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| India, Korea to ink three key MoUs next week |
| Jyoti Malhotra / New Delhi Jan 21, 2010, 15:41 IST |
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India and South Korea will sign three memoranda of understanding on techno-economic cooperation, information technology and space cooperation during the visit of South Korean president Lee Myung-bak as chief guest for India’s Republic Day celebrations.
An upgrade to a strategic partnership is also on the cards during President Lee’s visit, sources said, with Seoul seeking to establish relations with “new nations” like India, ASEAN and Central Asia – beyond nations like the US, China, Japan and Russia, the building blocks of Lee’s ‘New Asia Initiative’ -- while India seeks to reinvent ties with East Asian powerhouses like Japan and Korea.
President Lee will, however, not visit the site of the Posco steel plant in Orissa’s Jagatsinghpur district, where Korea’s largest steel-maker has been trying to build an integrated steel factory and port at Paradip, even though Prime Minister Manmohan Singh personally intervened to push central and state authorities to allow Posco to acquire the land earlier this month.
Sources in the Indian and Korean governments who spoke on the condition of anonymity said small groups of tribals were continuing to resist Posco’s acquisition of nearly 4,000 acres (1,600 hectares) of forest and agricultural land.
The Korean steelmaker is promising to bring in $12 billion of FDI to build the plant, the largest single foreign investment in India till date.
Until a few weeks ago, when the PM pushed various stake-holders, including the mining and environment & forests ministries, to take a decision, the Posco plant had been stuck in a no-man’s land for the last five years, caught between tribal agitation on the one hand, bureaucratic red-tape and outdated land use laws on the other
With their President arriving, the Koreans want to play down the Posco imbroglio and focus on India’s enormous domestic consumer market.
Korean companies like Hyundai, LG and Samsung have driven trade up to $15.6 billion in 2008 and the entry into force of the Comprehensive Economic Partnership Agreement (CEPA) on January 1, where tariffs will come down by 70-80 per cent over the next 8 years, is expected to give it a big boost of about $3 billion yearly.
Korean sources said the entering into force of CEPA, only the second country after Singapore with which India has signed such an agreement, was greeted with huge enthusiasm back home – with buses and downtown markets in Seoul flush with advertisements about India.
Analysts said it was also not mere coincidence that the visit of the Japanese prime minister in December was being followed up by the visit of the South Korean president in January.
“Lee’s visit is an acknowledgement not only of India’s rise in Asia, but also a warning to its own entrepreneurial class that it must reduce its excessive dependence on China,” said Prof GVC Naidu, professor of East Asian studies at the Jawaharlal Nehru University in Delhi.
While China remained an economic powerhouse, said Naidu, “you never can tell with China, since its political systems are so closed. The South Koreans now want to look at India, much more transparent and predictable, as a medium to long-term option to do business with,” he added.
Korean sources said they were also keenly watching the “rivalry between India and China,” but not willing to publicly comment on the matter. Korea’s trade with China, its largest trading partner, touches $100 billion, the sources added, but admitted that Seoul also constantly looked over its shoulder at its large neighbour, China.
Meanwhile, both sides also want to elevate the political-military dialogue and Korea is ready with a shopping list of weaponry that India can buy. Moreover, Seoul seems extremely interested in entering the civil nuclear construction business in India, Korean sources said, although it doesn’t have any uranium to sell.
Korea’s Electric Power Group (KEPCO) had in fact undertaken a working-level visit to India some months ago, and sent out feelers about its expertise in this regard. Only a few weeks ago KEPCO signed a whopping $40 billion civil nuclear construction deal with UAE.
Indian officials, still awaiting the final passage of the Indo-US nuclear fuel reprocessing agreement, were non-committal about the future of civil nuclear cooperation with Korea, although they admitted that the lack of uranium in Seoul’s package for India could well be compensated by Delhi’s deals with Kazakhstan and Mongolia.
But visiting Koreans also had one other question in mind : Why was India’s political leadership and civil society so disinterested in Korea?
Choi Joon-suk, the editor of Korea’s largest newsweekly, the ‘Weekly Chosun,’ told the ‘Business Standard’ : “Koreans are so knowledgeable and enthusiastic about India, about your economic potential and your culture, but I don’t see the same here. We need to get to know each other much better,” Choi said.
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