This study analyzes the competitiveness of the Indian cultural industry with emphasis on film, broadcasting and animation; and provides suggestions for further cooperation between Korea and India. Mutual cooperation in the cultural industry has been included in the form of co-production agreements in Chapter 9 of the Korea-India CEPA which went into force in 2010. Furthermore, the leaders of two countries adopted an MOU to include discussions on an implementation plan for cultural exchange in their meeting of early 2014.
India’s cultural-content industry, centered on film and broadcasting, already ranks14th in the world. It is anticipated to expand by more than 10% in the next five years, and grow into a powerhouse on a global scale in the near future. In particular, India is a promising partner country in the global value chain, as it is highly competitive in certain parts of each sector, and is likely to provide a huge market for Korean companies.
In Chapter 3, the relative competitiveness of the Indian culture industry compared to China and South Korea was analyzed. Four major sources of the competitiveness of culture industry, namely production factors, demand conditions, business environment, and related and supporting industries, were ranked by their respective scores. In terms of production factors, composed of capital, labor and technology, India is slightly ahead of China and behind South Korea. In particular, if Korea's advanced technology and planning ability is combined with India’s highly skilled labor, it would increase the competitiveness of both countries. Regarding demand conditions, with a population of 1.3 billion and a continually expanding economy, India shows significant potential as a consumer market. Though the business environment of India was far from competitive and innovative, India is ahead of Korea with respect to overseas experience of its professionals. It would be a win-win strategy for Korea to enter the innovative fields through collaboration with experts from India. Finally, the competitiveness of India’s related and supporting industries was very low, especially due to the absolute shortage in the number of screens. Entering related and supporting industries of India, centered on the establishment of multiplex cinemas, would represent an efficient strategy for Korean companies.
In Chapter 4, in view of the relative competitiveness between the two countries outlined in Chapter 3, a cooperation strategy vertically classified by a short, medium and long-term time periods was presented within the framework of value chains in their respective sectors. In this classification, a relatively effective field with low input costs and risk of market failure led to giving higher priority to the short-term scheme .Suggestions for the short term focused on cooperation without the added cost or market failure while being relatively effective in the short-term guarantee scheme. In the medium term, full-scale cooperation projects could be pursued that reflect the competitiveness of the two countries. They include implementing Korea-India co-production by providing funds and incentive schemes, in addition to participation from the planning stages, conducting hardware businesses(cinema, broadcast network) in related and supporting industries, and expanding exchanges of India’s skilled workforce that possess a high degree of expertise and international exposure. As for long-term cooperation, it should be expanded across the entire value chain. The two countries can establish a common strategic plan targeting the global market by leveraging India’s competitiveness in audiovisual exports.
Chapter 5 presents the policy challenges and suggestions for substantive cooperation measures introduced in the previous chapters. The most effective way is to use the CEPA audio-visual co-production agreement as a starting point for cooperation between the two countries. The study proposed provision of incentives to producers such as guarantee in common release and co-production fund to encourage mutual co-production. The cooperation agreements may also provide support for local language dubbing for the elimination of the language barrier. Second, we may consider establishment of departments and agencies dedicated to cooperative projects under the cooperation agreement signed in the FTA. It is essential to utilize relevant organizations, as most companies in the cultural industry are mostly small scale businesses and they lack of information and networks for local delivery. The study also proposes that the two countries cooperate in developing a professional knowledge workforce, a key component of the creative industries.