India offers Korean firms detailed guidance for forays into India

India’s finance ministry, central bank and stock market operator outlined the country’s regulatory and investment environment for South Korean financial services companies at a recent investment forum in Seoul. The event aimed to facilitate their foray into the world’s fifth-largest economy.

South Korea’s regulatory Financial Supervisory Service (FSS) and Korea Finance Association jointly hosted the forum with the Embassy of India earlier this month, inviting about 140 CEOs and executives of Korean financial services companies.

They discussed the qualifications for foreign financial services firms to do business in the world’s most populous country and relevant regulations, according to the FSS.

India’s Ministry of Finance, Reserve Bank of India, Securities and Exchange Board of India and National Investment and Infrastructure Fund provided detailed reviews of their regulatory frameworks and business outlook.

Mohamed Ashraf, deputy secretary of India’s Ministry of Finance, discussed the growth rates of banks and insurance companies in the country, as well as foreign financial companies’ operations there.

He also detailed the routes of foreign investors’ advance into India, including opening local branches and making stake investments. He then gave tips on the supervisory framework for banks and the approval processes for banking licenses in the country.

Manoranjan Mishra, chief general manager at the Reserve Bank of India, shared foreign investors’ ownership of Indian banks and non-banking financial services companies, as well as the required qualifications and administrative details of their business there.

Ruchi Chojer, executive director of the Securities and Exchange Board of India, discussed the registration process for foreign portfolio investors and the relevant regulations, in addition to the relaxed public disclosure rules.

India is the world’s fifth-largest economy in terms of gross domestic product. The International Monetary Fund forecasts that the country will become the world’s No. 3 economy by 2026.

With a median age of 29 and resilient domestic demand, India is expected to benefit from the reshuffling of global supply chains. Its stock market has been rising for eight years in a row.

Some 70 companies listed on the Indian stock market have market capitalizations of over $1 billion — the third largest number globally in terms of companies with a market value of $1 billion or more.

The number of individual stock investment accounts has swelled by 3.4 times to 140 million as of the end of 2023, compared with four years earlier.

KOREAN COMPANIES IN INDIA

Twelve South Korean financial services firms, ranging from banks and asset management firms to insurers and non-banking financial institutions, operate a total of 25 locations there, the eighth-largest number after the US (60), Vietnam (53) and China (47).

Shinhan Bank and Mirae Asset Global Investments Co. each operate six branches in India, while Woori runs three.

The combined assets of Korean companies in India grew 13.6% on-year in 2023, after an 8.7% expansion in 2022.

“If India's abundant resources and manpower are combined with Korea's competitive financial services, it will provide new growth momentum for both countries,” FSS Governor Lee Bok-hyun said at the forum.

“It will also contribute to the balanced and solid development of the Asian financial market,” he addd.

Write to Hyun-Woo Kang at hkang@hankyung.com
Yeonhee Kim edited this article