strong IT services base (US$ 224 billion exports) indicates a resilient services ecosystemKorean firms in fintech, cybersecurity, digital platforms can tap India both as a market and as a development base.
• The large number of start-ups (~185,000) means India is not just an execution market but a source of innovation. Korean companies can partner, co-innovate and bridge Korea’s hardware/semiconductor strength with India’s software/start-up momentum.

Korea’s Technology Strength & India Relevance

South Korea’s Core Capabilities

• Electronics manufacturing and systems: Korea is home to major chaebol with global leadership in displays, memory, hardware design and manufacturing.
• Semiconductor prowess: Korean companies dominate memory, logic, and advanced packaging  providing technology transfer opportunities into India’s emerging chip ecosystem.
• 5G/6G infrastructure & smart-factory automation: Korea is globally advanced in deploying next-generation networks and Industry 4.0 capabilities.
• EV components and green-tech: Korean firms are active in EV battery/parts manufacturing, aligning with India’s clean-energy and EV-supply-chain push.

How Korea Can Leverage India

Strategy	Indian Opportunity	Korean Firm Advantage
Manufacturing localisation (ESDM/semiconductors/EV parts)	India’s PLI-driven incentives and rising electronics export growth (40.63% jump)	Korean hardware & parts expertise; potential to serve global markets via India base
Technology transfer & smart-factory deployment	India’s manufacturing upgrading under Make in India; electronics exports up ~33–40% in key months	Korean smart-factory systems and automation expertise
Digital services, fintech & cybersecurity	Large Indian IT/export ecosystem (US$ 224 billion) and startup pool ~185k; mobile/Internet penetration high	Korean digital companies can collaborate with Indian software/start-ups to offer joint solutions
5G/6G & network infrastructure	India’s next-gen network rollout will require ecosystem partners	Korea’s network OEMs and system integrators can enter India’s build-and-operate cycle

Why The Timing Is Right

• Global supply-chain re-shoring and geopolitical diversification push India to become a manufacturing plus innovation hub; Korea is seeking to diversify from China-centric production.
• India-Korea bilateral frameworks and startup-hub initiatives are now operational  reducing entry friction for Korean tech/investment players.
• The scale of India’s digital economy and fast-growing electronics export base offer a growth platform rather than just a local market.

India-Korea Bilateral Trade & Investment Framework

Bilateral Trade Snapshot – India & South Korea

Key Figures

• The total bilateral trade between India and South Korea in FY 24-25 reached US$ 26.89 billion.
• India’s exports to South Korea stood at approximately US$ 5.82 billion in FY 25.
• India’s imports from South Korea in the same period were around US$ 21.07 billion. 
• Outlook: Bilateral trade is projected to reach US$ 50 billion by 2030.

Trade Composition – Key Product Categories

Direction	Category	Value (approx)	Notes
India ➜ Korea	Engineering goods	US$ 2.6 billion	Largest Indian export category.
India ➜ Korea	Petroleum & chemical	US$ ~1.7 billion (petroleum US$ 0.964bn + chemicals US$ 0.730bn)	Heavy weight among Indian exports.
India ⬅ Korea	Electrical products	US$ 5.15 billion	Korean exports dominate Indian import profile.
India ⬅ Korea	Iron & steel, petroleum refined products, plastics	US$ ~ (2.59 + 2.36 + 2.29) = ~US$ 7.24 billion	Key Korean-to-India flow.

Why These Figures Matter for Tech & Business Entry

• The large trade imbalance (India imports ~4× from Korea than it exports) underscores the depth of Korea’s hardware/electronics supply into India, a direct pathway for Korean IT and digital companies to plug into Indian manufacturing and services value-chain.
• A trade volume target of US$ 50 billion by 2030 signals strong growth momentum, making this a timely entry point for Korean firms in areas like ESDM (Electronics System Design & Manufacturing), semiconductor inputs, EV components and digital services.
• The composition data shows that electronics, electrical machinery, chemicals and mechanical goods are key sectors  very much aligned with the priority technologies (5G/6G, smart factory, AI/tech transfer) where Korean firms operate.

