'India most difficult place to do business. You have hidden laws'

Q&A with Seungcheol Lee, vice chairman and CEO at The Federation of Korean Industries

Korean industry believes India is the most difficult place to do business. The Korean government is closely watching the investment scenario after steelmaker Posco withdrew its $5.3 billion steel mill Karnataka. In an interview with Nayanima Basu on the sidelines of CII 4th Asian Business Summit, vice chairman and CEO of The Federation of Korean Industries, Seungcheol Lee said India has some hidden laws. Excerpts:

While Posco pulled out its $5.3 billion investments from Karnataka, it remains committed on its other $12 billion steel mill project in Odisha, how is the Korean industry viewing the developments?

The investment scenario in India has seriously deteriorated. As far as Posco is concerned it got involved into too many regulations with the state government. But we are still committed in Odisha. The industry is closely watching it and Posco’s success in Odisha, if that happens will be the key deciding factor for future Korean investments.

But you seem to be more patient with Odisha where the investments are stuck for last eight years, while in Karnataka you entered only in 2010?

I am not aware of the details. That was the decision taken by Posco. But we are certainly hopeful that at least the Odisha government will fulfil their promise along with the central government. (Commerce and Industry) minister Anand Sharma has assured us that the FDI scene in India will improve.

What is the general perception of Korean industry for investing into India? I believe Hyundai and Samsung are not complaining?

As far as the carmakers are concerned they seem to be happy. So is Samsung. But let me tell you that India has some hidden laws which you do not see at the time of making the investment. The Korean industry believes that India is certainly the most difficult country to invest and do business.

How about the Korean financial sector? Korean banks have been eager to enter India, they are also wanting to invest in the insurance sector.

Yes they are, but you never know what regulation Indian government brings in tomorrow. So everybody is now being cautious and patiently watching the policy developments. Minister Sharma today assured us of more reforms. We are seeing what happens.