Korean prez pitches for higher FDI into India
India, Korea set to sign updated Comprehensive Economic Partnership Agreement today
South Korean companies were willing to invest in diverse sectors, including infrastructure, in India, South Korean President Moon Jaein said on Monday.
Moon Jae-in also pitched for growing bilateral trade based on greater liberalisation, possibly hinting at South Korea’s current standoff with India on expanding of the existing Comprehensive Economic Partnership Agreement (CEPA).
Speaking at the IndiaKorea Business Forum organised by FICCI, Moon also said South Korean companies needed to boost investments in India beyond the existing $2.7 billion. This is expected to see South Korea stake claim to a larger portion of India’s infrastructure pie as Moon referred to largescale spending by the government and multilateral bodies in building roads, bridges and ports.
Adding that South Korea was already involved in various on-ground projects, the president listed out the Nagpur-Mumbai Super Communication Expressway, Kalyan-Dombivali Smart City and the redevelopment of Bandra Government Colony as examples where South Korea’s expertise in creating high- class infrastructure could help India.
According to sources, the president is expected to visit Maharashtra over the next two days and take a stock of the projects for which Seoul has agreed to provide a line of credit of $10 billion.
The forum saw the presence of the major ‘chaebols’ or large family-owned mega- conglomerates from Korea, including Samsung, Hyundai and LG.
The meeting is the second one of its kind in less than five months.
However, India may have a tough time adding to the list of 600 Korean companies that already have operations in the country owing to investors’ reservations about capital availability and complications regarding the goods and services tax (GST). On Monday, firms said their local partners were finding it difficult to receive loans from banks, while the new GST structure was also complicated.
Commerce and Industry Minister Suresh Prabhu said plans were afoot to locate and open a special economic zone for Korean companies in India.
Prime Minister Narendra Modi and Moon Jae-in are expected to sign the updated Comprehensive Economic Partnership Agreement (CEPA) on Tuesday, talks on which had come to a standstill regarding the addition of new tariff lines from both sides as well as India’s demand to be recognised as a ‘Native English Speaking’ nation. The implementation of the latter demand would simplify visa and employment rules for Indian professionals, a senior commerce department official said.
However, after a lengthy discussion on the matter between trade ministers from both nations on Monday, three broad issues were agreed upon. These include an early harvest agreement that was signed on Monday, and identification of broad areas for expanding the pact later. Also, a strategic group to harness fourth-generation industrial technology and a separate agreement for trade remedies were also expected.
In place since 2009, India now wants to amend the CEPA to allow exporters greater incentive to ship out goods to the East Asian nation. This involved a focus on not expanding the pact beyond its current conditions, enhancing market access and strengthening of the Rules of Origin clauses, the official added. Seoul has been opposing this and has sought greater liberalisation on India’s part.
India’s export to South Korea was $4.4 billion in 201718, while imports stood at a much larger $16.4 billion.
President Moon also said South Korean companies needed to boost investments in India beyond the existing $2.7 billion