Korean FDI in India & CEPA Framework

Korean FDI in India

• From April 2000 to March 2025, cumulative Korean FDI into India stood at US$ 6.69 billion.
• South Korea is India’s 13ᵗʰ largest investor among countries for the period.
• Sectors attracting Korean FDI include metallurgy, automobile, electronics, machine-tools, hospitals/diagnostic centres.

Role of CEPA (Comprehensive Economic Partnership Agreement)

• The Comprehensive Economic Partnership Agreement between India and South Korea (India-Korea CEPA) was signed on 7 August 2009 and implemented from 1 January 2010. 
• CEPA’s key objectives include liberalising trade in goods & services, strengthening investment frameworks, expanding economic cooperation in manufacturing and services. 
• Under CEPA:
  • Services including IT/engineering, legal, financial services gain market access. 
  • Manufacturing sectors such as electronics and automobiles benefit from tariff cuts, standards harmonisation and rules of origin.

Recent High-Tech Collaboration Agreements

• In 2024 H2, bilateral trade volume reached ~US$ 25.1 billion; Korean exports to India ~US$ 18.7 billion. Investment from Korea increased by ~20% in Jan-Sep 2024 (to ~US$ 420 million). 
• The Governments of India and Korea are actively negotiating joint initiatives in high-tech sectors  electronics manufacturing, EV components and digital supply-chains  as part of deeper CEPA expansion and strategic collaboration.

Implications for Korean Digital / Tech Firms

• CEPA provides preferential market access and a structured framework that supports Korean firms’ entry into India’s services, electronics, smart-factory and digital supply-chain sectors.
• The existing FDI quantum (US$ 6.69 billion) is modest relative to the size of the opportunity; therefore first-mover advantage remains.
• The alignment of high-tech collaboration (semiconductors, EV parts, 5G/6G rollout, technology transfer) makes India an attractive strategic expansion choice for Korean IT and digital companies.

Strategic Technology Sectors for Korean Companies in India

Semiconductor Manufacturing & Technology Transfer

• India’s semiconductor market is projected to grow from around US$38 billion in 2023 to US$45–50 billion by end-2025, and further to US$100–110 billion by 2030. 
• The governments of India and South Korea have resolved to set new industrial ambitions in semiconductors, AI, clean energy and digital supply chains. 
• Korean firms with advanced chip design, memory and packaging technologies are ideally positioned to localise production in India under India’s “Make in India” and PLI (Production Linked Incentive) schemes. This includes:
  • Setting up fab/assembly & test facilities in India.
  • Transferring technology in packaging, IP-blocks, display and system-on-chip design where Korea excels.
  • Leveraging India’s large market, talent pool, and growing supply-chain localisation mandate to serve both Indian and global demand.
• Business-opportunity highlights for Korean companies:
  • First-mover advantage in India’s semiconductor ecosystem (fabrication + design + supply-chain).
  • Incentive advantage: India’s Scheme for Semiconductor Mission plus localisation push.
  • Partnership model: tie-up with Indian start-ups or electronics/manufacturing clusters to accelerate setup.

Electronics System Design & Manufacturing (ESDM)

• Indian export data: Electronic goods exports increased by 25.93% to US$ 2.93 billion in August 2025 (from US$ 2.32 bn in August 2024).
• Earlier in April 2025, electronic goods exports grew by 39.51% year-on-year (US$ 3.69 billion vs US$ 2.65 billion) for the month.
• For Korean hardware/IoT/display companies:
  • India’s PLI scheme for electronics manufacturing offers production-linked incentivesKorean companies can qualify by localising manufacturing and supply-chain.
  • Korean design-to-manufacture capability can add value in India’s ESDM sector: from components to smart devices.
  • Local design-centres + assembly units in India enable access to both Indian demand and export markets, aligning with “India business setup” and “market entry strategy India”.

