Korean Foreign Direct Investment in India :

Hyundai Motors’ Industrial Cluster

Jongsoo Park

Professor of Economics,

Gyeongsang National University

• Trends and performance of the FDI • Determinants of FDI• Drives and deterrents of FDI in India• FDI with Industrial Cluster • Korean FDI : HMI case

Contents

Korean FDI in India

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

US

$ th

ous

and Total Approved

Investment(US$thousand)Total actualInvestment (US$thousand)

FDI with Industrial Clusters

• What is cluster?“geographic concentrations of interconnected companies and i

nstitutions in a particular business field” (Porter,1990).

• FDI with industrial clusters should transfer technology more effectively than dispersed one . 

•Korean FDI in India : HMI case      

: Spillovers of FDI & industrial clusters

HMI's Industrial Clusters

Important factors of success of HMI

• Greenfield investment &Greenfield investment &

• launch together with established launch together with established Korean subcontractors strategyKorean subcontractors strategy

• Promote the FDI in industries and products with high technology, economies of scale, substantial domestic content.

• The existence of functioning industrial clusters is an indication of the sophistication & competitiveness of a business environment.

What should guide India's FDI policy?

Summary and Conclusion