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Recent change in investment environments of India and its impact on inward FDI

박선화 1 이병태 2 이선희 3

1동아대학교
2부경대학교
3

Accredited

ABSTRACT

This study aims to examine how a change in India’s foreign capital attraction policy and the enforcement of CEPA between South Korea and India have impacted South Korea’s direct investment in India. Following the South Korea-USA FTA conclusion (April, 2007) and the South Korea–EU FTA conclusion (July 2009), the enforcement of South Korea-India CEPA on January 1, 2010 has widely opened a gigantic India market with a population of 1.2 billion people to South Korea. With regard to this good business opportunity, this study aims to examine how a change in the Indian government’s foreign capital attraction policy and the enforcement of CEPA between South Korea and India have impacted South Korea’s FDI in India, especially, its investment in manufacturing businesses. According to the analysis of relevant data, the Indian government has –since 1991 opened its domestic product market, trade and financial sectors and guaranteed the free transfer of foreign capital and technology, while continuing to increase investments for building infrastructures for its weak industries. South Korea’s investment in India has steadily been increasing centering on manufacturing businesses, and especially has risen rapidly since 2003 when discussions on CEPA between South Korea and India began. Thus, this trend is deemed to be attributable to synergies that are triggered by a change in the Indian government’s policy on foreign capital attraction since 1991, as well as by the CEPA between South Korea and India.

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* References for papers published after 2023 are currently being built.