Electric Vehicle (EV) Components & Green Tech

• In October 2025, India and South Korea agreed to explore joint initiatives in electronics, EV components and digital supply chains. 
• India’s clean-tech and green-energy manufacturing ambition aligns with Korean strengths in EV-components, battery technology, smart factory lines for automotive manufacturing.
• Strategic entry modes for Korean companies:
  • Set up manufacturing units for EV components (motors, battery management, power electronics) in India: tapping “Korean EV components India”.
  • Deploy “smart factory technology” in EV-parts manufacturing – Korean automation + Indian cost/scale base.
  • Leverage India’s green-tech incentives and tie-up with Indian automotive/EV firms for localisation.

5G/6G, AI Collaboration & Smart Factory Technologies

• The India-Korea high-tech collaboration agenda explicitly includes AI, semiconductors, ship-building and clean energy in the new industrial ambition.
• Korean firms can bring global leadership in 5G/6G network infrastructure, Industry 4.0 smart-factory solutions, and AI-driven automation to the Indian manufacturing ecosystem.
• Key value propositions:
  • Establish joint R&D hubs or startup-incubators under the “India-Korea Startup Hub” initiative to develop AI, smart-factory, cybersecurity & IoT solutions.
  • Offer turnkey “smart factory” deployments for Indian manufacturers under Make in India/PLI: sensor networks, predictive maintenance, robotics, AI-driven quality control.
  • Introduce next-gen network/5G/6G infrastructure services: positioning “Korean digital companies” as ecosystem partners for India’s digital economy.

Cybersecurity, FinTech & Digital Services

• With India’s digital economy growing rapidly and its startup ecosystem scaling, there is strong demand for cybersecurity, fintech and digital-services solutions.
• Korean digital companies can tap this via:
  • Partnerships/Joint-ventures in FinTech, digital-payments and embedded finance in India’s consumer and enterprise segments.
  • Export and localisation of cybersecurity solutions: protecting India’s digital supply‐chains, manufacturing plants (smart factories), and 5G/6G networks.
  • Co-innovation with Indian start-ups through the India-Korea startup-hub framework: combining Indian software services / fintech scale + Korean technology depth.

Market Entry Strategy & Business Setup for Korean Firms in India

Business Setup Options & Regulatory Considerations

Legal entity options:

• Wholly-owned subsidiary (Private Limited Company): Enables 100% foreign direct investment (FDI) under the automatic route in most manufacturing and IT services sectors. 
• Joint venture (JV) with Indian partner: Useful for localisation, tapping existing networks, meeting “Make in India” or PLI-scheme eligibility.
• Branch office/Representative office: Suitable for limited operations such as market research, liaison; not for full manufacturing or trading activities.

Key recommendations for Korean chaebol and digital companies:

• Establish a Design & Development (R&D) Centre in India to access talent, cost arbitrage and innovation in the Indian IT/start-up ecosystem.
• Set up a local manufacturing base (assembly/ESDM/EV components/semiconductors) to qualify for India’s Production Linked Incentive (PLI) scheme and “Make in India” benefits.
• Leverage the Comprehensive Economic Partnership Agreement between India and South Korea (India-Korea CEPA) for services and IT business entry:
  • Preferential access for Korean firms in Indian services and Korean legal/regulatory recognition of Indian services.
  • Reduced tariff/barrier benefits in goods, enabling smoother import/export of components or finished goods.

Regulatory checklist for Korean firms:

• FDI rules (sector-specific caps; automatic route vs government route)
• Incorporation via National Single Window System (NSWS) for ease of approvals. 
• Compliance under Foreign Exchange Management Act (FEMA), accounting, tax registration (GST, corporate tax), local labour laws.
• IP protection, local data-law compliance (cybersecurity, fintech), localisation norms under “Make in India”.

