South Korea vows $10 bn for Indian infrastructure
South Korea on Monday decided to provide $10 billion to India for infrastructure, development of smart cities, railways, power generation and other diversified areas as the two countries agreed to upgrade their bilateral relationship to a “Special Strategic Partnership”.
Prime Minister Narendra Modi, who is here on a mission to woo investors, and South Korean President Park Geun-<g data-gr-id="66">hye</g> held discussions on a wide range of issues and resolved to add “new substance, speed and content” covering defence, trade and investment, and regional cooperation to take the bilateral ties to a qualitatively higher level.
Addressing a joint press meet with President Park, Modi said, “Korea’s rapid progress has made the vision of an Asian century stronger.” “We consider Korea a crucial partner in India’s economic modernisation,” said Modi, who arrived here from Mongolia on the last leg of his three-nation tour that also took him to China. President Park said ties between the two countries have progressed substantially and the two sides were committed to improving <g data-gr-id="60">business</g> environment.
The two sides signed seven agreements and Memorandum of Understanding including one on Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income. A joint statement issued at the end of the talks said India sees Korea as an “indispensable partner” in its “Act East” strategy and that both countries “recognise the value of the bilateral partnership and its contribution to bringing peace, stability and security in the <g data-gr-id="72">Asia Pacific</g> Region.” The Ministry of Strategy and Finance and the Export- Import Bank of Korea expressed their intention to provide $10 billion for cooperation in infrastructure, comprising Economic Development Cooperation Fund of $one billion and export credits of $9 billion for priority sectors including smart cities, railways, power generation and transmission and other sectors to be agreed, the statement said.
The two governments and the EXIM banks of the two countries will hold consultations to chalk out a roadmap in order to materialise the envisioned financial support for priority sectors, it said.
Elaborating on the decision to upgrade the bilateral ties to special strategic partnership, the statement said the two sides have agreed to establish annual Summit meetings, in either <g data-gr-id="57">country,</g> or on the margins of plurilateral events and annually hold joint commission led by the two Foreign Ministers.
It was also agreed to expand cooperation between the two armed forces and further strengthen regular consultations between the National Security Council structures of the two countries on security, defence and cyber related issues. “We intend to deepen our cooperation in defence technology and manufacture of defence equipment in India. this sector offers huge opportunities in India,” Modi said.
The Prime Minister said he has requested President Park to support the participation of Korean companies in the defence sector in India. “Her response has been positive,” he said. Taking his pet ‘Make in India’ initiative to Korea, Modi said many Korean brands were household names in India. Both he and President Park saw vast opportunities for Korean companies to participate in this mission, Modi said, adding that he will be meeting Korean business leaders on Tuesday. The Prime Minister is slated to have <g data-gr-id="70">one-one-one</g> meetings with heads of Hyundai Motors, Samsung Electronics, LG Industries and Doosan Group tomorrow besides addressing the CEOs Forum.
Modi said the decision to establish a Joint Working Group on shipbuilding reflected the seriousness of the two sides to cooperate in this area. He said Korean companies will be participating in India’s plans to acquire and manufacture LNG tankers. The Prime Minister will visit tomorrow the Hyundai Heavy Industries Shipyard at Ulsan. Officials explained that India hopes to acquire nine LNG tankers and is keen Korea will come forward in building two of these and also help with the technology. Officials said Samsung and LG were looking at expanding their operations in India and Hyundai Motors may announce two more plants in India in addition to the two that it has now.
To carry forward the momentum, Commerce Minister Nirmala Seetharaman is likely to visit South Korea next month, they said. In the backdrop of complaints of delays, tax issues and problems of getting land faced by Korean companies in India, the two sides decided to establish a channel -- Korea Plus -- to facilitate their investment and operations in India. The Prime Minister said he had sought President Park’s support for <g data-gr-id="75">participation</g> of Korean companies in new areas.
Noting that bilateral trade was below its potential, the two leaders agreed to review the Comprehensive Economic Partnership Agreement and other market access related issues. Bilateral trade is about $16 billion and the two sides are keen to see that it goes up substantially. There are 300 Korean companies which have invested about $3 billion in India. They employ about 40,000 workers in India.
The Prime Minister welcomed Korea’s diplomatic efforts to maintain peace and stability of the Korean Peninsula. Modi said he also shared President Park’s concerns that <g data-gr-id="133">proliferation</g> of nuclear and other weapons of mass destruction will not be in the interest of countries of the region. He offered India’s support to Korean people for <g data-gr-id="50">peaceful</g> reunification of Korean Peninsula.