South Korea's ministry of strategy and finance and the Export-Import Bank of Korea today expressed their intention to provide $10-billion line of credit to India for mutual cooperation in infrastructure.
The credit will comprise an Economic Development Cooperation Fund of $1 billion and export credit totalling $9 billion for priority sectors, including smart cities, railways, power generation and transmission, and other sectors to be agreed.
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.
On the first day of a two-day visit to South Korea, Asia`s fourth-largest economy, in the last leg of three-nation tour of Indian Prime Minister Narendra Modi, the two countries today signed several agreements for expanding economic and strategic cooperation, including a revised agreement for avoidance of double taxation and the prevention of tax evasion with respect to incomes generated in either country.
The two countries agreed to commence negotiations for amending the India-Korea comprehensive economic partnership agreement (CEPA) by June 2016, with a view to achieving qualitative and quantitative increase of trade through an agreed roadmap.
An agreement for cooperation in building cities with updated technologies, including smart grids for building of smart cities, has also been signed, in view of their crucial influence on improving the quality of residential environments and achieving sustainable economic development.
In the steel sector, the countries agreed to encourage the steel industry of both countries to develop mutually beneficial projects.
There was no reference to the POSCO's project in India that has so far failed to take off.
Indian and Korean companies will cooperate in shipbuilding, including in the construction of vessels such as LNG carriers, even as the Indian government discussed partnership with Koreato modernise the Indian shipbuilding industry.
The governments of both countries decided to provide support for facilitating private sector discussion on ways to cooperate in this area. A joint working group that includes the government and private sectors of the two countries will be established to facilitate cooperation in the shipbuilding sector.
Besides, the two countries will look for cooperation in the field of stable maritime transport, possible joint business projects in the area of shipping and logistics, and promotion of employment of both countries' seafarers.
It has also been decided to expedite the necessary procedures for mutual export of fresh fruits and horticultural products.
The two countries reviewed the progress made in establishment of the Korean industrial park in Rajasthan and agreed to facilitate participation of Korean small and medium enterprises to benefit from 'Make in India' initiative.
They agreed on the desirability of establishing more offices of both countries' respective trade agencies, including Korea Trade Promotion Corporation (KOTRA), to facilitate trade, investment and industrial cooperation between the two countries.
The first meeting of the Korea-India CEO Forum, which will be held in Seoul on 19 May, will play a significant role to boost exchanges and dialogues between enterprises of the two countries, enhance mutual investment and further pragmatic bilateral business cooperation.
An India-Korea Joint Working Group will be set up in the field of electronics hardware manufacturing to enhance co-operation and facilitate business collaboration through joint ventures and technology transfer on a commercial basis between Indian and Korean electronics manufacturing companies, and the creation of a business friendly environment in this field.
On his first visit to Seoul since taking office a year ago, Modi was to meet President Park Geun-Hye to discuss issues ranging from diplomacy and the economy to the security situation on the Korean peninsula.
The prime minister will also be meeting with business leaders from South Korea`s largest conglomerates, including Hyundai, Samsung and LG.
All three manufacturing giants operate plants in India where they enjoy sizeable shares of the vast consumer market for cars, smartphones and home appliances.
Modi is looking to secure promises of bigger investments as part of his "Make In India" initiative, aimed at fostering the nation`s relatively weak manufacturing sector.