Choosing the Location, Ecosystem & Manufacturing Hubs

Key Indian states/regions favoured by Korean investment:

• National Capital Region (NCR – Delhi/Gurgaon) – strong services, IT-ESDM ecosystem.
• Mumbai / Maharashtra – strong service base for AI-IT ecosystem.
• Hyderabad / Andhra Pradesh – Tech and IT service base for cloud infrastructures
• Bangalore – IT & Tech base for AI, Cloud, latest technologies.
• Chennai / Tamil Nadu – strong manufacturing base (electronics, auto/EV components).
• Pune / Maharashtra – automotive and electronics cluster, smart-factory zones.

Why locate in manufacturing/tech hubs:

• Infrastructure advantage: dedicated electronics parks, SEZs, smart-factory zones.
• Incentive access: state and central policies aligned with central PLI/semiconductor missions.
• Supply-chain proximity: access to Indian component manufacturers, logistics hubs, skilled workforce.
• Korean-friendly clusters: Korean firms already present in Tamil Nadu, Maharashtra, enabling ecosystem synergies.

Partnering with Indian Start-ups & Tech Ecosystem

Why this matters:

• India’s start-up ecosystem (>185,000 recognised start-ups) provides innovation, software talent, domestic consumer-market access.
• Korean digital companies and chaebol can co-innovate, co-invest, or acquire Indian start-ups to strengthen localisation, R&D and market reach.
  

Collaboration benefits table:

Indian Start-up Metric	Korean Collaboration Benefit
~185,000 start-ups (India)	Tap Indian software/fintech talent; offset cost-base
Fast-growing mobile/digital consumer market	Korean firms access large base + localisation insights
India-Korea Startup Hub initiative	Platform for joint incubation, tech-transfer, joint ventures

Incentives, PLI & Government Support

Key scheme: India’s Production Linked Incentive (PLI) for Electronics & IT-Hardware

• Incentives of 4%-6% on incremental domestic sales of specified goods under target segments.
• By June 2025, the PLI schemes had attracted US$ 21 billion in investments and disbursed about US$ 2.4 billion in incentives across 14 sectors.
• New PLI component launched for electronic components/passive electronics (INR 22,919 crore ≈ US$ 2.7 billion) announced March 2025.

Incentive matrix (relevant to Korean digital/manufacturing firms):

Scheme	Target Sectors	How Korean Firms Can Tap
PLI for Electronics/IT Hardware	Laptops, Servers, IoT devices, displays	Establish manufacturing in India, localise supply-chain for Korean hardware/IoT firms
PLI for Electronic Components	PCBs, sensors, passive components	Korean component specialists can set up plants, act as supply-chain for Korean and Indian OEMs
Make in India	Broad manufacturing push	Combine Korean brand/quality + Indian cost/manufacturing base
CEPA Scheme	Trade & service facilitation India-Korea	Korean firms in IT services / digital business can enter via preferential treatment

Risk Management & Localisation Strategy

Key risks:

• Local regulatory/land/clearance delays and state-policy heterogeneity.
• Supply-chain risks: component localisation, import dependence.
• Mandates under “Make in India” for local manufacturing or value-addition.
• Cultural, management and market-entry adaptation risks.
  

Mitigation strategies:

• Form a JV or local partner  leverages Indian local knowledge, network, regulatory navigation.
• Plan early for technology transfer and localisation  fulfil local value-addition norms, align with PLI eligibility.
• Use Korean brand and high-quality reputation + Indian cost base/manufacturing scale to build competitive advantage.
• Leverage India-Korea CEPA, Korea Plus programme (for Korean investors) and engage professional Indian legal/financial advisors for compliance.

