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South Korea on Monday said it would provide $10 billion to India for development of infrastructure projects such as those related to smart cities, railways and power generation. The two countries agreed to upgrade their bilateral relationship to a 'special strategic partnership'.
Prime Minister Narendra Modi and South Korean President Park Geun-hye held discussions on a wide range of issues and resolved to add "new substance, speed and content" in defence, trade & investment and regional cooperation.
Addressing a joint press conference with 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."
President Park said ties between the two countries had progressed substantially, adding the two sides were committed to improving the business environment. The two sides signed seven agreements and memorandums of understanding, including one on avoidance of double taxation and the prevention of fiscal evasion in terms of income tax.
A joint statement issued at the end of the talks said India saw Korea as an "indispensable partner" in its "Act East" strategy. It added both countries "recognise the value of the bilateral partnership and its contribution to bringing peace, stability and security in the Asia Pacific region".
Korea's ministry of strategy and finance and the Export-Import (EXIM) Bank of Korea expressed their intention to provide $10 billion for cooperation in infrastructure - an economic development cooperation fund of $1 billion and export credit of $9 billion for priority sectors such as smart cities.
The two countries and their respective EXIM banks would hold talks to frame a road map to implement the financial support to the priority sectors, the statement said.
It added the two sides had agreed to hold annual summit meetings, either in one of the two countries or on the sidelines of plurilateral events. Annual joint commission by the two foreign ministers would also be held. It was also agreed to expand cooperation between the armed forces of the two countries.
"We intend to deepen our cooperation in defence technology and the manufacture of defence equipment in India. This sector offers huge opportunities in India," Modi said. He added he had urged Park to support the participation of Korean companies in India's defence sector. "Her response has been positive."
Taking his pet 'Make in India' initiative to Korea, Modi said many Korean brands were household names in India. Both Modi and Park felt Korean companies had vast opportunities to participate in this mission, Modi said, adding he would meet business leaders from Korea on Tuesday.
The PM is scheduled to hold one-on-one meetings with the heads of Hyundai Motors, Samsung Electronics, LG Industries and Doosan Group besides, addressing a CEOs' forum.
Officials said Samsung and LG were considering expanding their operations in India and Hyundai Motors might announce two more plants in the country.
They added Commerce Minister Nirmala Seetharaman was likely to visit South Korea next month.
Modi said a decision to establish a joint working group on shipbuilding reflected the seriousness of the two sides to cooperate in this area. He added Korean companies would participate in India's plans to acquire and manufacture liquefied natural gas (LNG) tankers. Officials said India hoped to acquire nine LNG tankers and was keen on Korea building two of these.
Amid complaints relating to delays, tax issues and problems faced by Korean companies in acquiring land in India, the two sides decided to establish a channel, Korea Plus, to facilitate these companies' investment and operations in India.
Noting trade between the two countries was below potential, the two leaders agreed to review the comprehensive economic partnership agreement and other market access-related issues.
The joint statement said the two leaders expressed concern over North Korea' developing nuclear weapons and ballistic missile programmes, in violation of its international obligations and commitments.
The two sides also sought amendment to the bilateral air services agreement to enhance flight connectivity, covering more cities. Officials said Korea was keen on a rise in direct flights from the current six a week.
The two sides signed a memorandum of understanding on cooperation in audio-visual production. This will enable co-production of films, animation and broadcasting programmes. An agreement was also signed on cooperation between the power ministry and the Korean ministry of trade, industry and energy in the areas of electric power development and renewable energy, smart grids, etc.
