India–South Korea Sign MoU on MSME Cooperation to Boost Trade, Innovation

In a major step to deepen economic ties and unlock new opportunities for small businesses, India and the Republic of Korea have signed a Memorandum of Understanding (MoU) on MSME cooperation, marking a new phase in bilateral engagement focused on innovation, trade expansion, and entrepreneurship.

The agreement was signed on April 20, 2026, between India's Ministry of Micro, Small and Medium Enterprises (MSME) and Korea's Ministry of SMEs and Startups, during the ongoing visit of President H.E. Lee Jae Myung to India.

Strengthening the Backbone of Both Economies

MSMEs form the backbone of both Indian and Korean economies—contributing significantly to employment, exports, and innovation. In India alone, the MSME sector accounts for nearly 30% of GDP and over 45% of exports, while Korea's SMEs play a pivotal role in advanced manufacturing and technology-driven growth.

The newly signed MoU aims to harness these strengths by creating a structured and institutional framework for sustained collaboration between the two countries.

Key Pillars of the Partnership

The agreement lays the foundation for a multi-dimensional partnership built on:

• Exchange of knowledge and best practices in MSME policy and governance

• Business matchmaking initiatives to connect enterprises across sectors

• Technical and economic cooperation, including joint projects

• Expert exchanges and capacity building programmes

• Facilitation of trade and investment opportunities

The MoU also seeks to strengthen direct linkages between MSMEs in both countries, enabling them to access new markets, technologies, and supply chains.

Boosting Trade, Investment and Innovation

Officials highlighted that the partnership is expected to significantly enhance bilateral trade and cross-border investments, particularly in sectors such as manufacturing, digital technologies, green industries, and startups.

South Korea is known for its strong ecosystem in electronics, automotive, and advanced manufacturing, while India offers a rapidly growing market, a large talent pool, and a vibrant startup ecosystem. The collaboration is expected to create synergies between innovation-driven Korean SMEs and scale-oriented Indian enterprises.

Focus on Startups and Emerging Technologies

A notable aspect of the agreement is its emphasis on startup collaboration and emerging technologies. By facilitating partnerships between incubators, accelerators, and innovation hubs, the MoU aims to support joint ventures in areas such as:

• Artificial Intelligence and digital transformation

• Clean and green technologies

• Advanced manufacturing and Industry 4.0

• E-commerce and digital platforms

This aligns with both countries' strategic priorities of building innovation-led, future-ready economies.

Enhancing Global Competitiveness of MSMEs

The partnership is also expected to help MSMEs improve their global competitiveness by enabling access to international best practices, advanced technologies, and new export markets.

Experts note that such collaborations are increasingly vital in a global economy shaped by supply chain diversification, digitalization, and sustainability demands.

A Strategic Step in India–Korea Relations

The MoU reflects the broader strengthening of India–Korea relations, which have evolved into a Special Strategic Partnership over the years. Economic cooperation, particularly in manufacturing and technology, remains a key pillar of this relationship.

By focusing on MSMEs, both countries are targeting a sector that has the highest potential for job creation, inclusive growth, and grassroots innovation.

A Shared Vision for Inclusive Growth

The agreement underscores a shared commitment to empowering small businesses as engines of economic transformation. By fostering collaboration, knowledge exchange, and innovation, India and South Korea aim to build a more resilient, inclusive, and dynamic MSME ecosystem.

As global economic dynamics shift, partnerships like this are expected to play a crucial role in shaping the future of trade, entrepreneurship, and industrial growth.