Bottom line: For South Korean IT, digital and manufacturing firms aiming at India, a clear market-entry blueprint exists: choose the right legal vehicle, pick a location aligned with your sector, partner with Indian start-ups/ ecosystem, tap central/state incentives (especially PLI), and execute a localisation strategy that blends Korean tech strength with India’s manufacturing and market scale.

Quantitative Opportunity Map & Forecasts

Projected Growth of India’s Digital Economy & Strategic Sectors

Here are key forecasts and figures that highlight the scale of opportunity for Korean IT & tech firms entering India:

Indicator	Current / Recent Value	Forecast by 2030	Implication for Korea-India Opportunity
India’s semiconductor market	~ US$ 54 billion in 2025	~ US$ 100–108 billion by 2030	Significant room for Korean firms in chip design, localisation, supply-chain.
India’s electronics manufacturing output		Target up to US$ 282-500 billion by 2030	Huge scale-up for Korean ESDM, display, hardware localisation.
India’s electronics exports	US$ 29.12 billion in FY24	More than US$ 50-61 billion by 2030	Direct export opportunities for Korean manufacturing + India base.
India-Korea bilateral trade	US$ 26.89 billion in FY25 (approx)	Target US$ 50 billion by 2030	Upside for Korean firms to capture incremental trade and investment flows.

Key Sectors + Expected Korea-India Opportunity Size by 2030

This table summarises the major sectors relevant to Korean firms, and rough order-of-magnitude opportunity size by 2030:

Sector	India’s 2030 Target / Forecast	Korean Firms’ Opportunity	Comments
Semiconductors & chip design	US$ 100-108 billion market in India by 2030	Potential share of US$10-20 billion for Korean partners in manufacturing, design-services & localisation	Korea’s strength in memory/packaging + India’s localisation push
Electronics System Design & Manufacturing (ESDM)	Up to US$ 282-500 billion manufacturing output in India by 2030	Korean hardware/IoT/display suppliers could target US$20-30 billion incremental capacity via India base	Localisation and PLI-linked incentives critical
EV Components & Green Tech	Indian EV component market (embedded in semis + electronics) forecast high double-digit CAGR	Korean EV parts + battery systems + smart-factory lines could capture US$5-10 billion India-based output	Strategic alignment with Korea’s EV supply-chain strength
5G/6G, AI & Smart Factory Technologies	Indian digital economy growth; manufacturing modernisation projected US$1.7-2 trillion revenue in “future arenas” by 2030	Korean firms in network infra, AI platforms and smart-factory solutions could target US$3-5 billion India business	Early-mover advantage in digital services + localisation
Cybersecurity, FinTech & Digital Services	Indian fintech & digital services exports rising (India’s services exports US$387.5 bn FY25)	Korean digital companies + fintech/cybersecurity players could aim for US$1-3 billion revenue in India by 2030	Korea can bring tech + India provides market/talent base

Strategic Implication & Action-Points for Korean Firms

• Secure a base early: With market potential spread across dozens of billions of dollars by 2030, being among the first Korean players in India’s semiconductor/ESDM sectors offers long-term advantage.
• Localise + scale: To capture any meaningful share of the US$100-500 billion manufacturing and export opportunity, Korean firms must build local factories/design centres, and qualify for India’s PLI/Make in India incentives.
• Integrate value-chains: Korea’s expertise in hardware, semiconductors, network infra, EV components aligns richly with India’s scale and policy push; synergy = sustainable competitive edge.
• Leverage bilateral frameworks: The India-Korea trade & investment trajectory targeting US$50 billion bilateral trade by 2030 underscores the supportive macro-policy backdrop.

Case Studies: Korean Firms in India

Overview

Korean conglomerates have established deep roots in India’s manufacturing and technology landscape. From consumer electronics to automotive and EV components, these firms have leveraged India’s policy incentives, cost advantages, and growing consumer market to achieve scale and valuation success unmatched in other jurisdictions.

