South Korean companies are actively targeting India, the world’s most populous nation and fastest-growing major economy. However, despite increasing industrial activity, M&A deals between the two countries do not yet reflect the heightened interest.

India has emerged as a key destination for Korean strategics to expand across sectors – from industrial to consumer goods – as they seek to localize operations and invest in manufacturing hubs. To that end, LG Electronics intends to list its Indian unit this year to bolster its local presence following Hyundai Motor India’s USD 3.3bn IPO success last year.

In 2024, South Korean M&A in India totaled USD 228m across four deals, comprising 2.85% of Korea’s total outbound volume for the year of USD 7.99bn. So far in the year to date (YTD), there have been two deals announced, including gaming giant Krafton’s USD 53m investment in Indian fintech firm Cashfree Payments. POSCO also completed a transaction in February to increase its stake in a steel processing center in Pune, consolidating its control of India’s steel distribution and processing sectors.

When investing in India, finding the right local partner is critical for South Korean strategic investors, says Saloni Shroff, a partner at law firm Cyril Amarchand Mangaldas.

“They seem to prefer joint ventures” she says.

Despite the slow pace of M&A activity, this is not a challenge unique to Korean firms, according to a Seoul-based senior M&A banker. Several foreign strategics have explored Indian deals, but high valuation expectations have slowed actual transactions, he adds.

Nevertheless, “it’s only a matter of time. India is a market you cannot ignore,” says the banker. He maintains that once valuation talks normalize and macro uncertainties – currently peaking with the advent of US tariffs -settle, M&A activity should increase. He feels sectors such as energy, consumer goods, food & beverage, and logistics are attractive targets for Korean strategic buyers.

Given the country’s promising outlook, Shroff expects India to capitalize on natural synergies arising out of its development priorities and focus areas, driven by the government.

She considers Korea’s dominant industries, such as its automobile, semiconductor, electric vehicle, and even shipbuilding areas, to be the most likely to engage in deal activity.

Tipping the scales

In 2023, Mirae Asset led the largest Korean M&A action in India with a USD 350m acquisition of local brokerage firm Sharekhan. This was followed last year by Shinhan Financial Group’s USD 180m purchase of a 10% stake in HDFC Credila, India’s largest education loan provider.

Despite these notable deals, India remains challenging for expanding financial services, and further sector transactions are expected to be limited, says a sector executive.

Korean financial groups have been actively seeking overseas expansion, but high valuations, regulatory complexities, and sector-specific risks have constrained broader M&A activity in India. While acquiring a brokerage license can offer strategic entry, many Korean strategics find that such platforms often lack the scale needed to justify sustained investment.

Mirae Asset’s success stems from its local presence through long-standing asset management operations since 2006, and this provided a solid foundation for the Sharekhan acquisition and value chain enhancement.

For others, scaling operations remains a hurdle, says the executive, adding that Shinhan’s investment was only a minority interest to gain exposure for microfinance.

Appetite for growth

Korean food brands such as Lotte, Samyang Foods, Orion, Ottogi, and Nongshim are ramping up investment in India to boost production. Data from the Korea Customs Service shows that exports of Korean ramen to India jumped to USD 11.28m in 2023 from USD 3.7m in 2019.

Beyond its consumer space, India’s maritime sector also offers promising opportunities for South Korean investors, with the country engaging with advanced market players to become a regional maritime hub, as recently reported. State-owned Cochin Shipyard is reported to be a likely partner with HD Hyundai Heavy Industries to build a new shipyard facility in Kochi.

Krafton, which has previously inked several deals in India, has pledged to expand its presence in the country, while LX Pantos, the logistics unit of the conglomerate LX Group, is also on the lookout for acquisition opportunities, as reported by Mergermarket.

South Korea top 10 outbound deals in India since 2020

Source: Mergermarket, data correct as at 10-Apr-25