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The two countries signed agreements to establish $9 billion in concessional credit and $1 billion in Official development assistance (ODA) funding for infrastructure development projects in India," said an Indian Finance Ministry statement.
This implemented a decision taken during the visit of Prime Minister Narendra Modi to South Korea in May 2015. With this, South Korea became one of the first non-G-7 countries to become an ODA contributor in India.
Both sides also agreed to consider deploying part of this fund towards the Smart City projects in India.
"They also agreed to establish a mechanism at senior official levels, to identify good infrastructure projects in India, to draw upon these funds," the statement said.
The agreements were signed during the visit of Finance Minister Arun Jaitley to South Korea on a four-day official visit to attend the India-Korea Financial Dialogue and the second annual meeting of the Board of Governors of Asian Infrastructure Investment Bank (AIIB).