Short Profiles of Major Korean Tech & Manufacturing Firms

Samsung Electronics

Presence in India:
Entered India in 1995; operates a smartphone and mobile-device factory in Uttar Pradesh described as the world’s largest mobile factory and an appliances/TV plant near Chennai.

Key Success Factors:

• Massive local manufacturing scale
• R&D centres in Noida and Bengaluru
• Strong brand localisation and deep supply-chain integration

LG Electronics

Presence in India:
Investing ₹5,000 crore (~US$600 million) in a new plant at Sri City, Andhra Pradesh, to expand its local manufacturing footprint.

Key Success Factors:

• Large-scale localisation and “Make in India” alignment
• Indian workforce integration and manufacturing focus
• Expansion supported by government production-linked incentive (PLI) schemes

Valuation Impact:
LG’s India business has emerged as a significant contributor to its global portfolio. With its expanding local operations and dominant market share in consumer electronics, LG’s Indian arm now commands valuation multiples that far exceed those seen in comparable emerging markets. Analysts note that the price-to-earnings (P/E) multiples of Indian-listed manufacturing peers are significantly higher, a signal that LG’s India operations, if ever spun off or listed, could unlock valuation premiums rarely achievable in other jurisdictions.

Hyundai Motor Company & Kia Corporation

Presence in India:
Entered India in 1996; Hyundai operates one of its largest global production facilities in Chennai and another in Sriperumbudur, while Kia has set up an advanced manufacturing unit in Anantapur, Andhra Pradesh.

Key Success Factors:

• Deep localisation of EV and automotive components
• Collaboration with Exide Industries (2024 MoU) to establish a domestic EV-battery manufacturing ecosystem
• Leveraging Korea’s EV tech with India’s cost-efficient supply chain

IPO Milestone & Valuation Uplift:
In 2024, Hyundai’s India unit filed for an IPO estimated between US$2.5–3 billion, positioning it among India’s largest automotive listings. The potential valuation based on India’s higher P/E multiples compared to Korea and other global markets demonstrates investor confidence in India’s domestic consumption story and manufacturing ecosystem.
The listing underscores a broader trend: Korean companies in India are achieving valuations far beyond what similar assets would command in Korea, ASEAN, or other emerging markets.

Highlighting Success Factors

1. Localisation of Manufacturing & Supply Chain

Korean firms have embedded production capabilities in India to reduce costs, strengthen market presence, and export regionally — notably demonstrated by Samsung and LG.

2. Technology Transfer & Design-Centre Strategy

Establishing R&D and design hubs in Noida and Bengaluru has enabled Korean firms to tap India’s engineering talent pool while aligning product design to Indian consumers.

3. Policy Alignment & Incentive Utilisation

Large Korean investments align with India’s “Make in India” and PLI frameworks, particularly across electronics, EVs, and green-tech sectors.

4. Operational Excellence in Local Conditions

Adapting Korea’s precision-driven manufacturing culture to India’s operational realities has enabled scalable, high-quality output across multiple product categories.

5. Leveraging Bilateral Regulatory Frameworks

The India–Korea CEPA and bilateral startup/innovation partnerships have created smooth pathways for cross-border investments, technology transfer, and service collaborations.

Real-World Example: Smart Factory & EV Component JV

Project: Hyundai Motor & Kia – Exide JV (2024)

Details:

• MoU signed with Exide Energy Solutions Ltd. to localise EV battery manufacturing in India
• Investment size: ~₩3.25 trillion (~US$2.4 billion) over 10 years starting 2023
• Scope: EV model development, advanced battery production, and technology transfer

Significance:
This joint venture exemplifies the synergy between Korean engineering excellence and India’s manufacturing cost advantage. It is part of a broader pattern of Korean-Indian collaboration in EV and smart factory technologies, positioning India as a global hub for green-tech manufacturing.

