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A day after India assured South Korea of providing all clearances to the $12-billion Posco project in Odisha soon, visiting South Korean President Park Geun-hye on Friday said operationalisation of the delayed integrated steel plant would lead to many large-scale investments from her country into India.
“When Posco kicks off in full scale, it would provide momentum to other large-scale investments,” she said, while addressing industry chambers.
On Thursday, Prime Minister Manmohan Singh had said the Posco project in Odisha would be operational in the coming weeks, following the revalidation of its environmental clearance. “Grant of mining concession for the project is also at an advanced stage of processing,” he had said.
The integrated steel plant by South Korean firm Posco is the biggest foreign direct investment into India. The project had hung fire since 2005, as it was entangled in several regulatory and environmental hurdles.
Addressing the chambers, Commerce & Industry Minister Anand Sharma said national investment and manufacturing zones (NIZMs) addressed the issues that had led to delay in the Posco project. “It would be now easier for Korean companies to set up manufacturing units in NIMZs than earlier,” he said.
Sharma asked Korean companies to invest in critical segments such as information technology, including chip manufacturing. Informing Korean businessmen about the recent liberalisation in foreign direct investment in sectors such as civil aviation and telecom, he asked them to benefit from these changes.
Park said though trade between India and Korea rose 70 per cent in volume terms after a comprehensive economic partnership agreement (CEPA) was signed, the contents of the pact weren’t as exhaustive as other free trade agreements. “It leaves much to be desired,” she said, urging for a revision to help businesses from the two sides reap the benefits of the CEPA.
India and Korea have agreed to revise the CEPA to cover not just goods, but also investments and services. For this, the first round of talks will be held in Seoul during the first half of this year.
Trade deficit with South Korea increased from $5.1 billion in 2009-10 to $8.89 billion in 2012-13.
