For Korean companies, India is a lucrative cash cow: LG India reported revenue of Rs 24,366 crore and a net profit of Rs 2,203 crore last year. Royalty payments to its Korean parent reached Rs 454.61 crore. But the real headline came with its 2025 IPO: In one stroke, LG India’s market capitalisation surpassed that of its global headquarters’. And it was purely due to generous policy environment.
Hyundai Motor India and its sibling Kia tell a similar tale of extraction masked as investment. Royalty payments stand at 3.5% of sales revenue, translating into thousands of crores annually repatriated to Seoul. Such an anomaly has left Tata Motors and Mahindra to fight an uphill battle against what many term subsidized Korean pricing power.
Samsung India completes the triumvirate of value extractors. Its revenue for the first time crossed Rs 1.11 lakh crore during 2025, making it the only consumer-electronics firm in India to cross the trillion-rupee mark. During 2024, royalty remittances to the Korean parent hit Rs 3,322 crore, roughly 40% of that year’s net profit. Retained earnings have ballooned and been diverted to Vietnam.
Profits earned from Indian consumers through high royalties, IPO cash-outs and dividend flows are effectively subsidizing Vietnamese factories that then export finished goods back into India. Why? Should Korean conglomerates plough cash extracted from India into manufacturing facilities in a smaller neighbor that then undercuts Indian industry? The optics is toxic: India as a lucrative cash cow, Vietnam as the preferred factory floor.
Decades of liberalization were sold on the promise that FDI would catalyze domestic industry, transfer technology and create balanced growth. Instead, the policy has tilted towards foreign giants who repatriate profits, royalties, special dividends and IPO proceeds liberally.
On the other hand, Indian firms struggle with higher compliance costs, delayed approvals, and a royalty burden that starves local innovation.
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