Key Takeaway: India as a Valuation Multiplier for Korean Companies

India is not just a production base it’s a valuation growth engine.
For companies like LG and Hyundai, the combination of local manufacturing depth, a robust domestic market, and India’s premium equity valuations has transformed the country into a strategic market that outperforms global benchmarks in investor perception and capital value creation.

How to Set Up a Korean Business in India  Step-by-Step Guide

Designed for Korean chaebol, tech manufacturers, digital companies, investors and start-ups planning India business setup under Make in India, PLI, and CEPA benefits.

Step 1 – Decide the Entry Route (entity type & permissions)

Pick the right legal form (typical choices):

Route	When to use	Key points
Wholly-Owned Subsidiary (Private Ltd.)	Full-fledged India operations (IT services, ESDM, EV components)	100% FDI allowed under automatic route in most sectors; incorporate via MCA SPICe+; single-window add-ons: PAN, TAN, GST, EPFO/ESIC.
Joint Venture (JV) with Indian partner	Faster localisation, supply-chain access, PLI eligibility	Helps meet local value-addition targets and scale manufacturing quickly.
Liaison/Branch/Project Office (LO/BO/PO)	Limited scope, pre-market/ project execution	Open under RBI/AD-I bank framework; specific activity limits; reporting & closure norms via AD bank.

Tip: For Korean semiconductor/ESDM/EV plays, prefer subsidiary or JV to access PLI and state incentives.

Step 2 – Incorporate the Company (subsidiary/JV)

• Use MCA SPICe+ integrated webform (name reservation + incorporation + DIN + PAN/TAN + optional GSTIN) on the MCA portal. 
• Prepare charter docs (MoA/AoA), India-resident director (as required under Companies Act), registered office proof, and KYC.
• Post-incorporation: open bank account, issue share certificates, and make initial FDI reporting as applicable under FEMA.

Step 3 – Obtain Core Business Registrations

• GST (indirect tax): online application (REG-01), with faster turnarounds for non-risky taxpayers per recent GST Council reforms; check document checklist.
• IEC (Importer-Exporter Code) for any import/export (components, devices).
• DPIIT Startup Recognition (optional but valuable for tech/AI/ESDM start-ups; tax & compliance benefits).

Step 4 – Map Approvals with Single-Window Systems

• Use NSWS (National Single Window System) to identify and apply for central/state pre-establishment & pre-operation approvals (factory, land, pollution, utilities). Its KYA module covers 32 central depts & 35 states.
• Check state single-window portals (e.g., Nivesh Mitra in Uttar Pradesh; many states digitised approvals to speed timelines). 

Step 5 – Choose Location & Cluster (manufacturing/tech hubs)

• Proven Korean-friendly regions: NCR (Gurugram/Noida) for IT/ESDM; Chennai/Tamil Nadu and Pune/Maharashtra for auto/EV & electronics clusters (per Exim/industry data). Align with PLI states for incentives and supplier depth.

Step 6 – Align to CEPA & FDI Policy

• CEPA (India–Korea) eases trade in goods & services; useful for IT services, electronics, components movement and market access.
• Confirm sectoral caps/routes in Consolidated FDI Policy (DPIIT) before investing; most IT/ESDM/EV-components under automatic route. 

Step 7 – PLI, Make in India & Localisation Plan

• Map your product lines to PLI schemes (Electronics/IT hardware, components, semiconductors, EV ecosystem) to unlock 4–6% production-linked incentives and state add-ons.
• Structure local value-addition, vendor development, and technology transfer roadmap to meet PLI and state policy thresholds. 

Step 8 – Compliance, Banking & FEMA/RBI touchpoints

• For LO/BO/PO: secure AD-I bank approval, file reports (Annual Activity Certificate), and follow closure/upgrade norms (e.g., LO→BO). 
• For FDI inflows into a company: adhere to FEMA reporting timelines via AD bank in line with DPIIT policy. 

Step 9 – Build the India Operating Model (people, partners, incentives)

• Design & Development Centre (Bengaluru/Noida/Pune) for AI/5G/ESDM design; pair with plant in a PLI-eligible state for scale.
• Use India–Korea Startup Hub to source partners for smart factory, cybersecurity, fintech, ESDM co-innovation. 

Step 10 – Risk Management & Fast-track Checklist

Top risks: approvals sequencing, land & utilities, supply-chain localisation, and multi-state compliance.
Mitigation:

• JV with a reputable Indian partner; phased capex tied to milestone-based incentives; early NSWS KYA run-through.
• Lock vendor development/MoUs; plan duty/GST impact with IEC in place; keep RBI/DPIIT filings current. 

Key Insights & Strategic Takeaways for Investors

1. Early-Mover Advantage in India’s Tech & Manufacturing Push

• India’s electronics manufacturing is projected to reach US$ 282–500 billion by 2030.
• Korean companies that localize now particularly in semiconductors, ESDM, EV components, and digital infrastructure can lock in PLI and state incentives while competition remains limited.

2. Perfect Alignment of Korea’s Strengths with India’s Digital Economy

• Korea leads in semiconductor design, smart-factory automation, EV batteries, and 5G/6G; India is driving a US$ 1 trillion digital economy by 2030.
• Combining these creates a mutually reinforcing ecosystem where Korean tech excellence meets India’s scale and software capabilities.

3. Leverage CEPA for Preferential Market Access

• The India-Korea Comprehensive Economic Partnership Agreement (CEPA) reduces tariffs and eases market entry for goods and services sectors including IT and electronics exports.
• Firms using CEPA benefit from simpler customs procedures and dual-country R&D/service mobility rights, accelerating cross-border operations.

4. Capitalise on PLI Schemes and State Incentives

• India’s Production Linked Incentive (PLI) program has already attracted over US$ 21 billion in investments across 14 sectors.
• Korean digital and hardware firms can qualify for 4–6% production subsidies, especially in electronics, semiconductors, and EV manufacturing.

5. Smart Localisation & Risk Management as a Differentiator

• Local value-addition, supply-chain integration and compliance under Make in India reduce regulatory risk.
• Korean companies using JV structures or technology-transfer models mitigate entry risks and qualify for local incentives sooner.

6. Strategic Cluster Entry = Faster Scalability

• NCR (Noida), Chennai and Pune have become the preferred locations for Korean investments, backed by sector-specific industrial corridors, smart-factory zones and export parks.
• Locating within these clusters ensures access to vendor networks and reduces operational costs by up to 20-25 %.

7. Winning Formula for Korean Firms

Korean Technology Excellence + Indian Market Scale + Manufacturing Cost Arbitrage = Sustainable Global Advantage

• Korea’s innovation and engineering capability paired with India’s low-cost manufacturing and massive consumer base creates a high-return investment environment.
• The India-Korea partnership is not just a bilateral playit’s a strategic gateway to global supply-chain realignment across Asia and the Indo-Pacific.

Establishing a successful presence in India requires more than technology and investment; it demands strategic legal and financial planning from the outset. For South Korean tech, manufacturing, and digital firms, navigating India’s regulatory landscape covering FDI, FEMA, CEPA, and Production Linked Incentive (PLI) norms can be complex without localized expertise. Partnering with experienced Indian advisors ensures smooth incorporation, compliance, and capital structuring aligned with both Indian and Korean regulations.

Treelife stands out as a trusted legal and financial advisory partner for Korean businesses expanding into India. With deep expertise across corporate law, finance, and startup-investor transactions, Treelife offers end-to-end support from entity setup, FEMA filings, and tax structuring to due diligence, VCFO, and regulatory compliance. By combining India-entry advisory with operational and strategic financial guidance, Treelife helps Korean companies confidently scale in India’s high-growth digital and manufacturing sectors while unlocking the full benefits of CEPA, PLI, and Make in India initiatives.

References:

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